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Interprovincial trade improvements even more necessary given U.S. trade uncertainty

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When Canada’s Premiers got together at their annual summer meeting of the Council of the Federation, much was made of the agreement to increase the personal exemption limit on alcohol for those looking to transport booze across provincial borders of their own use.  When it comes to internal trade in Canada, few issues have garnered as much attention as alcohol.  But for small businesses, the more substantive announcement that came out of last week’s meeting was the release of a new work plan that will tackle the kinds of regulatory headaches that make it hard for them to do business across provincial borders.

The concept of interprovincial trade barriers is one that people often struggle to wrap their heads around.  After all, there aren’t any hard borders between provinces with customs officers applying duties and tariffs.  That, however, doesn’t mean that barriers don’t exist.  In the case of alcohol, there are regulatory limits put in place.  Similarly, food products that are provincially inspected can often not be sold in other provinces unless new or federal inspections are obtained (at an additional cost, of course).

But often these barriers aren’t strict prohibitions but rather the differing rules and regulations between provinces that take time and money, making it either uncompetitive to trade or increasing costs for consumers. For instance, different rules for over-sized loads can see some trucks needing to be offloaded with loads then split into different loads to travel through a given province or different fall protection training and equipment may be needed for a construction crew to work in a different province (even though, objectively, gravity operates the same way regardless of jurisdiction).  In some cases, these difference may seem silly or minor, such as changing wide load signs or first aid kits, but each difference requires compliance or else those businesses can find themselves facing fines and delays.

With these types of barriers all too common for small businesses in Canada, and given the uncertainty surrounding the future of trade with the United States, it makes good economic and business sense for provinces to improve access across the country for their businesses.  With the relatively small size of our local market, nowhere is this more true than in Atlantic Canada.  According to the Atlantic Provinces Economic Council (APEC), a business operating in all four Atlantic provinces has to comply with four different sets of provincial rules while still only having access to a market 15% of the size of Ontario. 

Certainly, there has been some good work happening within the Atlantic region to help align our regulatory requirements and this is to be commended.  For many small businesses, trade is most common with our neighbouring provinces.  But the hope is that this new work plan to tackle the regulatory and administrative red tape between provinces on a national scale will improve access for our businesses to an even wider market within Canada. With all the current trade uncertainty, the more we can open up markets for our businesses, the better.

 

Erin McGrath-Gaudet, Director, PEI & Intergovernmental Policy