More than 200,000 Ontario and Quebec businesses stand to benefit from improved relations and reduced trade barriers between the two provinces
Toronto, July 26, 2023 – Strengthening strategic ties and reducing trade barriers could benefit 215,000 small- and medium-sized businesses in Ontario and Quebec, according to Ontario and Quebec: Unlocking an Economic Corridor for SMEs, the latest report from the Canadian Federation of Independent Business (CFIB).
"There are hundreds of thousands of businesses with economic ties between Ontario and Quebec. Both economies only stand to gain by reducing trade barriers and making it easier to operate across the provincial border,” said Ryan Mallough, Vice-President, Legislative Affairs, Ontario. “Prioritizing economic cooperation is a win for small business and a win for our economies.”
The report finds that almost a quarter (22%) of Ontario businesses, and two in five (39%) Quebec businesses purchase or sell goods in the other province. More than 10% of these businesses’ revenue (12% in Ontario, 15% in Quebec) is generated from trading with the other province. Business owners in both provinces believe that strengthening ties between Ontario and Quebec will benefit the Canadian economy (70%), their sector (59%) and their individual businesses (51%).
The main sectors purchasing or selling goods or services between the two provinces are the same in Quebec and Ontario: wholesale (75%; 49%), manufacturing (55%; 33%), and retail (42%; 29%).
Barriers to trading between Ontario and Quebec
The report identifies barriers small business owners in both provinces face when operating in the other, and key public policies that can improve trade and economic growth. Ontario businesses identified the language barrier (47%) is their main challenge to operating in Quebec, followed by high shipping costs (24%) and complexity of provincial regulations (19%). While a third of Quebec businesses (29%) said that they have no challenges, 27% identified shipping costs, followed by complexity of provincial regulations (19%) and the language barrier (17%).
“While there is a clear eagerness to expand, various barriers hinder small business growth prospects in both Ontario and Quebec. These barriers are not insurmountable, and governments possess the power to reduce them, but they need the political will,” said Riley Locke, policy analyst and co-author of the report. “There needs to be greater cooperation in areas including labour mobility, internal trade, and reducing regulatory hurdles. Regarding languages barriers, both provinces, in collaboration with the federal government, should also move to expand French and English language and translation supports for business owners to help spur interprovincial investment and create jobs.”
Three quarters (74%) of Ontario businesses and 69% of Quebec businesses support mutual recognition of other provinces’ workers’ compensation standards, which would enable employees to work in different provinces without going through new paperwork. Both provinces should also move to mutually recognize professional credentials to allow for greater labour mobility.
CFIB is also calling on the Ontario and Quebec governments to:
- Adopt and monitor joint economic targets, such as increasing productivity, increasing GDP, and increasing interprovincial investment.
- Reduce taxes for small businesses.
- Harmonize tax rules to avoid duplication and unnecessary complexity for businesses operating in both provinces.
- Eliminate interprovincial trade barriers, such as allowing direct-to-consumer alcohol shipments.
“By coming together to address the identified challenges and implementing targeted policy measures, governments can support SMEs, promote interprovincial trade, and strengthen the economic ties between Quebec and Ontario for the benefit of the entire country,” concluded Mallough.
To access the full report and read more of CFIB’s recommendations, please visit here.
For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.