Reduction of Interprovincial Trade Barriers

Reduction of Interprovincial Trade Barriers

The Business Council of Manitoba recommends a removal of all interprovincial trade barriers, which increase the cost of goods for Canadians.

CONTEXT

The issue of interprovincial trade barriers and their removal has been of interest within Canada for years. The Business Council of Manitoba worked in collaboration with the Business Council of Canada and similar Councils across Canada to deliver a joint paper advocating for the reduction of interprovincial trade barriers.

Our joint paper emphasized the costs of interprovincial trade barriers (“barriers”) which are equivalent to a 6.9% tariff on Canadian goods and services. The Canadian economy would benefit from reduced barriers between provinces, which would lessen Canadian businesses’ costs of navigating through the various restrictions amongst provinces. Eliminating these barriers would increase trade flows, allow less-costly expansion for productive firms, decrease prices to Canadians, and raise household incomes.

The Business Council of Manitoba recommends a removal of all interprovincial trade barriers, which increase the costs of goods for all Canadians.

REDUCING INTERPROVINCIAL TRADE BARRIERS

Provinces can move toward freer trade by engaging in more bilateral or multilateral partnership agreements, which seek to harmonize regulations and improve labour mobility.

The New West Partnership Trade Agreement (NWPTA) between British Columbia, Alberta, Saskatchewan, and Manitoba represents progress. Other provinces must join to expand this agreement or pursue their own multilateral or bilateral deals

Manitoba has reduced trade barriers through dropping provincial restrictions to improve the flow of goods in and out of our borders. While these changes are commendable, and even recognized in the Prime Minister’s 2021 Speech from the Throne, the Council believes that the province must commit further until all Manitoba trade barriers to provincial counterparts are eliminated.

PATH TO CHANGE

The elimination of the cost-increasing provincial trade barriers is an effective way to aid economic growth. The Federal government committed over $20 million in support to aid in the removal of these trade barriers. To ensure this funding is utilized, the Business Council of Manitoba calls for engagement of the Provincial government to collaborate with the Federal government and stakeholders to identify and eliminate these economy-harming barriers.

The elimination of these barriers will be beneficial to businesses and individual Canadians. Our joint paper highlights empirical evidence regarding the economic benefits of eliminated barriers – specifically, a 3.8% lift to GDP (over $80 billion dollars), and an additional $2,130 per Canadian in real GDP.

MOVING FORWARD

Governments in Canada, both at the provincial and federal level, have taken initial steps in eliminating internal trade barriers. The Canadian Free Trade Agreement (CFTA) contains a long list of “exceptions” for each province that allow them to maintain certain barriers. Two provinces – Alberta and Manitoba – decided to unilaterally eliminate the majority of their remaining exceptions, while the rest of the country has yet to join them. The former Manitoba leadership made significant progress towards opening internal trade through reduced trade barriers under the CFTA. Manitoba is leading by example in reducing these exceptions and must continue to encourage the federal as well as other provincial and territorial governments to follow suit.

Canada must continue to pursue a growth agenda that enhances both our productivity and living standards. As such, provinces across Canada must recognize that internal trade barriers hinder our economy and that their removal will help fast-track the strengthening of our economy.

Manitoba must continue to be a leader in this area, and the Business Council will continue to play our part in ensuring that this topic remains a priority in boosting Manitoba’s competitiveness.

Article authored by Shereese Porter & Nicholas McDonald 

ABOUT THE BUSINESS COUNCIL OF MANITOBA

The Business Council of Manitoba membership consists of a diverse and prestigious group of leaders of companies who have demonstrated a commitment to Manitoba’s economic growth and community development. Collectively they represent the economic engine of Manitoba.