Free Trade in Canada
Let’s respect our Constitution and have free trade within Canada
Maxime Bernier, MP for Beauce and candidate for the leadership of the CPC
Ottawa, August 22, 2016
Last April, New Brunswick provincial court Judge Ronald LeBlanc finally dismissed a charge against Gerard Comeau. Mr. Comeau had been fined four years ago for bringing back 14 cases of beer and three bottles of alcohol from Quebec, which was a violation of New Brunswick’s Liquor Control Act.
How can this happen? This single event is proof that there is something utterly wrong in how our federation works. It negates the very notion of living in one united country.
As you know, the four themes of my campaign for the leadership of the Conservative Party of Canada are freedom, responsibility, fairness and respect. Interprovincial trade barriers are contradicting all four of these fundamental principles.
It is totally unfair for Mr. Comeau, and for millions of Canadian consumers, to be forced to buy more expensive goods and services in order to allow provincial governments to maintain their monopoly control over sectors like the sale of alcohol.
It is unfair for nurses, dentists or accountants to have problems finding work in another province because their skills are not being automatically recognized.
It is unfair to have strict provincial quotas in the dairy, poultry and egg sectors that make farms smaller and less efficient, and discourage investment in new food processing capacity.
It is unfair to prevent the growth of businesses because they are not allowed to gain access to other provincial markets unless they submit to unnecessary and costly regulation.
These are only some among hundreds of examples of how provinces have erected barriers to the free movement of goods, services, and workers within our country.
Apart from lobbies that want to be protected at the expense of everyone else, freedom of exchange benefits everyone. Free trade increases choice for consumers. It forces businesses to compete to attract customers with better and cheaper products.
This is why we have trade agreements concluded with 51 countries today. In some cases, it is easier for a Canadian company to sell its product in another country than in another province.
The recent Report of the Standing Senate Committee on Banking, Trade and Commerce, Chaired by Senator David Tkachuk, estimates that interprovincial barriers cost Canada’s economy as much as $50 billion to $130 billion each year.
Freeing our economy from these barriers would help Canadian families and businesses, it would create jobs. It would increase government revenues. And it would make our country more united.
A hundred and fifty years ago, the Fathers of Confederation knew about these advantages. That is why they inserted into our Constitution Article 121, which states that: "All articles of the growth, produce or manufacture of any of the provinces shall, from and after the Union, be admitted free into each of the other provinces."
The problem of interprovincial trade barriers would not exist if we respected our Constitution. Unfortunately, this article was mostly ignored throughout our history. And the federal government, which has exclusive jurisdiction over the regulation of trade and commerce, did nothing to enforce it.
Instead we’ve relied on provinces trying to agree to lower barriers. In 1994, they signed an Accord on Internal Trade. It was never efficient at bringing down barriers. I was responsible for the internal trade file as Industry minister ten years ago and I could see that it was going nowhere.
The premiers were committed to sign an agreement on a new and improved internal trade regime by March 2016. The deadline passed without anything happening.
An agreement in principle was reached by the 13 premiers in July, but with very little details. We don’t know what sectors will be exempted. We don’t know what procedure will be used to solve disputes. There are already disputes about opening procurement contracts.
I do not believe that anything concrete will come out of this. It’s illogical to expect that governments responsible for the problem, will solve the problem. It’s no surprise that the government of New Brunswick is appealing the Comeau ruling.
The solution is not to hold more federal-provincial conferences of ministers and bureaucrats to negotiate tiny advances. What we need is a long-term solution, based on respecting our Constitution, to eliminate existing barriers and stop new barriers from being erected.
In theory, everyone is in favour of getting rid of interprovincial trade barriers. The current Liberal government is in favour. My colleagues in the leadership race are in favour. But in practice, nobody is willing to do what it takes to solve the problem.
Among all the studies that have been written on the topic, I have found only one that I believe offers a workable and realistic solution. It was set out in a paper titled “Citizen of One, Citizen of the Whole” published by the Macdonald-Laurier Institute six years ago. The title comes from a declaration by one of Canada’s founders, George Brown, when he said that the goal of Confederation was to “throw down all barriers between the provinces – to make a citizen of one, citizen of the whole.”
One of the paper’s coauthors was the late Robert Knox, who was executive director of the Internal Trade secretariat when the Accord on Internal Trade was negotiated in 1993-94. Mr. Knox changed his mind after seeing how pointless the Accord’s dispute resolution mechanism was.
Their proposal is simple: It is Ottawa’s responsibility to ensure that Article 121 of our Constitution is respected. The federal government cannot of course change provincial laws and regulations directly. But it can help challenge them in court.
That’s what Mr. Comeau did in New Brunswick. But very few people are willing to get into this kind of costly and stressful court fight. And what we need is not just one challenge of one regulation. But a systematic challenge of hundreds of laws and regulations.
If I am elected Leader of the Conservative Party of Canada and ultimately Prime Minister of Canada, I will first bring forward legislation to adopt a Charter of Economic Rights. This will establish the case for Ottawa’s intervention to give back Canadians their freedom to trade and to work everywhere in the country.
Second, I will establish an Economic Freedom Commission with the power to investigate breaches of the act by the provinces, to recommend arbitration, to help citizens and businesses prosecute their case or to initiate legal action on its own.
This Commission should have the appropriate staff and budget to do its job in an efficient and swift manner, given the billions of dollars of benefit to the Canadian economy that we can expect. A jurisprudence would quickly be established, and it can be expected that cases would be solved more quickly as time goes by.
I am usually not in favour of establishing new government bureaucracies. But in this case, when the goal is to fight bureaucratic excesses, to apply the wisdom of our Constitution, and to unleash the free market for the benefit of Canadians, I think it is totally justified.
It’s time to stop pretending that we are concerned with this issue, and to take the appropriate means to solve it. If I am elected leader of the Conservative Party of Canada, and then Prime Minister of Canada, I will take the necessary means to force provinces to respect our Constitution, and to give back to Canadians the economic freedom that is their birthright.