Interprovincial barriers make us poorer

Published on September 20, 2017

According to a new Statistics Canada study, trade between provinces corresponds to level that would be expected if 6.9% tariff were imposed. This is largely due to the existence of regulatory barriers that prevent Canadians from buying, selling and working with the same ease in every province. From an economic point of view, interprovincial barriers have the same effect as customs tariffs: they discourage trade.

According to the study, when a similar analysis is applied to the United States, there was no evidence that state borders impede inter-state trade." Canada is in an abnormal situation: 150 years after Confederation, Canada still doesn't have an integrated economy.

These ridiculous interprovincial barriers make us poorer. Negotiations that have been going on for decades between governments have not succeeded in getting rid of them, and Ottawa never took its responsibilities to apply article 121 of the Constitution, which guarantees free trade between provinces. The Supreme Court will soon have a crucial opportunity to interpret article 121 more broadly and strike down barriers in the coming Comeau case.