MLI Managing Director argues attempts to reduce trade barriers bound to fail unless Ottawa gets tough with the provinces.

OTTAWA, July 10, 2014 – Macdonald-Laurier Institute Managing Director Brian Lee Crowley says a recent proposal from the provincial premiers is bound to fall short of breaking down barriers to internal trade within Canada.

Crowley believes liberating the flow of domestic trade is a laudable goal but says any attempt to do so requires the federal government’s leadership.

In a recent op-ed for the Globe and Mail, Crowley argued that the provinces have been unsuccessful in addressing the issue on their own, pointing to the ineffective 1994 Agreement on Internal Trade as one example. Renewing that agreement, as the premiers of British Columbia, Alberta and Saskatchewan this week proposed, is not going to bring success.

“The offer of the western premiers to negotiate a Canada-wide free trade zone is too little too late”, Crowley says. “We have nearly two decades of experience of the AIT, which has been driven by the provinces, and the experience has been disappointing to say the least”.

Instead, Crowley says it’s time for the federal government to step in and get tough with the provinces on the issue. He calls for the government, which this past May expressed a willingness to address internal trade, to create a “charter of economic rights” that the courts would use to force the premiers into action.

The problem, says Crowley, is that provinces have a vested interest in maintaining high trade barriers. All of them agree that it’s an issue, but few are actually willing to offend the local constituencies that continue to benefit from protective policies in areas such as beer, wine, transport, electricity or provincial regulatory authorities.

“If the premiers were going to tear down the barriers to trade within Canada, they would have done it long ago”, says Crowley. “The provinces have had their chance. It is now time for Ottawa to use its legitimate powers under the constitution to create the free-trade area the provinces talk about but cannot deliver.”

The high barriers to trade between the provinces, which the federal government says cost the economy $50 billion annually, have long been a source of frustration for businesses. Many of them claim it is more difficult to do business in other Canadian jurisdictions than in the United States.

MLI has conducted extensive research on the issue in the past, including for the publication of the following papers:

Citizen of One, Citizen of the Whole: How Ottawa can strengthen our nation by eliminating provincial trade barriers with a charter of economic rights, by Brian Lee Crowley, John Knox and John Robson.

Free Trade Within Canada: Say goodbye to gold seal, by Ian A. Blue.

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Brian Lee Crowley is the managing director of the Macdonald-Laurier Institute and the author of several books, including The Canadian Century and Fearful Symmetry: the fall and rise of Canada’s founding values.

The Macdonald-Laurier Institute is the only non-partisan, independent national public policy think tank in Ottawa focusing on the full range of issues that fall under the jurisdiction of the federal government.

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