Alberta businesses, experts say now is the time to eliminate interprovincial trade barriers

“We need to galvanize and we need to unite Canadians under one flag — as nation we need to stop siloing each other because everybody knows you are stronger, you’re much more effective, you negotiate better as a team and I think it’s critical now that Canada supports Canadians.”

That, said Jamie Parker, owner of Canadian Heritage Roasting Company is the only way Canadians can protect themselves from U.S. President Donald Trump’s threats of economic war against Canada.

Parker’s Calgary-based business sells whole bean and instant coffee — with the majority of his customers in Canada, but also about five per cent of sales in the U.S..

With Trump’s ongoing threat of steep tariffs against Canadian imports, Parker has shifted his focus to expanding his sales in Canada.

“We really want to capture the Canadian base, be Canada’s coffee, and really that’s where we’re looking at right now,” said Parker.  “We’ve just focused either internally on Canada or to export to regions that aren’t going to be tariffed.”

And the recent “Buy Canadian” sentiment amongst consumers is also paying dividends.

“We’re actually seeing a ton of reach-outs from national retailers that are trying to procure more Canadian-made or products of Canada companies,” said Parker, “which is really cool.”

But one of the biggest issues facing businesses wanting to expand to other provinces is interprovincial trade barriers.

The results of a survey released this week by the Canadian Federation of Independent Business shows that 90 per cent of small businesses said removing internal trade barriers should be a priority for governments and half of them (50 per cent) said internal trade barriers harm production and expansion plans.

Bradlee Whidden, senior policy analyst with the CFIB, calls them an unnecessary cost and a burden on the Canadian economy, consumers and businesses.

“They cover everything,” said Whidden.  “It’s the costs and hurdles that government regulations and rules add to the movement and trade of goods, services and workers. It could range from dental hygienists having to spend time and money getting certified in a new jurisdiction, or consumers being unable to get alcohol from a different province shipped to their house.”

While Canadians can’t control what Trump does, said Whidden, we do have control over the trade barriers in our own country and we need to make it easier for goods and services to be sold across provincial boundaries.

“There are businesses in Alberta and across the country that have said it’s actually easier to trade with the United States than with other provinces within Canada, which is absurd,” said Whidden.

“It’s a big burden on productivity, a big run on our economy. The International Monetary Fund estimated if these barriers were removed, it could boost our economy by four per cent, which would be a big lift at a time when Canadians need it,” said Whidden.

“The rules and costs that governments impose play the same role as the tariff.  It’s estimated that there’s an effective tariff rate of 21 per cent on average between Canadian provinces, which is almost the same as what Trump is proposing to levy against Canada.”

The CFIB is urging all governments to work together to remove internal trade barriers.

The challenge, said Martha Hall Findlay of the University of Calgary School of Public Policy, is deciding what the universal standards and regulations should be.

“One really good example I’ll use — and this is not surprising — but the trucking requirements in Saskatchewan are different from the trucking requirements in Alberta and B.C.,” said Hall Findlay.  “Alberta and B.C. have big mountains and steep roads that require different safety regulations and different wheel requirements than you might need in Saskatchewan.”

“You can’t just assume everybody is going to go to the lowest standard,” added Hall Findlay.  “You can’t expect the same trucking requirements in Saskatchewan as in Alberta, B.C. because of the mountains and the snow.”

Hall Findlay said a recent study that she and a colleague did on the issue of interprovincial trade barriers showed there’s “a lack of data.”

“The provincial representatives were saying to us over and over, ‘We’d love to be able to have inter-Canadian trade, but we don’t know what the regulations are in the other provinces.’ We know it’s better for the Canadian economy, we just don’t know what that looks like for us. We don’t have the data. We don’t have the resources to bring somebody in to actually do that full analysis from a cross-country perspective,” added Hall Findlay.

And that, explained Hall Findlay, is where the federal government can play a role — because it can’t simply strong-arm the provinces into getting rid of interprovincial trade barriers.

“Constitutionally, the provinces each have the jurisdiction to make some of these decisions — whether for safety or for health, those are all provincial jurisdictions. So the federal government really can’t go in and say, ‘You need to do this,’” said Hall Findlay. “But the federal government can help immensely in bringing the provinces and the territories together and providing the resources” to compile that data.

And for the process to work effectively, said Hall Findlay, all the provinces need to work together.

“If there’s one holdout, if there’s one province that has a different requirement for the size of the milk box (for example) then the manufacturer has to have two different sizes, right?”

If the European Union, which is made up of independent sovereign countries, can figure it out, Canada should be able to, said Hall Findlay. “If we do not take advantage of this opportunity that Trump has presented, shame on us.”

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