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Interprovincial trade barriers require concerted effort

Agricultural trade has certain hidden costs that could use mitigation.
wp semi truck
You wouldn’t think there would be any major differences between trucking regulations province-to-province, but there are, and they bog down transportation.
WESTERN PRODUCER —  We spend a lot of time complaining about foreign trade barriers and defending our own barriers to foreign imports.

But maybe there’s a closer way to liberalize agriculture trade.

“It almost feels like we’ve forgotten to take care of business here at home,” said Jared Carlberg, a University of Manitoba agricultural economist during a panel discussion on interprovincial trade.

The province-to-province impediments to trade, including trade in crops, livestock, meat, foods and services, are a significant hidden cost that boosts the price and drags down the efficiency of western Canadian farming.

“Think of it as a hidden GST on any transaction,” said University of Calgary economist Trevor Tombe during the Simpson Centre discussion in early November.

The domestic restrictions on trade exist across industries, professions and systems. They affect everything from construction labour regulations to alcohol controls to professional certifications. Some are minor, but some are challenging enough that they keep out-of-province goods, services and people out of the home province, which is sometimes the purpose.

Most of these things you might expect to follow a national standard in a saner world. But Canada’s constitution hands over control of many economic areas to the provinces, so they’re free to complicate things, for whatever reason.

There have been many attempts to clean up the situation so the economy can run more efficiently. There have been federal-provincial panels and numerous bilateral provincial deals to reduce some barriers. For example, there is a federal-provincial task force on trucking regulations to make the free flow of goods across the country as free from provincial complications as possible. You wouldn’t think there would be any major differences between trucking regulations province-to-province, but there are, and they bog down transportation. There are even differences on allowable truck tires between various provinces.

The western provinces have made a good effort at reducing interprovincial barriers. Alberta, particularly, jumped ahead with a unilateral dropping of many import and out-of-province controls, giving its industries better pricing and access to services for many things.

Tombe said provinces often don’t want to move without a province-to-province or nationwide deal, feeling like they’d be giving up something for nothing, but the gains from moving unilaterally go much of the way toward seizing the potential gains. The provincial controls often hamstring economic performance, even if they are intended to help a few.

It’s hard to act because so many vested interests fight against reducing provincial protections, fearing economic losses to their specific sectors. As well, most people don’t care enough to make interprovincial trade liberalization a political issue.

That’s where farmers, farm organizations and commodity associations need to be working. The people defending costly provincial restrictions work hard to preserve the status quo. Those who would benefit from a relaxation, such as farmers, need to balance the pressure.

We’ll always work to gain better access to foreign markets, but we shouldn’t forget about how much better we can make our home market.