August 19, 2014 4:41 pm
Updated: August 19, 2014 7:55 pm

Feds to lay out plan for provinces to break down trade barriers

WATCH: Global News has learned the federal government has devised a plan to tackle what some might call archaic trade barriers between provinces. Jacques Bourbeau has the details.

Federal Industry Minister James Moore is putting the heat on provincial leaders to eliminate the trade barriers and bureaucratic red tape he blames for preventing goods made in one province from making it to store shelves in another.

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Global News

Moore, in a document obtained by Global News ahead of its release to provincial and territorial leaders, said he wants the “web of rules” hindering trade to be simplified. He also lays out how he wants to remodel the two-decade-old Agreement on Internal Trade (AIT).

It’s actually easier for an Ontario beer company, for example, to ship suds to the United States than it is to get them across the river into Quebec because of interprovincial trade barriers.

Provincial restrictions can affect everything from the size of a coffee creamer container different provinces can carry on their shelves, to the size of tires truck drivers must have on their vehicles when transporting goods across provincial borders.

READ MORE: 5 ways trade barriers are harming Canada’s economy

“Conflicting and inconsistent rules and regulations across jurisdictions raise costs for businesses, hinder mobility for workers and limit choice for consumers,” the document, titled One Canada, One National Economy read. “Furthermore, differences in standards between the provinces and territories, as well as differing regulatory and reporting requirements, can affect the decisions businesses make on where they operate.”

According to the Canadian federal government, current barriers cost the economy at least $3 billion. Minister Moore has touted a figure as big as $50 billion per year.

It appears the minister plans to replicate the government’s approach to a pair of recently negotiated international trade deals to boost internal trade — the Comprehensive Economic and Trade Agreement (CETA) and the Canada-Korea Free Trade Agreement.

The One Canada framework would encompass “all goods and services” the document said, while leaving room for exemptions on a case by case basis.

The AIT, according to the document, follows an “outdated” approach by singling out specific goods to be covered.

“Most modern trade agreements cover all goods and services, except for those that are explicitly identified and exempted,” the department document said. “A brand new trans-Canada partnership could be negotiated on the basis.”

The federal government is aiming to have an agreement in place, with all provinces on board, by the end of this year, whether it’s a revamped version of the AIT or completely scrapping AIT altogether and starting anew.

All provinces and territories (minus the not-yet established territory of Nunavut) signed on to the AIT in 1995.

Moore, speaking to Global News in June, warned doing nothing to change the current situation is not an option.

Still, there are holdouts among provincial and territorial leaders who aren’t keen to change everything entirely. While western premiers are receptive to a trans-Canada deal, Ontario is apprehensive – and it’s not just about making it easier to buy British Columbia booze.

Removing trade barriers could open the doors to allow out-of-province companies to bid on infrastructure projects, possibly jeopardizing local jobs, Ontario Finance Minister Charles Sousa warned last month.

To address those reservations, Moore’s department has tabled a “new, fast, reliable dispute settlement mechanism” the minister hopes can solve trade disagreements. The document also recommends a new federal co-chairmanship of the Committee on Internal Trade.

The document said future products and services that come to market will also automatically fall under the new free trade legislation.

With files from Jacques Bourbeau, Jamie Sturgeon and The Canadian Press

© Shaw Media, 2014

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