BURST
B.C. Jobs Minister Ravi Kahlon signed an agreement with all other provinces and territories on Wednesday that he says will allow for free movement of most goods across Canada by Christmas.
The deal, spearheaded by B.C., provides mutual recognition of standards for clothing, children’s toys, automobiles and more, although food and liquor have been excluded for now.
It means that if a good is deemed acceptable in one province or territory in Canada, it is acceptable to all 13 provinces and territories.
Kahlon told reporters the agreement is a big step in the fight to ensure Canada’s economy remains strong in the face of the tariff war with the United States and provide more choice for B.C. consumers.
“For businesses, it means they can sell across Canada, save time and cost, have a bigger reach, grow and create new jobs,” said the minister. “For B.C. consumers, it means more choices, competitive pricing and the same trusted standards across the country.”
Here are three things you need to know:
How does the new agreement break down barriers?
Currently, each province and territory has a patchwork of rules and regulations that govern things like worker safety, product labelling, and licensing.
The business community argues that these requirements unduly hurt the flow of goods through added costs and time spent filling out paperwork that many businesses don’t have the capacity for.
Ryan Mitton, the B.C. director of legislative affairs for the Canadian Federation of Independent Business, said examples include e-bikes, with different provinces having different rules for rim size and maximum weight, and hockey helmets, with different requirements for visors and cages.
He said the new agreement will scrap individual rules and allow for products to be sold in all provinces and territories so long as they meet the requirements of one jurisdiction.
“When you come and do business here, we will recognize your standards as good enough for our province, so long as you agree to recognize our standards and allow our workers and companies to go do business in your province as well,” said Mitton.
What could be the impact of the agreement on the economy?
Numerous studies have tried to quantify the amount that interprovincial trade barriers cost the economy annually, with one recent report from Deloitte calculating there currently is an effective tariff of 6.9 per cent on goods moving between provinces and that removing those impediments could add $80 billion to Canada’s real GDP.
Another analysis by University of Calgary economist Trevor Toombe says tackling the problem could be a boon to the country’s economy to the tune of $200 billion.
Closer to home, the Greater Vancouver Board of Trade estimates that removing internal barriers to trade could add $7.6 billion to B.C.’s GDP and funnel $1.7 billion in new revenue into government coffers.
Bridgitte Anderson, the CEO of the board, said many businesses over the years have simply given up rather than go through the arduous process of meeting the requirements to sell in other jurisdictions.
“Some of the examples over the years have been things like baby car seats and toilets and tires, just products and goods that are just so difficult to trade within Canada,” said Anderson.
What are the drawbacks?
Jeff Guignard, the CEO of Wine Growers British Columbia, said that while the agreement is a great first step, he is disappointed that food and wine have yet to be included.
He said it is currently illegal for B.C. wineries to directly ship to customers in most parts of Canada. Even Alberta, which has signed a direct-to-consumer agreement with B.C., has installed a new wine tax.
“At the end of the day, it makes no sense that it’s easier to ship a case of wine from B.C. to Texas than it is to Alberta or to Ontario,” said Guignard.
“It doesn’t make any sense that we don’t have Canadian wine sections in provincial liquor stores across B.C., Ontario and Quebec and other places.”
Marc Lee, Canadian Centre for Policy Alternatives senior economist, said the whole debate over interprovincial trade is simply political posturing so that provinces and the federal government can seem like they are doing something to respond to Trump’s tariffs.
He said that many of the policies viewed as interprovincial trade barriers are actually safety standards meant to keep people safe and don’t meaningfully impede trade. Food and alcohol, the two areas he said are actually impacted by interprovincial trade barriers, aren’t included in the deal.
“Apparently, we have all these provinces that are manufacturing car seats and can’t sell them in other provinces. That’s complete garbage. Car seats are regulated on a North American wide basis, we have this whole standards body that deals with stuff like that,” said Lee.
“There’s different environmental standards, consumer protection, worker health and safety. Those are the big buckets where there tends to be some differences from province to province … is that difference actually causing costs to business? Is it actually disrupting any trade? I don’t think that there’s any evidence of that.”