Alberta has the fewest obstacles to trade within Canadian borders, according to a report released on Thursday by the MEI (Montreal Economic Institute) and the Canadian Constitution Foundation.
The Internal Trade Provincial Leadership Index developed by Mark Milke ranks the provinces and territories according to their number of barriers to trade, as measured by exceptions to the Canadian Free Trade Agreement. Alberta had the fewest while Quebec had the most.
“Alberta recently decided to unilaterally eliminate most of its exceptions to the CFTA, which is a big part of why it’s in first place. It is an example to follow for the other provinces,” said Milke, senior fellow at the MEI.
“Trade barriers between the provinces are very difficult to justify in their own right. It’s even more striking when you tack on their very significant economic cost.
“Several possible solutions exist: continuing to negotiate to remove exceptions, making increased use of the ‘passport’ system, or simply acting unilaterally, as Alberta and Manitoba have done. It’s not a zero-sum game: Every barrier eliminated benefits the country as a whole, including the province that has eliminated it.”
In the ranking, British Columbia and Manitoba tied for second after Alberta, followed by Saskatchewan in fourth place.
The report said Statistics Canada estimates that the multitude of trade barriers within the country equate to a 6.9 per cent tariff selling between provinces. Some economists calculated that abolishing these barriers could add from $50 billion to $130 billion to Canada’s overall gross domestic product. This represents between $3,500 and $9,200 per Canadian household every year, said Milke’s report.
The MEI is an independent public policy think-tank. The Canadian Constitution Foundation is a registered charity, independent and non-partisan, that defends the constitutional rights and freedoms of Canadians in the courts of law and public opinion.
“Canada was founded in part to create, out of the different provinces, one single country with one market. Politicians of the day like John A. Macdonald and George Brown were clearly in favour of unrestricted trade between the provinces, and our Constitution contains a clause that specifically endorses this. After 152 years, it is high time to let Canadians fully enjoy the benefits of free internal trade,” concluded the report.
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