As a looming trade war with the U.S. has lent urgency to unlocking east-west trade within Canada, the province of British Columbia has withdrawn two of its exemptions under the Canadian Free Trade Agreement. Traffic moves along Highway 1 in Burnaby, B.C..DARRYL DYCK/The Globe and Mail
British Columbia joined the federal government on Friday in lifting some of its interprovincial trade restrictions, just days before the United States intends to impose punishing tariffs on Canadian imports.
At a meeting of provincial and territorial trade ministers, B.C. withdrew two of its exemptions under the Canadian Free Trade Agreement (CFTA): one that restricted investments in fisheries, and another that could be used to limit government procurement.
The looming trade war with the United States has lent urgency to a decades-long effort to unlock east-west trade within Canada.
Ottawa says eliminating internal trade barriers could add an extra $200-billion to the Canadian economy and minimize the impact of U.S. President Donald Trump’s looming tariffs.
“What we found in the room today is more substantive and dramatic movement than we’ve seen in meetings before, and really coming so much closer to meeting that goal,” Diana Gibson, British Columbia’s Minister of Jobs, Economic Development and Innovation, told reporters following the meeting of the Committee on Internal Trade in Toronto.
“I really am confident that you will see substantive changes in the movement of business and services, that allows that economic activity to grow, and we’ll see that GDP impacts coming.”
Last week, the federal government moved to eliminate 20 of 39 federal exemptions under the CFTA.
Earlier this week, Nova Scotia Premier Tim Houston introduced a bill aimed at reducing interprovincial trade barriers. B.C. Premier David Eby complimented the proposed legislation and said his province may table something similar.
The first exception that B.C. has dropped is a tit-for-tat measure that allowed the province to impose reciprocal restrictions on other jurisdictions that limited B.C. suppliers’ access to procurement opportunities.
The second lifts investment restrictions in the fisheries sector.
Federal Transport and Internal Trade Minister Anita Anand went into the meeting asking the provinces to recognize out-of-province labour certifications and regulations.
Former Alberta premier Rachel Notley, who is a member of the Council on Canada-U.S. Relations that was established by Prime Minister Justin Trudeau in response to the trade dispute, said Friday that taking down internal trade barriers is just one of the changes Canada must make as it adjusts to a new economic reality.
“The reality is that the uncertainty is having a tremendous impact in places all over the country,” Ms. Notley said in an interview. “We have to understand that this is a change in the relationship that has existed for decades and decades and decades – since post-Second World War – and all levels of government have to start thinking about how we envision the way we conduct ourselves in this new reality, and that’s probably the best way to handle this.”
She said that includes taking down interprovincial trade barriers where possible, as well as working together to reach non-U.S. markets abroad.
“We need to be looking at ways to provide sovereignty and sustainability on an East-West basis, separate and apart from some market development, but just in terms of our own security needs, like around energy,” Ms. Notley said.
The council, which was announced in January includes leaders in business and labour as well as former politicians and strategists, is set to meet Monday, one day before the U.S. is set to impose broad tariffs on Canadian imports.
Mr. Trump says that planned 25-per-cent tariffs on most Canadian exports, and a 10-per-cent levy on Canadian energy products, are set to take effect Tuesday.
Recent provincial budgets in Alberta and Nova Scotia are forecasting significant deficits - even the threat of tariffs has shown signs of dampening the Canadian economy.
Ms. Notley is urging the provinces to protect their social safety nets as the economy is buffeted. “When you have a serious economic shift, you know that the folks that feel it the most are the most low-income and most vulnerable parts of our society. And so whatever we do, we need to be focused on supporting them, so that we don’t create a whole secondary kind of crisis developed to inequity,” she said.
With files from The Canadian Press