Ontario Premier Doug Ford and Nova Scotia Premier Tim Houston sign a memorandum of understanding on interprovincial trade at a press conference in Toronto on April 16.Arlyn McAdorey/The Canadian Press
The Ontario government is introducing its promised legislation to start taking down barriers that frustrate trade between provinces, changes Premier Doug Ford says are needed to boost economic growth within Canada as the country faces down U.S. President Donald Trump’s tariffs.
Mr. Ford, who announced the move at a press conference on Wednesday, cited figures from economic studies suggesting that dropping these barriers could add $200-billion a year, or as much as 8 per cent, to Canada’s gross domestic product.
But some economists – including one whose estimates were cited by the Premier – caution that the effects of piecemeal measures may be hard to notice, and that even a massive slashing of trade barriers would take years or decades to make a large impact.
Premiers, federal politicians and business leaders across the country have been discussing opening up trade within Canada to shore up the country’s economy, amid the loss of access to U.S. markets because of the current and potential future tariffs imposed by the White House on Canadian goods.
The national committee on internal trade, with representatives from all provinces and territories, agreed Wednesday to produce a pact on the mutual recognition of goods by the end of June, said Diana Gibson, B.C.’s Minister of Jobs, Economic Development and Innovation.
Federal Liberal Leader Mark Carney has said his government would remove any federal barriers to internal trade in Canada, vowing legislation by July 1. Conservative Leader Pierre Poilievre has also promised to bring premiers together to remove trade exemptions and standardize national rules for trucking and medical professionals.
Mr. Ford also signed memorandums on trade liberalization with Nova Scotia Premier Tim Houston and New Brunswick Premier Susan Holt in Toronto on Wednesday. Nova Scotia and Prince Edward Island are among the provinces that have already introduced similar trade-barrier legislation. But it was unclear how many and how quickly other provinces would follow suit.
“The cost of these barriers to our economy is absolutely enormous,” Mr. Ford told reporters. “You talk about tariffs, my goodness. We’ve been tariffing each other, it seems, for decades, generations actually.”
His government’s new bill, the Protect Ontario Through Free Trade Within Canada Act, would see the province recognize the standards or rules of other provinces for goods, services and registered workers – such as those in skilled trades or the health sector – provided those provinces have also passed similar “reciprocating” legislation recognizing Ontario’s regulatory regimes.
But the details still must be worked out through the drafting of regulations to cover each province that passes a similar bill. The proposed legislation was welcomed by business groups.
One easy-to-understand change Mr. Ford announced is a move to allow Ontario consumers to order booze directly from alcohol producers in other provinces that drop their own similar existing barriers, and vice versa.
But just how much broader impact some of Ontario’s proposed changes would have is harder to grasp. Among the first examples Ontario officials provided in a technical briefing on the bill Wednesday were rules that govern reflective safety vests for construction workers, which differ among provinces.
The changes could also see other provinces accept each other’s standards for truck signage and lighting requirements for oversize loads – rules that currently require some trucks to stop when crossing provincial boundaries to change their signs, flags or lights.
The bill also targets all 23 of Ontario’s current exceptions under the existing Canadian Free Trade Agreement between provinces, which include residency requirements for hunting and driving-school instructors but also allow Ontario to favour its own energy and natural gas companies, maintain its liquor monopoly and privilege local growers of wild rice and grapes for wine.
Marc Lee, a senior economist with the B.C. office of the Canadian Centre for Policy Alternatives, has argued that economic studies promising huge gains from reducing trade barriers are based on abstract formulas and that reality will likely be more complicated.
“There is a major disconnect between the big high-level numbers that are being thrown around” and the measures being proposed, he said, although some are sensible reductions in red tape. “Don’t put any money on this actually delivering massive economic growth.”
University of Calgary economist Trevor Tombe, whose study for the Macdonald-Laurier Institute is among those cited by the Ontario government, said the $200-billion growth figure Mr. Ford cited was the “upper end” of the range of his estimates. The figure also assumes a massive levelling of trade barriers far beyond anything put forward by any province so far.
To achieve “anything close to the estimates we’re presenting here involves provinces basically removing all conceivable differences between their jurisdiction and every single other one in Canada,” Prof. Tombe said. “And that is not what is being proposed here by the government of Ontario.”
He still praised Ontario’s move, but said it would take years before dismantling provincial trade barriers would have the desired economic impact.
Both Ontario’s NDP and Liberals said they support the principle of breaking down interprovincial trade barriers but were awaiting details of the bill. NDP Leader Marit Stiles said she is concerned about a “race to the bottom” for provincial health and safety standards that could result from the recognition of other provinces’ regulations.
Ms. Gibson, B.C.’s minister responsible for reducing interprovincial trade barriers, welcomed the introduction of Ontario’s bill. B.C. introduced its Bill 7, the Economic Stabilization (Tariff Response) Act, which would empower legislators to strip away interprovincial trade barriers, in March.
“It’s great to see other jurisdictions coming to the table on that,” Ms. Gibson said.
With reports from Laura Stone and Justine Hunter