Nova Scotia Premier Tim Houston stands at the podium as he joins Ontario PC Leader Doug Ford on his campaign stop at HPG, a manufacturing facility in Milton, Ont. on Feb. 20.Chris Young/The Canadian Press
The Nova Scotia government has promised to introduce legislation that would ease trade and labour mobility with other provinces, marking the latest push to make Canada less economically reliant on the United States.
Premier Tim Houston said on Thursday the legislation will allow goods that meet regulatory standards in other provinces, but can’t get on shelves in Nova Scotia because of differing rules, to be sold there. The legislation will allow service providers from other provinces, such as teachers and roofers, to work there as well.
Provincial and federal leaders have been targeting internal drags on the economy to offset a potential slowdown from U.S. tariffs. Leaders of all political stripes have said Canada needs to diversify away from the United States, the destination for roughly three-quarters of Canadian goods exports.
Interprovincial barriers – which hinder the flow of goods and services between the provinces – have been identified by policy makers as an obvious area for reform that would deliver an economic boost.
The Nova Scotia Premier said the legislation, which has not yet been tabled, would lift all restrictions for any province that passes the same or similar laws.
“Folks, it’s a two-way street, and my message to other provinces and territories is, ‘Do your part, and we will do ours,’” Mr. Houston said Thursday at a campaign event in Milton, Ont., for Ontario Progressive Conservative Leader Doug Ford.
Canada faces a number of imminent tariff-related threats from the United States that have mobilized federal and provincial leaders. U.S. President Donald Trump’s 30-day reprieve from 25-per-cent tariffs on almost all goods coming from Canada and Mexico is set to expire on March 4. Steel and aluminum tariffs of 25 per cent will follow on March 12. And Mr. Trump has floated additional levies on the auto sector and other industries.
With a federal election looming over Ottawa and Prime Minister Justin Trudeau set to resign in a few weeks, premiers have taken up a larger role in responding to the threat of U.S. tariffs.
Interprovincial trade researcher Ryan Manucha said it’s no surprise that an external threat has pushed the issue to the top of the national agenda. Mr. Manucha said the original version of the Canada Free Trade Agreement (CFTA), which reduced trade barriers within the country, was signed by federal, provincial and territorial leaders in 1995 – just ahead of the Quebec referendum on sovereignty in the fall.
Mr. Houston’s announcement was applauded by business groups that have long called for provinces to accept each other’s regulatory standards.
“It is about as close as we’ve seen a province get to mutual recognition of each other’s rules and regulations,” said Dan Kelly, president of the Canadian Federation of Independent Businesses.
Randall Zalazar, director of government relations at the Chamber of Commerce, said in a statement he looks “forward to reviewing the legislation and seeing other provinces take up the gauntlet.”
At Thursday’s event, Mr. Ford said a re-elected PC government would support a labour mobility deal and would be ready to drop exemptions in the CFTA. He has also promised to allow direct-to-consumer alcohol sales with all willing provinces and territories.
Grace Lee, a spokesperson for Mr. Ford, said that a re-elected Ontario PC government would look at pursuing similar legislation to what the Nova Scotia government has announced.
A 2019 paper published by the International Monetary Fund found that Canada’s internal trade barriers – excluding those related to geography, such as challenges with transporting goods across a country this large – were equivalent to an average tariff of 21 per cent in 2015. The tariff-equivalent of barriers with the United States was estimated to be much lower.
“I have a medical device company back home that says they would love to sell across Canada, but they don’t have the time or energy to deal with the painful nuances of 13 different jurisdictions,” Mr. Houston said. “In the U.S., they deal with one for the whole country.”
The Committee on Internal Trade, made up of federal and provincial officials who supervise the implementation of the CFTA, held an emergency meeting Jan. 31 to discuss how to improve the deal. Internal Trade Minister Anita Anand told The Globe and Mail the committee will present recommendations to premiers and the Prime Minister on reducing the number of exemptions in the CFTA and having provinces mutually recognize each other’s regulations.
Mr. Trudeau and premiers discussed internal trade on Thursday during a meeting on Canada-U.S. relations and Arctic security, according to the Prime Minister’s Office.
Mr. Manucha said while a pan-Canadian approach can be attractive, Nova Scotia’s approach shows provinces don’t have to wait to reach agreement with every jurisdiction on internal trade.
“They’re certainly trying to lead from the front and drag other jurisdictions forward,” he said.
The Trump administration’s tariff threats have also increased interest in resource and energy development in Canada. Natural Resources Minister Jonathan Wilkinson recently said Canada should consider building a west-east pipeline, while the Quebec government said it’s open to the idea.
The B.C. government also announced earlier this month that it would fast-track the approval process for a number of resource projects in a bid to diversify the province’s economy away from the U.S.
Mr. Ford on Thursday called on the federal government to “get out of the way” and remove red tape that impedes energy and resource projects.
“The biggest barrier blocking us from getting our immense resources to market, to getting our critical minerals out of the ground, or building the nuclear power plants that will fuel our economic growth for decades to come. It’s not in Washington, Moscow or Beijing, it’s right here in Ottawa,” he said.