Interprovincial trade barriers costing us billions, says new Senate report
In Alberta, there are some types of trucks that can only be driven during the day, but those same trucks can only be out at night in B.C.
It may sound odd, but such restrictions are commonplace when it comes to trade regulations between Canada's provinces. Whether it's discrepancies with regards to labelling, packaging, or content, there are multiple factors that prohibit the movement of goods nationally and end up costing the economy billions of dollars.
A senate committee's newly released report has found that these interprovincial trade barriers need to be torn down in order to facilitate business nationally, and make it easier for the consumer to access products.
Perrin Beatty, president and CEO of the Canadian Chamber of Commerce, says such trade obstacles are among the top ten barriers to Canadian competitiveness. In fact, Beatty was recently in Saint John, N.B., where he bought some local cheese, which he brought back to Ottawa.
"I'm hoping the cheese police aren't listening, but you're not allowed to move this across provincial boundaries. The same if I were to go from Ottawa to Gatineau ... with a bottle of wine, I'd be breaking the law in Canada in doing that."- Perrin Beatty, president and CEO of the Canadian Chamber of Commerce
While the "cheese police" may sound amusing, such restrictions have far reaching consequences. Beatty says the senate estimates three to seven per cent of Canada's GDP is lost to these interprovincial trade barriers every year.
And it's not just cheese. Steve Beauchesne, CEO of Beau's All Natural Brewing Company, which is based in Ontario, says it took eight years to get his beer into Quebec stores. In the end, Beauchesne's company spent over $100,000 to get the approval required to expand into the neighbouring province.
Effects on our healthcare system
Gerry Harrington, vice president of policy and regulatory affairs at Consumer Health Products Canada, says such strict trade regulations also have a considerable impact on our health care system. Harrington explains that when a medicinal product is able to prove to Health Canada that, when labeled appropriately, it is safe to sell without a prescription, what follows are a series of identical checks at the provincial level.
The subsequent processes made by the provinces mean that there can be years of delay before what's available in a pharmacy on one side of the country is approved on the other. In comparison to other countries, Canadians stand to wait between seven to nine years before a medication that's been deemed acceptable for over-the-counter sale in the States or the European Union, becomes available.
As Harrington puts it, the outcome is the same — the product will inevitably be available — but in the interim, that's years "where Canadians are needlessly having to go to the doctor to obtain a prescription."
As for the challenge of actually doing away with these interprovincial trade barriers? Trevor Tombe, assistant professor of economics at the University of Calgary, says what essentially needs to happen is a streamlining of the rules, but notes that some provinces and businesses actually benefit from province-specific regulations.
"We want to be able to expand the productive firms, allow them to serve as many customers as they can, and we do want to scale back the unproductive firms and governments have a role in facilitating that adjustment, but what the barriers do is prevent that adjustment from taking place."
This segment was produced by The Current's Pacinthe Mattar, Julian Uzielli and Willow Smith.