A Grand Bargain on Interprovincial Trade

By January 28, 2019June 25th, 2020No Comments

The barriers that prevent Canadians from trading their products and services and exercising their professions are real and costly and hurt Canada’s international competitiveness. The Macdonald Royal Commission calculated the cost of these barriers was as high as 1.5 percent of GDP annually, a stunning loss of national prosperity. More recently Statistics Canada took the barriers and measured them as if they were tariffs at the provincial borders. Their conclusion: the barriers that exist in Canada, taken together, are the equivalent of a seven percent tariff.

In other words, it is as if each province levied a tax of seven percent on all goods and services entering from another province. And seven percent is merely the average. Some “tariffs” are as high as 50%. It is hard to imagine a policy more damaging to Canadian competitiveness.

To fix this, Brian Lee Crowley and Manitoba Premier Brian Pallister argue that Ottawa needs to shoulder interprovincial trade while freeing the provinces to run health care.