Removing interprovincial trade barriers can benefit ag

Removing interprovincial trade barriers can benefit ag
Oct 15, 2021

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The removal, however, can be challenging, an ag economics professor said

By Diego Flammini
Staff Writer
Farms.com

Interprovincial trade barriers are standing in the way of Canadian ag contributing even more to the country’s success.

But figuring out how to navigate those barriers is the challenge, said Jared Carlberg, an ag economics professor from the University of Manitoba.

“For reasons that are understandable but pertain more to politics as opposed to sound economic policy, we are having this considerable loss to the Canadian economy,” he told Farms.com. “There are significant economic gains to be made by lowering restrictions on the free flow of goods and services to provinces in Canada.”

Carlberg authored a paper on how Canada can increase interprovincial trade through barrier removal.

These measures include encouraging courts to interpret legislation differently and potentially having the federal government implement broad stroke approaches to maximize trading opportunities.

But because some responsibilities fall on a province’s shoulders, a one-size-fits-all system may not work, Carlberg said.

“In the end it’s up to the courts to interpret the Constitution, and they have interpreted the law to mean that provinces have the rights to put reasonable limits on goods and services,” he said.

Trade negotiations between provincial governments could also help.

The New West Partnership Trade Agreement between the four Western provinces has been in full effect since 2013. It creates a free trade zone between B.C., Alberta, Saskatchewan and Manitoba.

Other similar partnerships could help the remaining provinces too.

“The distance between New Brunswick and Alberta doesn’t matter because no good would likely get there in time anyway,” he said. “But when you’re talking between Ontario and Quebec or Quebec and New Brunswick, that’s where there’s opportunities for more trade.”

Canada is missing out on billions of dollars in potential economic growth.

In his paper, Carlberg references a 2019 study which determined Canada’s GDP would increase by almost 4 percent if trade between provinces was completely liberalized. This equals about $92 billion per year.

“That’s a really considerable amount,” Carlberg said. “Even if it were half of that, it would be really considerable.”

For context, Ecuador’s entire GDP in 2020 was about $98 billion

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