My perspective - Mind-boggling and maddening

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Published on Thursday, August 4, 2016

By Kate Jackman-Atkinson

Neepawa Banner/Neepawa Press

With a relatively small population, Manitoba is a province hugely dependant upon trade.  Whether it’s our crops, livestock or manufactured goods, much of what is produced here is sold outside our borders. Not only that, but much of what we purchase originates from elsewhere.

From July 20 to 22, Canada’s premiers met for their summer meeting in Whitehorse.  While the premiers talked about a number of issues, interprovincial trade took centre stage.  After the two-day meeting, the group came away with an agreement in principle on a new Canada Free Trade Agreement (CFTA). The group said that the agreement is “unprecedented” and will promote trade, investment and labour mobility across the country.

This is an extremely important issue. 

A senate study released in June estimated that “Mind-boggling rules, duelling bureaucracies and maddening regulations” cost the Canadian economy about $1 billion a year.  With uncertainty regarding the future American president’s stand on free trade and possible Brexit ramifications, the Senate Committee on Banking, Trade and Commerce says that reducing internal barriers to trade is especially important. 

Despite Canadians all living in the same country, most of the regulations that govern industry and commerce are provincial. This means that there are, at times, 13 different rules with which a company must comply if they are doing business across the country. 

The unique aspect of the CFTA agreement is the “negative list”, meaning that all provincial government measures will be covered by the agreement, unless specifically excluded. While the list hasn’t yet been made public, this marks a departure from the previous agreement, which instead applied specifically to certain regulations.

The Canadian Federation of Independent Business is celebrating the agreement, noting that it will include a regulatory body to look at red tape issues when it comes to interprovincial trade, long an issue of concern for the organization. CFIB has identified four key areas they would like to see the provinces focus on: Workers Compensation Board (WCB) rules, transportation rules, manufacturing rules and corporate registration.

In some cases, regional rules make sense, but in most cases, they don’t, as shown by some of CFIB’s examples.  When it comes to WCB, regardless of how long a business’ workers are working in a province, that business must register with and administer workers compensation programs in each province.  For cross-country transportation, each province has different rules regarding truck length and signage.  There are different standards for the size of container for certain items, including dairy creamers, butter and drinkable yogurt, which require manufacturers to adapt their machinery in order to produce containers for different provinces. Finally, companies are required to register their corporation in every province in which they do business.

All of these regulations add extra paperwork and act as a deterrent to companies wanting to do business across provincial boundaries, while offering little benefit to Canadian customers, the business or, in most cases, the provincial government.

It makes sense that there are situations in which different provinces need different rules; while an extra long truck is perfectly safe travelling the prairies, that’s not the case when it comes to winding mountain roads. Despite this, a few areas of concerns shouldn’t make it more difficult for all of the situations in which different rules aren’t needed.

In a world of shrinking distances, it’s time to get rid of these archaic differences that made sense at a time when few companies expanded beyond their province and transportation was dominated by rail lines. In a world of shrinking borders, ease of trade becomes increasingly important for firms that want to meet the needs of customers across the country. Today, a business can just as easily have customers from Vancouver or PEI as down the street and duelling provincial regulation shouldn’t be what’s holding these companies back.