OTTAWA, April 7, 2017 – The newly-announced Canadian Free Trade Agreement (CFTA) between Ottawa and the provinces fails to create the unified barrier-free national economic space that Confederation promised us 150 years ago.
Brian Lee Crowley, MLI’s Managing Director, says the provinces’ public jubilation over the Canada Free Trade Agreement is just hollow ballyhoo.
With this agreement the premiers continue cavalierly to negotiate away Canadians’ rights to work, buy and sell in every part of the country under uniform and fair rules. This is not an issue exclusive to big corporations – it concerns the rights of every Canadian to exercise their skills or profession and to earn their living in every part of Canada on a level playing field.
In reality the agreement is more preoccupied with establishing and protecting the exceptions to free trade within Canada than it is to establishing and protecting that fundamental principle.
“The new deal is the longest suicide note in history, proclaiming as it does the final demise of any hope that the premiers could be persuaded to respect the right of Canadians to exercise their profession and skills and to sell their goods and services anywhere in Canada”, says Crowley.
The Macdonald-Laurier Institute’s work has demonstrated that asking the provinces to tear down the barriers they have themselves created is an enterprise doomed to failure. The CFTA proves that such an idea is now thoroughly bankrupt, says Crowley.
The Canada Free Trade Agreement does represent modest progress on reducing barriers to government procurement. It also creates stiffer penalties for failure to abide by the agreement. But the single biggest innovation in the agreement, the so called “negative list” of exclusions to the principle of free trade, is in fact an “own goal” by the premiers. Since the exceptions represent the majority of the new agreement, the negative list approach at last lays bare the true scale of the barriers to free trade in Canada for all to see. Rather than making actual progress, “the provinces have simply been forced to make explicit the barriers they have no intention of dismantling”, says Crowley.
Indeed, leaving aside the field of government procurement, it is hard to see what specific barriers this agreement does dismantle, despite all the hype. Liquor, wine and beer are not liberalised; they will be the subject of yet more discussion. Ditto for regulatory conflicts, financial services and more.
The agreement’s approach to dispute resolution provides further evidence that little has changed. Provinces are still unwilling to submit to testing their barriers in the court should a dispute arise, and Canadians are the big losers.
“Governments truly committed to removing the barriers to Canadians exercising their economic rights should be prepared to commit themselves legislatively to that basic principle, and have independent judges determine whether the law has been respected”, says Crowley.
The way forward remains clear, says Crowley: Ottawa has both the power and the duty to strike down the economic barriers that separate Canadians. Indeed that was one of the chief purposes for which the federal government was created 150 years ago. The best way to do this, according to groundbreaking work on this matter carried out by the Macdonald-Laurier Institute, is for Ottawa to create a Charter of Economic Rights.
This would force any jurisdiction that offended against Canadians’ right to buy or sell their goods and services and to exercise their skills or professions anywhere to be called to account under the law – rather than answering to federal-provincial bureaucrats who view trade not as a matter of the rights of Canadians, but simply as a matter of interprovincial bargaining.
However the new agreement may ultimately be irrelevant. There are currently important cases before the courts that could help bring down the system of provincial barriers.
A recent decision in New Brunswick, which ruled in favour of a man who was charged for transporting beer across provincial boundaries, has far-reaching implications for knocking down internal trade barriers in Canada – particularly if it moves up through the court systems until it reaches the Supreme Court. The new Canada Free Trade Agreement makes it more clear than ever that leadership will not come from the provinces. The best hope for Canadians’ economic freedom lies with the federal government and with the courts.
Brian Lee Crowley is the Managing Director of the Macdonald-Laurier Institute.
The Macdonald-Laurier Institute is the only non-partisan, independent national public policy think tank in Ottawa focusing on the full range of issues that fall under the jurisdiction of the federal government.
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