A new Statistics Canada survey has revealed that interprovincial trade barriers are costing Canada’s economy hundreds of billions of dollars a year. The first-ever survey of its type by the agency, released on February 14, found that 41% of businesses bought goods and services from another province, while 26.9% sold goods and services in another province. Nearly 90% of businesses that didn’t engage in cross-province commerce indicated there was “no need or interest in doing so.”
Opening interprovincial trade has risen to the top of the national agenda in the wake of US President Donald Trump threatening to impose tariffs on Canada and the country’s sovereignty. Experts, including Ryan Manucha, lawyer and trade researcher at the C.D. Howe Institute, said that the window it opens into businesses’ day-to-day struggles gives politicians the necessary ammunition to free up trade across the country.
The top complaint businesses face in interprovincial trading is the cost of transportation, followed by delays in placing and receiving orders and distances between a starting point and a destination. This resonates with research by Manucha and Tombe on the barriers created by different transportation rules and regulations from one province to the other, including varying qualifications and long-truck laws that the pair estimate cost about $1.6 billion a year.
The survey went out to 30,000 businesses, with 20,000 responding. There are currently no plans to repeat the survey, but that could change in the future. One of the other nuggets Manucha noticed in the survey was that it asked about seemingly innocuous things such as paperwork, which businesspeople perceive as more of an annoyance than a trade barrier.
Source: Financial Post
