Forget NAFTA, Canada needs a Free Trade Agreement with itself


When it comes to the production and sale of many goods, Canada is more of an archipelago of provincially-protected cartels than it is a free market. At least, that is how the norms of commerce within our borders have played out for decades. The arbitrary nature of laws that govern how much booze we can haul across provincial lines, for instance, are absurd. The days of provincial protectionism may be ending though, as possibly unconstitutional laws receive some well-deserved scrutiny. Thanks to Gerard Comeau, a citizen who decided to drive to Quebec from New Brunswick to take advantage of the lower liquor prices (1), Canadians have finally seen how nonsensical the implementation of these laws really is. So monumental is this seemingly simple event that it is going all the way to the Supreme Court of Canada. The binding decision will permanently affect the future of inter-provincial trade.

Every province has laws that regulate the production and sale of goods to such a high degree that, in some cases, it is easier to buy from foreign countries than a neighbouring province (2). To add to the complexity, many of the provincial governments who monopolize the retail sale of alcohol and are now considering the same model for marijuana (3). Thus, the fortunes of a provincial government are tied to their ability to maintain  these monopolies. In British Columbia, liquor was sold exclusively in government stores until quite recently and the governmental scheme is still in place in Ontario. This problem may seem like it should only concern a small handful of us malcontented inebriates, but the ethos of protectionism extends to more than just alcohol.

In Quebec, independent maple syrup producers have been fined hundreds of thousands of dollars each for having the chutzpah to make and sell the stuff on their own properties (4) without going through the Federation of Quebec Maple Syrup Producers; a body that is seemingly designed to protect what has, in one Vice exposé, been called a “maple syrup mafia” (5). Dairy farmers have also run afoul of regulators both in B.C. (6) and Ontario (7) for selling raw milk to the public. While the B.C. government claims that this is due to the “health hazard” that raw milk presents, a practical effect of the strict enforcement of this rule is that it further protects large producers from smaller ones and prevents organic and alternative farmers from competing. These policies may stabilize the price of agricultural goods and insulate producers from global market conditions for better and worse, but they undoubtedly have a negative effect on consumers. Canadians overpay for staple foods by about three-billion dollars a year (8). Holding up the supply management regime and the interests of large-scale farms and OPEC-like trade bodies directly harm the national economy and the purchasing power of individual consumers.

As the NAFTA talks wind on and the push-pull between the obscure demands (9) of our Liberal government and the unpredictable Trump administration continues, it would seem that there may be some pressure (10) on our politicians to consider deregulation to remain competitive. But our confederation is a curious political construct and has left us with a historical legacy in which some provinces have an antagonistic relationship to the others. No premier wants to give up the captive market their region enjoys for fear that their producers will lose their pricing advantage and the government tax revenue that comes with it. Why should Quebec let just anyone sell maple syrup and airplanes? And why should Vancouverites let Albertan oil into Asian markets through a pipeline that will ruin their oceanfront view? I would like to hope that the answer to these questions is national prosperity and fair-play for businesses, but maybe like the cancelled Energy East project that once again set province against province, a truly functioning free trade zone inside of Canada may just be a pipe dream for the foreseeable future.

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