My perspective - Trading places
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- Published on Thursday, March 8, 2018
Kate Jackman - Atkinson
Neepawa Banner & Press
While most people think of trade agreements in international terms, trade between provinces isn鈥檛 always as free as we think. In November 2016, 水果视频 joined the New West Partnership, which aims to create a western Canadian free trade zone. The goal of the agreement is to allow for the better mobility of trade, investment and labour, with the end result of reducing costs. The original partnership was signed between British Columbia, Alberta and Saskatchewan in 2010 and came into effect in 2013.
For those of us who live and work in one province, it鈥檚 easy to forget that there are interprovincial barriers to trade. A Statistics Canada report published last fall found that between 2004 and 2012, interprovincial barriers to trade amounted to a 6.9 per cent tariff. These manifest themselves in a number of different ways. For example, a lack of cross provincial recognition of professional and trade credentials can make it hard for workers to change provinces and business registration requirements mean companies have to complete an often duplicate registration process for each jurisdiction in which they want to do business. Additionally, in each province, there are often different rules and regulations. While you might not have to stop and pay duty at the provincial border, for some products, such as alcoholic beverages and dairy products, there are substantial non-tariff barriers to trade.
The New West agreement creates a trade block of $11 million people, with a combined GDP of over $750 billion. The partnership has two major components. The first is that it opens government procurement contracts to any bidders within the partner provinces. This applies to all levels of government, including health authorities, school boards and Crown corporations. The trade deal also allows seamless registration of a business in more than one province.
As a province that relies heavily on trade, trade deals are good news for 水果视频ns, but the deal doesn鈥檛 entirely level the playing field. While 水果视频 businesses can now bid on contracts for the Alberta government, the different tax rates and costs of doing business remain. The deal doesn鈥檛 take into account the differing rates of PST or the fact that 水果视频ns pay more in income taxes. It also doesn鈥檛 let residents do business in the cheapest jurisdiction. For example, the New West document specifically states that a person must license and register their vehicle in the province where they live and not wherever it鈥檚 cheapest.
Despite the intent of the agreement, other partner provinces are finding ways around the rules. In December, the Saskatchewan government announced that for new Ministry of Highways and Infrastructure projects, vehicles with Alberta licence plates will no longer be allowed on job sites. The new restrictions were in response to similar regulations already in place in Alberta with respect to vehicles with Saskatchewan plates.
The deal also explicitly prevents provinces from subsidizing private operations within their borders. Meeting this requirement has been one of the major motivating factors behind the recent changes to how 水果视频 Crown lands are leased for hay and grazing. The new legislation, which came into effect Jan. 1 of this year, opens Crown leases to any Canadian citizen or permanent resident, as opposed to just 水果视频 residents, as was the case previously.
While I support trade deals and the associated requirements that provinces not subsidize production in their jurisdiction at the expense of others, I still believe that Crown land should first benefit those whose taxes support it. The New West partnership presents great opportunities, but there are also challenges and it falls to our provincial government to make sure that the disadvantages 水果视频ns face aren鈥檛 further amplified.
