The repeated failure of Ottawa and the provinces to end trade barriers within the country ranks as the most “infuriating and unproductive” roadblocks to economic growth, Canadian Chamber of Commerce president Perrin Beatty says.
“Canadians are not free to sell to other Canadians,” Mr. Beatty complained bluntly, in notes for a speech slated to be delivered in Ottawa on Tuesday. “This is the arrogance of a population that has been able to get away with policies that have been negative to investors, negative to consumers and negative to our work force.”
Dozens of lingering obstacles to internal trade cost the economy an estimated $14-billion a year, according to the chamber as it released its annual list of top 10 barriers to Canadian competitiveness.
Businesses in many rival countries do not bear these same protectionist costs, imposing a penalty on Canadian goods and services in world markets, Mr. Beatty said in an interview. It makes “no sense” that Canada is poised to enter into free trade with Europe, when it remains difficult to do business across provincial lines, he added.
“This the frustration, that in all of this time we haven’t been able to create a single market,” Mr. Beatty said. “What we are doing is balkanizing the country, driving up costs and making it more difficult for companies to compete.”
Fully implementing and upgrading the 1995 Agreement on Internal Trade is a “matter of pressing national urgency,” he said. Among the key problems are provincial standards and certifications that inhibit skilled workers from moving between provinces.
In 2012, Ottawa lifted a long-standing federal ban on interprovincial wine shipments. But dozens of other barriers remain, including the government-sanctioned marketing boards that regulate various agricultural products, such as dairy and poultry.
The chamber’s top concern in 2013, as it was last year, is the skills shortage. Mr. Beatty pointed a finger at the education system, which he said is producing a workers who often lack basic literacy, numeracy and communications skills.
He cited the example of an unidentified tool-and-die manufacturer in Windsor, Ont., where unemployment is high, that is operating at 30-per-cent capacity because it can’t find enough skilled workers.
But Mr. Beatty acknowledged in the interview that businesses must also do better. “Canadian business under-invest in upgrading the skills of the existing work force. That needs to change,” he said.
The chamber identified eight other barriers to competitiveness: restrictions on energy exports, lagging labour productivity, poor infrastructure planning and investment, tax complexity, poor innovation performance, inadequate trade to emerging markets, Canada’s falling tourism market share and lack of access to capital.
In his speech, Mr. Beatty lamented that many so-called “emerging” economies, such as China, now have better and newer infrastructure, better technology and their education systems are rapidly catching up. “They are in a hurry, anxious and prepared to compete,” he said.