A long-awaited deal on internal trade made considerable strides on Friday on the topic of Alberta's concerns that it needs to protect its public procurement contracts. The agreement has to be ratified by ministers and the prime minister before it takes effect, as early as next summer.
Ontario Economic Development Minister Brad Duguid, who has led the nearly two-year process to modernize the more than two-decade old Agreement on Internal Trade (AIT), announced that he and his provincial and territorial counterparts had agreed on a number of recommendations to present to the premiers at their annual summer summit in Whitehorse later this month.
The ministers were in Toronto for the day-long meeting.
Some issues have not been completely resolved, however, including the procurement matter involving Alberta. But Mr. Duguid said "significant progress" had been made. This issue will be worked on between now and the premiers' meeting on July 21.
"There are still ongoing discussions taking place in this area," he said. "I am very confident we will find a resolution that will meet the needs of everyone across the country."
A senior Alberta official told The Globe and Mail that the procurement issue is not a deal breaker – and is confident a compromise will be reached.
Meanwhile, Mr. Duguid said the recommendations agreed upon Friday, which form the framework of the new deal, will lead to the "most ambitious free trade agreement, either internally or externally, that Canada has ever pursued."
He said the proposals for a new deal represent a "significant shift toward a more competitive, open economy." A Senate report, released last month, estimated that internal trade barriers cost the Canadian economy between $50-billion and $130-billion annually.
Friday was the final meeting between the ministers; their officials have been involved in 20 rounds of negotiations. The deal is structured differently than the current AIT in that it takes a "negative list" approach. This means that all goods and services are included in this deal unless provinces explicitly ask them to be exempted.
The new deal would bring down barriers to companies doing business in other provinces. It would set up a tribunal or working group to address regulations that vary between jurisdictions and are an impediment to businesses. It would also strengthen the dispute resolution mechanism by increasing monetary penalties.
For the first time, too, alcohol and beer are part of the agreement. However, this does not mean that the beverages will be immediately flowing freely between the provinces. Rather, the ministers have put in place a process to look at liberalizing alcohol and beer. It's not clear how long the process will take.
It will be done in collaboration with the provinces and the federal government rather than going through the courts, said federal Innovation Minister Navdeep Bains, who also attended Friday's meeting.
"We really took a leadership role on this and pushed this issue. … We drove that agenda … Canadians care about it," he said.
Meanwhile, The Globe and Mail reported earlier this week that negotiations for the new deal hit a snag two weeks ago over Alberta's efforts to seek exemptions to ensure that at least 20 per cent of public procurement contracts go to local companies.
The senior Alberta official said that the province is suffering a serious economic shock because of the oil prices, and is looking for economic development tools to create jobs and turn the economy around. The official said that the province did a survey of what other governments do and said, for example, that Ontario in the past has used public sector provisioning to promote economic development.
The official said that Alberta is investing $34-billion in its capital plan over the next five years, and wants to ensure it gets maximum job creation. In addition, much of Fort McMurray needs to be rebuilt after the devastating forest fires. He said one of the first things Albertans asked was whether those jobs would go to Albertans.
Trade agreements, he said, can include transition arrangements to address specific circumstances, such as how long the special arrangement or exemption would last.
The announcement of the proposed deal is good news for Canadian businesses, according to Perrin Beatty, president and CEO of the Canadian Chamber of Commerce.
In a statement, he said that the negative list approach is a "significant difference" to the way Canadians think about and administer trade.
"A negative list will force all provinces and territories to be transparent and accountable for any protectionist choices," he said. "The provinces need to be big in their thinking and bold in their approach – and they succeeded," he said in the statement.