Sylvain Charlebois is dean of the faculty of management and professor in food distribution and policy at Dalhousie University.
It was interesting to see how a meagre 191-word document signed by all premiers on internal free trade was lauded as a major coup for Confederation. The Canadian Free Trade Agreement (CFTA) was signed recently at the annual premiers' summit in Whitehorse. It may take months before we know what products are included in the deal, and what is not. For years, restrictions among provinces prevented many food products such as dairy, wines and beer from flowing freely across the country. We can certainly celebrate the good will of our provincial leaders, but we should all remain cautiously optimistic.
The intent of the deal signed in Whitehorse is meant to revitalize the ineffective Agreement on Internal Trade that was originally signed in 1994, at the beginning of the Jean Chrétien era. After defeating the Conservatives, who were in power for nine years, the Chrétien government was beginning a new mandate, and there was a sense of rejuvenation within the Confederation. The political atmosphere was different at the time and provincial leaders signed the agreement with confidence. A little more than 22 years later, under a new Liberal government, we are witnessing the second coming of a serious determination to deal with our internal trade quarrels.
In 1994, several events took place soon after the deal was signed that changed the political spectrum. The people around the table changed, and the pleasant sentiment disappeared. Quebec elected a separatist government, and transfer payments were reduced to a point that Ottawa abruptly ended its honeymoon-esque period with the provinces. As the political landscape changed, so did internal economic priorities – and nothing can stop this from happening again. With Brexit, Trumpism and continuing terrorist attacks affecting many countries, the world is a much more complicated place. One can easily see how the CFTA could be forgotten.
The hard truth is that Canada is simply not a trade-focused nation, particularly in agriculture and food. We trade with the world despite ourselves. With our rigid quota-based schemes, tariffs on imports and provincially-based marketing boards and liquor boards, trading food products in our country can be a challenge.
Internal trade strains in Canada speak to a significant constitutional paradox. While our Confederation is certainly complicated to manage, our Constitution is fairly easy to interpret. In fact, our Constitution, which was signed more than 149 years ago in Charlottetown, offers provisions for enhanced internal trades. Yet our forefathers never anticipated provinces to be in contempt of our own Constitution.
In Whitehorse this year, the premiers basically agreed to agree, and nothing more. We may see an agreement in the future or we may not. Exploring options through a consultative process will bring us to where we need to be. However, we should not be surprised that details coming out of working groups will likely become points of contention. Keep in mind that consultations related to this trade deal will be added to the 150 consultations on various issues that are already taking place in Ottawa. To say that Ottawa loves to consult these days would be an understatement.
In recent years, most of our trade-related attention was given to major international trade deals like the Comprehensive Economic and Trade Agreement (CETA) with Europe and the Trans-Pacific Partnership. Years of work were dedicated to the signature and potential ratification of both agreements. Yet due to uncontrollable factors, both agreements now seem uncertain.
Time can be better spent on interprovincial trades where the economic terrain is less choppy. More internal trade is desirable for all regions, all provinces, and a renewed economic focus among provinces is economically indispensable. A deal can provide a better chance for entrepreneurial know-how to shine across the country.
In fact, the CFTA has the potential to create significant wealth in regions. It could even be more economically influential than our current equalization payment scheme that has proven over the years to support fruitless policies.