Provincial Trade Wars: Why the Blockade Must End

Paul G. Thomas is a professor of political science at the University of
Manitoba and the co-author of Canadian Public Administration:
Problematical Perspectives.

By one not entirely well-documented estimate, internal trade barriers
cost Canadians $6.5 billion annually in terms of lost economic
efficiency. The six chapters in this book examine the impacts of
barriers on a particular industry or broad segment of the economy.

Professors Irvine and Sims explain the high cost of beer in Canada
because it was formerly required that beer had to be brewed in the
province in which it was sold. John Pattison examines the tangled world
of regulation of financial institutions; he seems to favor the
streamlining and consolidation of regulatory responsibility along the
lines of a national securities commission, like that created in
Australia. According to Barry Prentice, efficient trade in agricultural
products is hampered by subsidies, quotas on dairy and poultry products,
and provincial packaging regulations. Tracking regulations used to make
it harder to move freight across Canada than across Europe; Professor
Bonsor explains why recent deregulation steps have not entirely removed
the problem. Morley Gunderson examines the many types of interprovincial
barriers to the free movement of labor among the provinces and assesses
the short and long-term costs involved. The only Quebec contributor,
Jean-Luc Migue, insists that the exercise of national government’s
undoubted constitutional authority to secure the economic union would be
a mistake; not surprisingly, he favors respect for provincial autonomy
and the continued search for harmonization among provincial policies.
Migue’s essay reminds us of the political sensitivity of this issue
because of provincial opposition, from all provinces, to any assertion
of national authority.

In July 1995, after this collection was produced, the 11 provincial
governments signed an Internal Trade Agreement, but the limited scope of
that deal and its weak enforcement provisions confirmed Ottawa’s
reluctance to challenge provincial independence. The deal is a start,
but this book tells us that further reforms will be needed.