CFIB urges new deal to create free trade within Canada

The Canadian Federation of Independent Business is pushing for a new deal to reduce internal trade barriers as provincial trade ministers prepare to meet in Toronto to reform the agreement that governs internal movement of goods, services and labour.

The CFIB said 87 per cent of its members agree that provincial premiers should make free trade within Canada a priority. In a survey of about 6,340 small business owners, most answered yes to the question of whether the provinces should commit to dismantling trade barriers within Canada.

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Many respondents to the survey said it was easier to do business with the U.S. than across some provincial borders. And others pointed to the Canada-EU trade deal as a model for cutting red tape.

"WithCanadaand the European Union about to ratify a new comprehensive free trade agreement, it's more important than ever for the provinces to move quickly to remove internal barriers withinCanadathrough the creation of a new trade deal," saidLaura Jones, executive vice-president atCFIB.

"As things stand, there may be instances where European companies have better access to Canadian opportunities than a business in a neighbouring province."

Committed to change

The premiers committed last year to a new internal trade regime by March 2016. The meeting Tuesday in Toronto is an opportunity for trade ministers to talk about revising the Agreement on Internal Trade, which has governed interprovincial trade since 1995.

"If we are to achieve the goal of free trade within Canada, political leadershipby the federal government, and all provincial and territorial governments, is necessary," the CFIB said in a report titledTransforming Trade.

Many respondents to the survey pointed to the complexity of the Workers Compensation legislation across Canada as a huge trade barrier. Small employers are unsure how or whether to register workers who might work outside of their home province for short periods.

Different provincial regimes for professions and trades such as millwright were also a bone of contention.

TheCFIBidentified the cost of shipping as a major problem for many small businesses wanting to trade outside their province and recommended standardized system of permits for transportation as a priority for provincial talks.

Different province, different rules

Other difficulties pointed out by small businesses:

• Different sales tax regimes in each province.
• In order to conduct business across borders, an insurance business must obtain a separate licence in each province and abide by a different set of rules.
• Provincial liquor regulations impose barriers to cross-border trade.
• When you truck a 'wide load' from Alberta into Saskatchewan, you must stop across the border in Saskatchewan, take the sign off which indicates wide load in Alberta and put a new sign on the truck which indicates wide load in Saskatchewan.
• Provincially inspected food items are not allowed to cross provincial boundaries the food must be federally inspected. Small food processors are therefore limited to selling their produce to their province of origin.
• A trucking company must have different permits in different provinces, and at different times of the year.
• Engineering licensing is done at a provincial level and thus requires individuals and firms to apply, renew and pay for each province.

"These are all the sorts of tiny, niggly details that drive business owners crazy. First aid kits, for example. Each province has separate items that are required to be in its first aid kit and therefore, a supplier of first aid kits has to prepare and have a version for every province in the country," said Dan Kelly, CEO of the CFIB.

Most CFIB members agree most of these barriers should be phased out, he said.

"For every one business that's helped by a trade barrier, there are five businesses that are hurt by trade barriers," he said.

He urged the provinces to forget about harmonizing the agreement line by line and just come to an arrangement where they have mutual recognition of each other's rules,

While there's been a lot of focus on international trade, but it's been hard to get change among the provinces, Kelly said.

But the small business lobby grouphailed theNew West Partnership agreementbetween British Columbia, Alberta and Saskatchewan as a good step forward.

The provincial premiers meet July 15 in St. John's.