Ontario Premier Doug Ford answers questions from reporters as he hosts the Fall meeting of Canada's premiers in Mississauga, Ont., on Dec. 16.Carlos Osorio/Reuters
Canada’s premiers were shocked – shocked! – when U.S. president-elect Donald Trump declared in a social-media post in November that he intends to harm to the Canadian economy by imposing a 25-per-cent tariff on everything exported from this country into his.
Ontario Premier Doug Ford said it felt “like a family member stabbing you right in the heart.” Alberta Premier Danielle Smith said the impact of the tariffs would be “enormous” and “incredibly damaging.” B.C. Premier David Eby offered to do “anything that I can do to support the national effort to protect the families in Canada from the impact of tariffs.” Quebec Premier François Legault said, “25-per-cent tariffs would mean tens of thousands of lost jobs for Quebec and for Canada, so we have to take it very, very seriously.”
On Monday, they gathered at their fall Council of the Federation meeting in Toronto, where they vowed to work together with Ottawa to fight Mr. Trump’s tariffs. Premier Ford followed up by doing a tour of U.S. media, where he said he hopes to meet the incoming president and discuss the issue “businessman to businessman.”
Canadians must have felt all warm inside seeing premiers vow to protect them from an unjustifiable trade barrier – one the premiers pointed out would not only harm their economies but also that of the country imposing the tariffs, by raising prices, killing jobs and slowing productivity in the U.S.
The same Canadians might also have been justifiably confused, because when it comes to interprovincial trade barriers – nakedly protectionist provincial liquor laws, self-serving professional certification rules, random product standards, hyper-local trucking regulations and other red tape that effectively amounts to tariffs – the same premiers are not as eager to seek out a microphone to air their concerns.
The premiers could, if they chose to, remove those barriers and reap an incredible economic windfall for this country. The Bank of Nova Scotia has estimated that reducing trade barriers within Canada could add between 3 per cent and 7 per cent to GDP. Even the low end of that range would be a huge boost: a $90-billion gain, based on GDP estimates in the 2024 federal budget.
But no. In the seven years since the provinces signed the Canadian Free Trade Agreement – an attempt, led by Ottawa, to create free trade between the provinces (what an idea!) – little has been done to make that a reality.
Only when Mr. Trump does it are they quick to say that trading partners that erect harmful barriers are stabbing each other in the heart, and that Canadians need a national effort to protect them from incredibly damaging barriers, because those barriers cost tens of thousands of jobs and need to be taken very, very seriously.
The premiers leave their interprovincial trade barriers intact for the same reason that Mr. Trump is threatening to impose a murderous round of tariffs on Canadian exports to the United States. In a word, politics.
Every provincial regulation has a beneficiary lurking behind it, be it provincial coffers when it comes to liquor laws or industry and trade associations that jealously protect their unearned competitive advantages.
It also doesn’t help that a premier who liberalized trade in their province would be providing an immediate benefit to people in other provinces while potentially imposing short-term hardship on their own voters –something that just won’t do in our jealous little federation.
Ending the interprovincial trade barriers that are harming this country’s prosperity would indeed take political courage. But if there ever was a moment for that, it is now.
The U.S. president-elect is threatening to impose tariffs on everything Canada exports to the United States. Yes, the premiers need to stand up with the federal government as part of the needed Team Canada approach to countering Mr. Trump, or at least to limiting the breadth of the tariffs.
But for the Team Canada effort to stop at the border would be ridiculous. It should continue into Canada with an urgent plan to end interprovincial trade barriers, and not just because doing so might mitigate the economic harm caused by Mr. Trump.
After all, it would be ridiculous to fight so hard to protect Canadians from Mr. Trump’s tariffs, and then say to those same Canadians: Those other trade barriers that are hurting you and which we are ourselves imposing? Oh, those ones aren’t up for discussion.