Provinces' trade deal worth (dry) celebration
It is called the Canadian Free Trade Agreement. But it's not really free. It is a freer trade agreement.
The new interprovincial trade agreement signed Friday by the provinces and federal government certainly opens up trade. But it's not as if the provincial boundaries are being erased trade-wise.
Just look at beer and wine and spirits. Provincial governments are not giving up their monopolies over the sale and distribution of alcohol.
There are onerous barriers to interprovincial trade in booze. How onerous? In 2012, the government of New Brunswick launched a legal fight against a resident who brought 14 cases of beer and three bottles of liquor back across the border from Quebec. (He was legally allowed only 12 pints of beer). The case is still before the courts.
The fact of interprovincial trading-life is you can't bring as much booze back home as you'd like when shopping in the province next door.
That doesn't change under the new free trade deal.
If an Albertan wants to buy a few cases of Ontario wine (legally, that is) they have to do it via Alberta's liquor board, which buys it from the Ontario liquor board. That keeps everyone happy -- and by everyone I mean provincial treasurers.
The Alberta government, for example, collects almost $900 million a year in taxes on alcohol. It's in no hurry to give that up so consumers can join a mail-order wine club from Niagara-on-the-Lake.
You have to give the premiers credit for finally signing the Canadian Free Trade Act after years of false starts and dashed hopes. Interprovincial trade has been a chronic irritant at the premiers' annual conferences.
You might not know it, but it's often easier to trade between Canada and the United States than, say, between Alberta and Quebec. Each province has its own rules, including how to blend gasoline, how to regulate professionals such as dentists, how margarine should be coloured and what size of tires should be used on commercial trucks.
Interprovincial trade is worth about $385 billion a year, which represents about one-fifth of the entire country's gross domestic product. Removing artificial barriers to that trade is expected to add $25 billion to the national economy.
Alberta has been lobbying hard for the free trade deal for the past three years, first under Alison Redford's Progressive Conservative government and now under the NDP.
At last July's premiers' conference in Whitehorse, Premier Rachel Notley pushed for the deal but also dug in her heels over the issue of government procurements, that is, contracts put out for tender by a government covering everything from building a new school to providing computer services.
For years Alberta has allowed companies in all other provinces to bid on government contracts in Alberta. However, Alberta companies weren't free to bid on government jobs in Ontario and Quebec.
Under the new trade agreement (which comes into effect July 1), Alberta companies may bid on government contracts in all other provinces. And if an Ontario or Quebec firm wants to make a pitch on a government job in Alberta, they'll be given bonus bidding points if they hire Alberta workers and subcontractors. Some provinces called it protectionism.
But Notley pushed back, pointing out provinces hard hit by a recession should be able to protect jobs.
Notley was thinking primarily about her government investing $34 billion in infrastructure projects over five years. She wanted much of that money to remain in Alberta.
In the end, she apparently won.
That's worth popping a bottle to celebrate the new trade agreement. Too bad the agreement does nothing to drop the price of that bottle.