It’s time for free trade inside Canada

I was in a Tokyo liquor store the other day (I don’t have many opportunities to say that) and came across a bottle of Single Malt Canadian Vodka.

The box contained the logo of Ducks Unlimited, showcasing the Canadian industry’s strong environmental record. Kudos to the small distillery in British Columbia that is bringing this value-added product onto world markets.

However, while I can buy this product in Japan, I can’t seem to be able to get it in Winnipeg. Internal barriers to trade make it easier for the B.C. company to export to international markets than ship across provincial boundaries.

It’s time for this to change. Canadians should expect fewer barriers to trade between provinces than we see in trade between nations.

Internal barriers don’t just apply to processed value-added products but also to farm inputs. Different regional regulatory regimes for farm inputs are a barrier to agriculture potential. Instead of diminishing over time, these differences are growing. This can be rectified through amendments to the Agreement on Internal Trade, provided there is political will.

Canada has a science-based regulatory system that is the envy of much of the world. This includes the regulation of crop protection products through the Pest Management Regulatory Agency and the regulation of new seed varieties through the Canadian Food Inspection Agency.

However, this science-based regulatory framework is under threat. There is a growing trend of local environmental and health regulations that are based on the perception of public opinion and not grounded in sound science. Local or regional regulations that are not science-based represent internal barriers that hamper the competitiveness of agriculture from coast to coast.

For example, some provinces have enacted legislation and regulations that limit the use of crop protection products that have been reviewed by the PMRA and approved for use in Canada. The result is a growing patchwork of overlapping federal and provincial regulations that differ from province to province.

This patchwork of regulation puts farmers in some regions of the country at a competitive disadvantage to farmers in other parts of Canada and, just as importantly, puts Canadian farmers at a competitive disadvantage to farmers in other countries, such as the United States.

The most recent example of provincial jurisdictions over-riding the science-based regulatory decisions of the PMRA is the move by the Ontario government to limit the use of neonicotinoid seed treatments.

These regulations will put Ontario farmers at a competitive disadvantage for two reasons:

  • The provincial limitation on the use of neonicotinoid seed treatments will increase the cost of production in Ontario because alternative pest control products are more expensive to apply.
  • The regulations will limit the availability of seed for Ontario producers. This includes new varieties with increased yield potential.

The problems don’t stop at the Ontario border. Regional or local regulations that are not based on science significantly increase the risk of investing in research and development in all of Canada.  A company looking to introduce a new farm input or new seed variety not only has to contend with federal requirements but must also face the risk that its product might be taken off the shelf by local governments.

If we allow this risk to continue to grow, companies will simply take their investment elsewhere, such as to our competitors in the U.S. and Australia.

There is a straightforward concrete solution to the proliferation of regional or local regulations that are not based on sound science: federal and provincial governments must develop a science-based dispute resolution process as part of the Agreement on Internal Trade.

This provision would allow the review of regulations on agricultural inputs and products to ensure that all regulations conform to national standards and fit within Canada’s science-based regulatory framework. This is what we are demanding of our international trading partners and we should expect nothing less at home.

Bringing down the barriers to internal trade will help foster the development of domestic value added initiatives. Reducing internal barriers to investment will ensure that Canada is a top choice for the introduction of new crop varieties and inputs.

The result will be increased choice for consumers and farmers and accelerated growth in agriculture across the country. Free trade within Canada based on regulations that are founded in strong science is something that is long overdue.

Cam Dahl is president of Cereals Canada.

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