Federal agriculture minister Gerry Ritz was grousing last week about interprovincial trade barriers hurting agricultural sales.
“We are all about free and unfettered trade but it is easier to get a piece of (Saskatchewan) steak into Montana than it is to get it from Lloydminster into Alberta,” said the MP for the Saskatchewan side of the border city. “That is how crazy that interprovincial trade stuff is.”
Ritz spoke in the House of Commons Oct. 23 during debate on the Conservative government’s throne speech that promised to reduce interprovincial trade barriers.
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But the same week, the business think-tank C.D. Howe Institute published a report that lamented poor progress in reducing trade barriers between provinces despite a decade-old agreement that committed Ottawa and the provinces to the task.
Kathleen Macmillan, one of the chief authors of the report and president of International Trade Policy Consultants Inc., said agriculture is the chief offender.
The report said these barriers cost consumers and governments money while benefitting only a few farmers who profit from a closed market and little competition.
Canada’s reputation abroad suffers.
“The perception, legitimate or not, that Canada is rife with internal impediments affects the way international investors regard the country,” wrote Macmillan. “Internal trade barriers may be small, but they create a big impression about Canada’s commitment to international competitiveness and multilateral trade liberalization.”
Macmillan and co-author Patrick Grady, president of the research firm Global Economics, wrote that politically sensitive supply management is a core impediment.
“Concern over disrupting the supply management system has made negotiators excessively nervous about addressing almost any agricultural measure since the nexus between supply-managed commodities and regulated food products can be too close for comfort,” they wrote.
“Agriculture officials worry that trade disciplines affecting products such as margarine and dairy blends might undermine their ability to enforce production and import controls in upstream commodities such as fluid milk, poultry and eggs.”
There also is a concern that ending interprovincial trade restrictions for food products containing supply-managed ingredients “might establish precedents that could later be applied to supply-managed sectors.”
They note that many agricultural officials insist change must come at the World Trade Organization level so that they will apply universally and discipline subsidies as well as trade barriers, but WTO progress is slow.
