Fraser Forum

Ottawa should uphold the Constitution and create a true economic union

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While we have just celebrated the 150th anniversary of Confederation, the Canadian economic union is still nowhere near what was originally envisioned by the founders of the Canadian federation.

Among the objectives of Confederation were establishment of a free trade area with Section 121 of the British North America Acts providing that the produce of each province be admitted freely to the other provinces. The founders were concerned with wealth accumulation and prosperity and saw free trade among the former British North American colonies as an important component of commercial policy.

As noted during the Confederation debates in New Brunswick’s House of Assembly, the purpose of Confederation would be an alliance “that will enable us to have free trade with our neighbours.” George Brown in the Province of Canada argued that Confederation was “to throw down all barriers between the provinces… that our farmers and manufacturers and mechanics shall carry their wares unquestioned into every village.”

And yet, the recent evidence suggests we have a long way to go and the founders must be turning in their graves due to some recent trade shenanigans. Alberta and Saskatchewan recently finished their “licence plate war” with Saskatchewan’s government finally dropping its ban on Alberta licence plates on construction sites.

Then there’s the trade complaint by Saskatchewan-based Great Western Brewing company, which has taken the Alberta government to court over a graduated beer mark-up and rebate program designed to help Alberta’s small brewers.

Beer is at the centre of another dispute involving a New Brunswick man who tried to bring alcohol back from Quebec and was caught by the RCMP who were enforcing a ban on transporting beer across provincial borders. This case has made it all the way to the Supreme Court of Canada and even included a submission from dairy, egg and turkey farmers that allowing “free beer” would result in the destruction of Canada’s supply management system and the livelihoods of Canadian farmers.

And of course, as if Alberta did not have enough brewing on its eastern front when it comes to trade disputes, there’s now British Columbia’s attempt to block more bitumen from crossing into that province from Alberta by rail or pipeline as the B.C. government tries to halt the Trans Mountain pipeline expansion. If Alberta chooses to escalate the dispute with its own ramped up trade barriers, whether it involves putting a toll on B.C. natural gas on its way east or even B.C. wine sold in Alberta stores, the economic damage to consumer welfare will mount.

What’s all the more amusing about all of these interprovincial trade barriers and trade disputes is that Canada’s economic development ministers met in Toronto last spring and released the final text of a new Canada Free Trade Agreement that was supposed to take effect July 1, 2017—150 years after Confederation—to start a process that addresses trade barriers such as food labelling standards that don’t match, barriers to truckers transporting goods across provinces, and barriers to professionals and companies seeking to work across provinces.

Needless to say, the process is not binding, and provinces can opt out of things they do not like. Indeed, there’s no guarantee this process will achieve anything given that the current disputes involving the western provinces come in the wake of their own New West Partnership trade agreement.

If Canada’s federal government wants a role in 21st century nation-building, here it is. It’s time for Ottawa to take the lead on making sure that Section 121 of the Constitution has meaning, to uphold the Constitution and create a true Canadian economic union marked by full economic freedom.



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