Last week, Andrew Scheer gave another in his series of "economic vision" speeches, this time focusing on the state of the Canadian federation. In Scheer's estimation, it's not good because prime minister Justin Trudeau has allegedly been picking fights with the provinces, which is fairly risible if you've bothered to follow the news for the past two years. Scheer promised that as prime minister, he would appoint a minister of interprovincial trade whose sole responsibility would be to negotiate with provinces to get a binding deal like NAFTA, CETA or the TPP, to which my response is to wish him the best of luck. Federal governments have been promising to tackle interprovincial trade barriers since 1867, and some make incremental progress, but that's about it, and if Scheer thinks that it would be different just because he appoints a minister, well, that's the stuff of fantasy.
It's not like governments haven't been aware that reducing these internal trade barriers would be good for the economy. The Bank of Canada has estimated that removing these barriers could add two-tenths of a percent to Canada's potential output annually on par with the economic benefit of CETA. Recently an IMF figure has been floating around that it could add four percent to our GDP, but your mileage may vary. After the original Free Trade Agreement with the Americans, Brian Mulroney was alive to the fact that it was easier to do cross-border trade than it was cross-country, but improvements to the situation under successive ministries has been halting at best.
It's not as though the current government hasn't accomplished a number of things on this file. Building on negotiations between the provinces that began late in the Harper era, the Liberals managed to secure the Canadian Free Trade Agreement, which came into effect on July 1, 2017, and it was a dramatic shift forward in reducing barriers, whose defining feature in terms of regulatory harmonization is a negative list in other words, free trade between provinces is automatic, with a list of exceptions that are enumerated for the first time. What this does is put all of the regulatory and non-regulatory trade irritants out in the open so that provinces can work to reduce them on an ongoing basis because they're right there for everyone to see. This is actually a pretty big deal. Add to that, they put into place a regulatory harmonization body within Treasury Board to carry on that work, and yes, they appointed an internal trade minister Dominic LeBlanc (currently being exercised by Bill Morneau while LeBlanc is undergoing cancer treatment).
The other thing that's important to realize is that there's not much left in the way of low-hanging fruit for Scheer to claim any victories on with this file. While the "free the beer" campaign of alcohol liberalization gets all the headlines, the simple fact is that provinces don't want to give up the revenue from the alcohol sales. There are also huge issues with labour mobility, particularly around things like training standards for skilled trade apprenticeships and the like around the country, and some of those disagreements are in good faith. (It's also why the federal government has little say over accrediting skilled immigrant doctors and engineers, and why Scheer's promise around that is another hollow one).
The other inconvenient fact for Scheer in particular is that Supply Management is one of the biggest trade barriers between provinces you know, the system that he promised to protect and which he says won him the Conservative leadership over Maxime Bernier when the dairy cartel got out the votes for him. There are other agricultural marketing boards that are similarly problematic, but Supply Management is one of the biggest and most visible ones, and he'll either have to dismantle it, or break his promise on interprovincial trade. I wonder which he'll choose.
Add to this the theatre production that is the conservative premiers promising to totally start making internal free trade happen if Scheer forms a government this fall. Brian Pallister in Manitoba went so far as to have civil servants put out a release praising Scheer for his speech a partisan exercise that is a shocking abuse of his authority. Jason Kenney and Scott Moe put on a big show of harmonizing oil rig regulations between their provinces, but if Kenney was at all serious about actually reducing internal trade barriers, then he would immediately announce his support for the national securities regulator, and start the process of Alberta's joining the system as it gets up and running. The fact that this has yet to come up in anything Kenney has promised so far is pretty indicative that this is just for show, much like Doug Ford's declaration that he would welcome an internal trade deal. It bears reminding that if these premiers were serious about ending these barriers, they could do so today without the federal government's involvement. But they won't, because this is all an act for Scheer's benefit.
So what can Scheer do that Brian Mulroney, Jean Chrétien, Paul Martin or Stephen Harper couldn't do? That's the real question, and unless he's proposing that the provinces give up their sovereignty on these issues, or that he plans to buy off them off in some fashion something that will be exceedingly difficult to do given his deficit hawk rhetoric and promise to balance the budget within five years I don't see any reasonable path to success here. The truth is that Scheer's promises here are hollow at best, and snake oil at worst. He's pushing the falsehood that Trudeau has been a failure on this file which is demonstrably untrue as part of his overall narrative that Trudeau has been a failure and "not as advertised" overall. Scheer is lying in the hopes that people will believe a message that he repeats over and over again, like the Conservatives have done time and again, and he's lying by saying that he can succeed where every other prime minister since Confederation has failed, apparently by sheer force of his personality. Don't fall for it.
Photo Credit: Jeff Burney, Loonie Politics
