Continuing CFTA: Developing Canada’s Internal Trade System
Brookelyn Ondusko
In the summer of 2016, 13 of Canada’s Premiers met to discuss a new trade deal on internal trade. Canada’s Free Trade Agreement (dubbed CFTA) was meant to be an update of a 23-year old provincial trade agreement between the provinces and territories. The old agreement is considered outdated, missing coverage of some economic sectors within Canada. Two decades ago, Canada’s first ministers worked out an internal trade agreement and it has since been inadequate at withstanding the judicial and legislative test of time. British Columbia’s Premier Christy Clark is among one of the Premiers who wants to push for a trade-free zone between Canada’s provinces. A bottle of British Columbia’s wine is cheaper to purchase in China then in Ontario, states Clark. Instead of abandoning the agreement, Premiers have embraced the shortcomings and are using CFTA to update Canada’s internal trade; primarily by reducing internal trade barriers.
CFTA’s Predecessors
Going back as far as Canadian history can, the fur trade began the first competitive internal economic race that spanned what we can call mock ‘regional’ borders. Early European-Indigenous relations split up Canada’s implicit regions by way of the valuable resources each contained; separating land for lumber, fishing and the fur trade. (These socially constructed regions will set the framework for
the provincial borders vis-à-vis emerging upon confederation.) As Europeans continued expansion into the west, the fur trade solidified a valuable economic industry that became a staple of early French colonialism. Competition between the French and English to control the industry surrounding the fur trade from the 17th to 18th century is comparatively reminiscent of the resource barriers we see in Canada’s provinces today, albeit much less corporatized.
Moving forward to 1994, the North American Free Trade Agreement was signed by Canada, the U.S., and Mexico. The largest regional trade agreement at the time, NAFTA represents North America’s descent into liberalization of trade and growth of the economic sector by way of inter-regional deals and agreements. The general consensus around NAFTA is a positive one, however some Canadian premiers and politicians would rather see Canada focus on amending the existing internal trade agreements before tackling a regional one. Some Premiers from 2009 under the Harper government were reportedly unsure about re-opening talks for NAFTA. The concern rested on American investment companies buying out Canada’s smaller, less powerful domestic companies with a ‘freeze out’ of the smaller competition. Ontario being most likely to take a significant hit (whether it be positive or negative) from American competition, as most Canada’s population resides in the province.
2013 Stats Canada Provincial Population Distribution [source]
Trade Treaties and the Minority
Emerging reports on the Keystone XL Pipeline and extensive media coverage on protests to the project remind us of the shortcomings of provincial and regional agreements. The contested pipeline brings forward a key player to political regional dialogue for Ottawa; Aboriginals are in a unique position when it comes to land claims and exerting a control over the resources within Canada (and the U.S.). Aboriginal reservations allow autonomy of Aboriginal communities, and are granted with a mix of historical significance and desirable land. If the protests to the pipeline emulate anything, it is that
Aboriginals are a group that the federal government cannot afford to ignore when reconsidering CFTA. (See also: “In the Path of the Pipeline: Aboriginal Rights, and the Northern Gateway Pipeline Review”). A failure to account for opening resources in Aboriginal reserves or traditionally indigenous land is plausible in creating protest as liberalization of trade and reducing regulations of resources for the provinces can transition corporations to step in and lay ownership over resources. Relating to the Keystone XL pipeline, oil sands are an example of an in-demand natural resource placed in a geographically uncomfortable location, which has sparked some Aboriginal protesting (among environmental concerns). As BBC news reports. “[U]nder current proposals it will pass within half a mile of the Standing Rock Sioux reservation and traverse 209 rivers and creeks.” (Source). This is not the first time Aboriginal groups have clashed with the federal government over the use of a regions natural resources. Protests in 1990 against a proposed golf course development that would have been built over Mohawk burial grounds lead to a 78-day standoff known as the Oka Crisis of Quebec.
Revamping CFTA: Implications
Canada’s old internal trade agreement — while not perfect — has created trade barriers that Canada’s Premiers seek to replace with CFTA. Already Canada’s western provinces (British Columbia, Alberta, and Saskatchewan. Not to be confused with ‘the Prairies’) have moved forward with the New West Partnership Trade Agreement. The NWPTA builds up from the Trade, Investment and Labor Mobility Agreement. While the NWPTA will mobilize more beneficial internal trade between the three provinces, there is still significant political mobility to implement the free-trade in all of Canada. CFTA is in part motivated by the recent agreement reached by the Western provinces.
In CTFA, the majority of Canada’s national economy will be covered in the new agreement. One goal that Premiers seek to use CFTA for is to make it easier for local businesses to operate outside of their designated provinces or territories. As well as filling in gaps to the previous trade agreements, there is minor inventive to reduce the legislative red tape in the future. CFTA will cover all goods and services –referred to as a ‘negative list’ mechanism. CFTA aims to reduce current ‘red tape’ in provincial regulations, business relations, and labor mobility.
An example of an odd part of Canada’s trade regulations is in Liquor Laws that regulate and restrict intoxications alcohol from crossing provincial borders. Liquor laws were among the first products that Canada’s founders restricted with legislation; the Importation of Intoxicating Liquors Act has been criticized for its odd restrictions on the mobilization of liquor in Canada. In fairness, the law was implemented in the early 20th century, during Prohibition (and to deter bootleggers). It is with such odd liquor laws that Premiers hold to fix and rectify internal trade in the provinces, thus making Canada’s economic sectors run smoother and rely less on global suppliers. But do not fret: as of July 22, 2016, B.C., Ontario and Quebec have announced plans to make buying their wine easier for Canadians. (So, the next time you purchase wine from B.C. or Quebec, raise a glass to CFTA, and NWPTA.)
