New domestic trade agreement beginning of mini-agreements

“In no way did they completely liberalize trade” — Red Deer chamber

Red Deer Chamber of Commerce policy and advocacy manager Reg Warkentin

A new free trade agreement between federal, provincial and territorial governments will ultimately have a net benefit and be advantageous, said Reg Warkentin, Red Deer Chamber of Commerce policy and advocacy manager.

But at this point, the Canadian Free Trade Agreement (CFTA) seems more like an agreement to discuss making future mini-agreements on specific issues, he said.

“In no way did they completely liberalize trade and get rid of the myriad of issues that affect business and slow trade down. They just are saying if there is an issue, you guys have to talk to each other, and you have to figure it out.”

The trade agreement was signed last week, and has had mixed reviews. It will come into effect on July 1. It is aimed at providing clear trade rules and resolution processes in the Canadian domestic marketplace. It also will eventually have a single-access web portal for government tenders.

Domestic trade is no small factor in the Canadian economy. According to the provincial government, Alberta exported $63 billion to the rest of Canada in 2015. Overall, internal trade is about 40 per cent of provincial/territorial exports, or $385 billion, which is one-fifth of the country’s annual GDP.

Warkentin said for certain industries it can be be very difficult to do business in other provinces. For example there are certain loads that can only be driven at night in British Columbia, but only during the day in Alberta. “It’s just one example where it doesn’t really make sense.”

The relatively new Alberta small brewers tax credit has been a boon to Central Alberta, and he wonders if the CFTA would have a detrimental affect eventually. The validity or permissibility of that program could be affected. It could result in other provinces pursuing their grievances about the tax credit.

However, overall there will no doubt be a new benefit to Canadians and Central Albertans, as there always are in free trade agreements, he said.

The single-access web portal for all provincial, territorial and federal government tenders may help eliminate biases, and should improve the odds of getting contracts in Saskatchewan, for example.

He thinks that the regulatory councils involved will mean that it will take a long time to resolve issues but “they’ll slowly chip away at the trade barriers and make it better.”

The issue of domestic trade has come up with the chamber in the past, and in a lot of ways it’s easier to do business in the United States and overseas than with other provinces, Warkentin said.

The new agreement replaces an internal trade agreement that has been in force since 1995.

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