In Tough Times, We Can’t Afford Provincial Barriers

(The Globe and Mail – Gordon Gibson)

Section 121 of the BNA Act needs teeth

A reason for the success of our federalism is decentralization of power, from Ottawa to the provinces and from the provinces to towns and the private sector. Indeed, we need more of this. But there is one area where the feds should take a legal sledgehammer to the provinces and do what the Americans call a “cramdown” to free up trade in this country.

Petty impediments to interprovincial trade in terms of local licensing and standards and particularly in provincial and municipal procurement have always been a nuisance. Now they’re a major problem, driven by tough times.

First, the United States is turning more protectionist and inserting “Buy American” requirements into more and more government projects. In some cases, NAFTA offers no defence and, even when it does, the rules take years to enforce. When a town in California instructs a contractor to rip up some piping because the valves were made in Canada, you know you have a problem. But the Americans can reply: “Your provinces do the same thing”

Second, Ottawa is working hard to negotiate a free-trade agreement with the European Union. This would be a good thing on its own merits, with the additional advantage of making us a bit less reliant on America. But there’s a huge stumbling block for the Eurocrats. Since so much of the purchasing in Canada is controlled by the provinces, the EU wants any deal to be enforceable on provincial and municipal procurement as well. This is a deal breaker. Read more here.