GDP could grow by $70B if Quebec removes trade barriers: report

OTTAWA – The Quebec government could boost the Canadian economy by approximately $69.9 billion if it removes trade barriers with the rest of the country, a think tank in the province estimates. According to a new study by the Montreal Economic Institute (MEI), the signing of an agreement between Quebec and Ontario alone would increase Canada’s GDP by approximately $32.2 billion. “Premier François Legault should follow Nova Scotia Premier Tim Houston’s approach and adopt mutual recognition laws with the rest of the country,” said Trevor Tombe, a professor of economics at the University of Calgary and senior fellow at the MEI. Nova Scotia legislature recently adopted the Free Trade and Mobility Within Canada Act, or Bill 36, that will ease interprovincial commerce with provinces that reciprocate. The province will accept, without testing or additional fees, any product approved for use in the other province, even if it does not meet local standards. The law also applies to licensed services and professionals. Ontario, New Brunswick and Prince Edward Island have also joined the party, with measures to reciprocate Nova Scotia and increase trade. “It’s one of the surest and lowest-cost ways for provincial governments to unleash Canadian productivity growth,” said Tombe. So far, all these measures are leading the way to internal free trade zones with the potential to boost the country’s economy substantially, according to MEI. For example, Ontario and Nova Scotia alone could boost the Canadian economy by nearly $4.1 billion. However, all eyes are on Quebec’s next move because of its numerous regulations. The office of Quebec’s Minister Delegate for the Economy Christopher Skeete told National Post that the government intends on introducing a bill “very soon.” “We should welcome the provinces’ willingness to reduce interprovincial trade barriers. Quebec is working on its own, and we welcome the bills from other provinces,” said the minister’s spokesperson Léa Fortin in a text message. In the past, Skeete has said that Quebec “is ambitiously committed to improving the local business environment.” But when it comes to reciprocal measures with Nova Scotia and other provinces, it’s not clear if the province is ready to make that step. In fact, Quebec’s members of the National Assembly (MNA) don’t seem too excited with the notion of “one Canadian economy instead of 13” proposed by Prime Minister Mark Carney. In April, a motion opposing such project was adopted unanimously by the parties at the National Assembly. The motion reaffirmed Quebec’s right “to protect its own interests, particularly economic, cultural, and linguistic, based on its distinct priorities and social values, while working to reduce barriers to interprovincial trade.” The prime minister’s Quebec lieutenant Steven Guilbeault was present during the first meeting between Carney and Premier François Legault and said Wednesday that during that conversation, both sides “were on the same wavelength, in that the more we are able to remove barriers like that, the more beneficial it will be for trade in Quebec and Canada.” The study by MEI comes as Internal trade Minister Chrystia Freeland is set to meet with her provincial counterparts on Thursday and Monday. Minister Skeete will attend the meetings and is said to be ready to present new measures on internal trade Friday. Quebec is participating in negotiations to conclude a mutual recognition agreement applicable to all consumer goods, except for food, beverages and tobacco. The province has already announced that the Société des alcools du Québec (the province’s liquor board) will provide greater visibility to Canadian and Quebec products and is also committed to improving trade through a direct-to-consumer sales system. Quebec also dropped five exceptions under the Canadian Free Trade Agreement and is looking to do more. “Minister Freeland is encouraged by the great progress provinces have made, with many reaching agreements and introducing legislation, so that residents, businesses, and workers in these provinces will have better access to goods, services, and a larger market,” said Laura Scaffidi who is the minister’s spokesperson. Tombe believes that “the growing momentum to eliminate internal barriers to trade in Canada is promising,” but Quebec and the country would be “much more prosperous” if the province were to join the interprovincial free trade zone. National Post atrepanier@postmedia.com Get more deep-dive National Post political coverage and analysis in your inbox with the Political Hack newsletter, where Ottawa bureau chief Stuart Thomson and political analyst Tasha Kheiriddin get at what’s really going on behind the scenes on Parliament Hill every Wednesday and Friday, exclusively for subscribers Sign up here. Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark nationalpost.com and sign up for our newsletters here.