Ottawa, provinces poised for sweeping internal trade deal

Theglobeandmail.com
Jan. 26, 2017
By Bill Curry

Ottawa and the provinces are preparing to announce a sweeping new deal to slash internal trade barriers as soon as the next few weeks that would take effect on July 1, Canada’s 150th anniversary.

Federal and provincial officials confirmed to The Globe and Mail that negotiations have concluded and the final deal is currently being approved by cabinets across the country.

But the agreement is expected to leave some key issues - including rules related to alcohol and some aspects of financial services - to be resolved at a later date.

A framework deal was announced last July but it lacked key details concerning exactly what products and services would fall under the new system of free trade and common regulations.

At the time, governments signalled that the deal would adopt a negative-list approach, meaning that it would apply to all goods and services unless they have been specifically exempted.

The results of those negotiations over exemptions will form the basis of the final deal that will be revealed shortly.

“I’m very confident that we’ll have something to announce very soon,” federal Innovation Minister Navdeep Bains said in an interview. “I would say right now it’s a matter of weeks.”

An internal free-trade deal has been discussed for years, but even the framework required extended negotiations. A March, 2016, deadline set by the previous Conservative government came and went before a deal was announced by the provincial and territorial premiers on July 22 in Whitehorse. Around that time, provinces said the final agreement would be approved in the fall.

Mr. Bains said one factor that is adding a sense of urgency to the issue is the fact that some provisions of the Comprehensive Economic and Trade Agreement (CETA), between Canada and the European Union, could be coming into effect this year.

“There’s a potential if we were to ratify CETA that a European company could have access to procurement here in Canada before a Canadian company does, so that’s a challenge,” he said. He also said the timing of it would be very important as the country celebrates its 150th birthday and demonstrates how strong the federation is.

Ottawa and the provinces have already agreed to carve out specific sectors via a negative list in the CETA agreement. Common features of exemptions in CETA include provisions allowing provincial governments to limit market access in areas such as gambling, forestry, fish processing and energy production.

Brad Duguid, Ontario’s Economic Development Minister and chair of the negotiations on the internal-trade deal, confirmed that negotiations have been completed. He said some provincial cabinets have already approved the final deal and once all the approvals are in, the premiers and Ottawa will decide how and when to announce the deal and make the provisions public.

“For all given purposes, I think consensus was reached some time ago and now we’re just getting the official sign-offs done,” he said. “We’re not expecting any glitches at this stage. You never know until it’s done.”

Mr. Duguid said the talks produced “some progress” on beer and wine sales, but further talks will be needed on that front after the trade deal is announced.

One of the points of conflict that surfaced last year was Alberta’s position that it should be allowed to protect some public procurement from competition from outside the province. An Alberta government spokesperson would only say Wednesday that they look forward to seeing the deal signed.

Saskatchewan Economy Minister Jeremy Harrison said he would have preferred a final deal with fewer protections on procurement. He said several provinces were focused on protecting government contracts, particularly when it comes to large Crown corporations such as energy producers.

“It would be fair to say we would have liked to have seen more ambition on procurement,” he said. “That’s the nature of a negotiation is that on some of these things you don’t always get what is ideal, but I think we’re moving in the right direction.”