Canadians and Americans are holding their breath as they wait to learn if they will have to deal with 25 per cent tariffs on the goods they buy every day.
In response to the threat of tariffs, Canadian premiers have stepped up with their own ideas about how to respond to Donald Trump’s tariff threats, from Danielle Smith’s insistence that a more diplomatic approach is necessary, to Doug Ford’s approach of threatening to cut off various sources of American trade in Ontario.
There has been much talk about a Team Canada approach with regards to tariffs. But how can there even be a Team Canada when the provinces can’t agree to trade freely with one another?
This tariff debacle should be the sobering wake up call to all provincial premiers that international trade partners should not be seen as unwavering allies, and that diversifying trade is essential to maintaining economic prosperity.
One obvious place to start is looking within our own house, and breaking down the trade barriers that preposterously continue to exist between Canadian provinces.
The refrain has long been that eliminating interprovincial trade barriers is an insurmountable task.
Section 121 of the Constitution states “all Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.” This is clear language, and should mean that we are a unified nation — one country, with one market.
However, despite this clear language in the Constitution, trade barriers continue to be high.
Former Canadian Chamber of Commerce president Perrin Beatty has stated there are many different levels of barriers to tackle, including mobility barriers and commercial barriers, some of which have existed since confederation.
According to a recent post on X by former policy advisor to Québec’s Minister of Finance Jean Philippe Fournier, even though the political will existed at a certain point in Quebec (notably, the province that is most closed off to interprovincial trade), the minister was stopped from dropping barriers by the realization that each province was creating regulations in silos without taking into consideration the actions of other provinces.
These rules ended up creating niche interest groups of companies who adapted to these regulations and would lobby the government not to standardize with other provinces so they could stay in business.
And despite text in Section 121 that reads clearly, the Supreme Court of Canada’s restrictive interpretation of it has taken out all its teeth. Section 121 was considered in the Supreme Court case of R. v. Comeau, which involved a man who bought some beer for personal consumption in Quebec and brought it over the border to his home in New Brunswick. He was caught and handed a $300 ticket, and took his case all the way to the Supreme Court with the help of the legal charity the Canadian Constitution Foundation.
While Gerard Comeau had success at the lower court, the Supreme Court found Section 121 does not allow absolute free trade across provinces.
Provinces can adopt laws and regulations that restrict trade if they show the overall aim is for another purpose, like “public health.” This has allowed provinces to impose all kinds of trade restrictions under the guise of some other purpose.
This was an unfortunate result that should be seen as inconsistent with the plain reading of the constitution, but could easily be addressed through political action.
Provinces could choose to enact freer trade, which would unite us as a country during this time of deep economic uncertainty. The political will to tackle interprovincial trade appears to be getting stronger. Conservative Leader Pierre Poilievre recently released a video questioning why it’s easier to trade with other countries than within Canada itself.
Reports also show the federal government and the premiers are finally having conversations about the positive effects of breaking down these barriers.
Team Canada and “Buy Canadian” are not complete until buying Canadian means having free trade to do exactly that within the borders of our own country.
Originally published here