The Trump administrationSA国际影视传媒檚 on-again, off-again threat to impose damaging tariffs has boosted an old idea for driving economic growth in Canada: eliminating interprovincial trade barriers.

SA国际影视传媒淭here are millions of different ways in which rules and regulations and standards and so on affect decisions that add up to a lot, at the end of the day,SA国际影视传媒� said University of Calgary economics professor Trevor Tombe.

HereSA国际影视传媒檚 a look at how interprovincial trade barriers work and why years of efforts to tear them down them have largely failed.

WhatSA国际影视传媒檚 an interprovincial trade barrier?

Tombe said this term applies mostly to regulatory burdens that frustrate efforts to buy, sell or otherwise do business across provincial lines. They generally donSA国际影视传媒檛 involve quotas or tariffs.

SA国际影视传媒淚t should just be thought of as differences in the rules and regulations and standards and so on that exist from one province to the next,SA国际影视传媒� he said. SA国际影视传媒淣avigating those different rules adds costs, and therefore detracts from internal trade.SA国际影视传媒�

Tombe said the provinces have a combined total of about 600 professional credentialing bodies that regulate goods and services within their borders SA国际影视传媒� so these barriers exist in virtually every industry.

Health and safety rules that vary by jurisdiction can throw up barriers to interprovincial trade. They include provincial regulations that require a commercial vehicle to get a second inspection after crossing the border between British Columbia and Alberta.

They can also include federal regulations, such as those that require federal inspections of agricultural products when they cross a provincial border SA国际影视传媒� even if the product was inspected provincially when it was produced.

Provincial regulations that categorize products for tax purposes SA国际影视传媒� regulations that determine which ingredients a beverage must contain to be sold as SA国际影视传媒渧odka,SA国际影视传媒� for example SA国际影视传媒� also make it harder to sell products across provincial borders.

But Tombe said the modest level of alcohol trade across provincial borders relates less to regulations and more to the fact that most provincial governments purchase their own supplies for provincial liquor agencies.

Experts have been lamenting the low level of interprovincial trade in Canada for decades. Tombe pointed out that the problem was flagged in the 1940 report of the Royal Commission on Dominion-Provincial Relations.

Why do these barriers exist?

Tombe said theySA国际影视传媒檙e largely the product of political inertia.

SA国际影视传媒淭here arenSA国际影视传媒檛 nefarious motives on the part of provincial governments,SA国际影视传媒� he said. SA国际影视传媒淚tSA国际影视传媒檚 just that naturally, when you set your rules, youSA国际影视传媒檒l arrive at potentially slightly different rules.SA国际影视传媒�

He said that provinces have many priorities to focus on, such as schools and hospitals, and harmonizing regulations with their neighbours is SA国际影视传媒渞eally difficult.SA国际影视传媒�

Sean Speer, a public policy analyst and senior fellow at the University of TorontoSA国际影视传媒檚 Munk School of Global Affairs, has suggested governments should use artificial intelligence to SA国际影视传媒渃reate an apples-to-apples comparison across the provincesSA国际影视传媒� for various regulations, and propose ways to harmonize rules.

SA国际影视传媒淎 major obstacle to eliminating interprovincial trade barriers is actually identifying them,SA国际影视传媒� he wrote on the platform X last month.

WhatSA国际影视传媒檚 the economic impact?

In a report Tombe co-wrote for the Macdonald-Laurier Institute in 2022, he estimated that eliminating interprovincial barriers could boost CanadaSA国际影视传媒檚 gross domestic product by between 4.4 and 7.9 per cent over the long term. He pointed out that result would require the elimination of all barriers and probably wouldnSA国际影视传媒檛 be apparent for several years.

At the time it was published, TombeSA国际影视传媒檚 paper estimated that opening up interprovincial trade could increase the size of the national economy by $200 billion. He said that increase in value would reach about $245 billion today SA国际影视传媒� meaning thousands of dollars per person.

Tombe said that Statistics Canada data on exports and imports by province suggests that just one-third of Canadian trade by GDP is interprovincial, with the rest of it moving on to other countries.

He said that illustrates how itSA国际影视传媒檚 often easier for businesses to trade goods with foreign countries than across provincial lines.

What has the Trudeau government done to fix this?

Ottawa brought the provinces together to sign the Canadian Free Trade Agreement in 2017, which has led to some provincial and federal rules being softened or repealed to make them more uniform.

Some economists have criticized the agreement for retaining hundreds of exceptions to rules meant to ensure barrier-free trade.

SA国际影视传媒淒espite some partial efforts to reduce barriers in the past, provinces have been reluctant to pursue further measures,SA国际影视传媒� Scotiabank economist Jean-Fran莽ois Perrault wrote in a March 2022 analysis.

Tombe said the 2017 pact is SA国际影视传媒渞eally meaningfulSA国际影视传媒� in that it created an institutional process for provinces to identify irritants and harmonize regulations. But the process itself is slow, he said.

He added that Ottawa has limited control over how provinces regulate within their jurisdiction.

The federal government has convened meetings and has launched surveys and databases meant to identify barriers and ways they can be removed.

Ottawa also has published a building code that provinces can choose to adopt to harmonize the construction sector. The federal government also standardized electronic hours-tracking for commercial drivers and consolidated 14 food safety regulations into a single set of rules.

What would the Conservatives do?

Conservative Leader Pierre Poilievre has said heSA国际影视传媒檇 prioritize tackling a patchwork of trucking regulations, arguing it should be the easiest way to get more Canadian goods moving across provincial borders.

He also has said he would remit tax revenue to provinces that scrap regulations preventing interprovincial trade, and use the added federal tax collected from the resulting increase in commerce.

That idea stems from ScotiabankSA国际影视传媒檚 2022 analysis, which argued such a move could eventually generate $15 billion in federal revenues.

Poilievre also said he would standardize certifications for medical personnel SA国际影视传媒� thoughpast governments that have attempted to do so have faced pushback from regulators and unions.

Would resolving these barriers insulate Canadians from tariffs?

Tombe said scrapping barriers would boost productivity and unlock economic growth SA国际影视传媒� but even swift action would take years to deliver real gains.

SA国际影视传媒淭hereSA国际影视传媒檚 no avoiding a recession, if indeed the U.S follows through with permanent 25 per cent tariffs on Canada,SA国际影视传媒� he said. SA国际影视传媒淏ut over time, we could potentially more than compensate.SA国际影视传媒�