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Jason Kenney: The time is now for mutual recognition

no1005kenney
no1005kenney

With concern growing about a Canadian recession and with households being hammered by inflation, now is the time to take big steps to cut costs by slashing trade barriers here in Canada.  Domestic trade barriers raise costs and slow growth, and they can be scrapped at no cost to taxpayers. As former Bank of Canada Governor Stephen Poloz said, “That’s free money, lying there on the sidewalk and everybody is refusing to pick it up.”

My home province of Alberta has long seen the benefits of the free internal movement of people and goods. We took the lead by unilaterally dropping 85 per cent of our negotiated exceptions under the Canada Free Trade Agreement (CFTA). At present, more than 300 exceptions are still filed under the agreement. Alberta is responsible for just six — the fewest in Canada — and partly for this reason we have been rated the freest trading province in the country by the Canadian Federation of Independent Business.

We also passed a Labour Mobility Act to speed up recognition of the credentials of professionals moving here from other provinces. The legislation gives regulators a two-week deadline to register new arrivals’ credentials.

To continue momentum on internal trade and mobility, Alberta will build on the Labour Mobility Act to make it even easier for Canadians moving to the province. We will dramatically cut the number of documents they must submit to get their professional licences recognized. In the near future, Canadian professionals who want to work in Alberta will only have to demonstrate that they are licenced in good standing in another province.

If Canada is to become a true economic union, the rest of the country must follow Alberta’s example — and fast. The world may already be in a stagflationary recession and supply chains are struggling with constant disruptions, so we don’t have time for protracted haggling.

That’s why Alberta’s government commissioned a Macdonald-Laurier Institute study to measure the effects of adopting mutual recognition — a system in which goods and services meeting regulations in one Canadian jurisdiction are automatically accepted in others.

The MLI’s findings show that implementing mutual recognition would expand Canada’s economy by 4.4 to 7.9 per cent, adding $100-$200 billion in economic output over the long term. Those are astounding gains, which governments ignore by supporting narrow protectionist interests.

As I wrap up my time as Alberta’s premier, I urge the federal and provincial governments to drop the vast majority of their exceptions under the CFTA and take real action to improve labour mobility. Premiers should override the inertia holding Canada’s economy back by urgently adapting an Australian-style agreement for mutual recognition of each other’s regulations.

Canada’s provinces do have an agreed process for regulatory harmonization, but it moves slower than molasses in January in Fort Vermilion (where in 1911 the temperature hit minus 61C). At a 2017 summit premiers famously spent two hours haggling over how to harmonize first aid kits. With millions of provincial regulations spanning hundreds of industries, it would take decades for Canada to get anywhere close to the regulatory harmonization that exists in the European Union.

That’s why we need to move to a new model. Instead of endless bickering over how to align slightly different provincial rules, we could take Australia’s brilliant, common-sense approach. Australian states simply recognize the validity of each other’s regulations. Rather than spending decades haggling over details, why can’t we just say that what’s safe in one province is safe in another?

Of course, such an agreement could allow legitimate exceptions to be made. But the onus should be on provinces to say why they refuse to accept another province’s rules.

Ottawa also needs to get out of the way. The federal government regulates a lot of interprovincial trade and is often the biggest obstacle to internal trade and red tape reduction. For example, Saskatchewan and Alberta signed an agreement in 2019 to align rules around the movement of oil and gas service rigs. But these rigs often move between the two provinces and Ottawa regulates interprovincial transportation. It took the federal transportation department two years to give its approval to this common-sense provincial agreement.

Western provinces also want to sell provincially inspected meat to other Canadians. But Ottawa blocks those sales unless the meat passes through much bigger and more expensive federally regulated meat plants. That means a ham sandwich made on the Alberta side of the street in Lloydminster can’t be legally sold across the street in Saskatchewan.

Let’s dispose of pointless and painful protectionism, help families cope with the costs of inflation, create jobs and add tens of billions of dollars in value to Canada’s economy. The need is urgent, the solution is clear and the power is in our hands.

Jason Kenney is premier of Alberta.