EDITORIAL Interprovincial trade barriers must go

Nations of the world are rapidly forming trade alliances to create larger trading blocks — except Canada where interprovincial trade barriers are still considered an effective means to protect regional interests. In Europe, some of the bitterest rivalries in modern history are being overcome in efforts to create a more prosperous economy. France, England, Germany and other European nations are showing an ability to put aside their long-standing nationalistic goals in favor of creating a larger, stronger economic entity in which all members will benefit.

In Canada, however, provinces are more concerned with their own narrow interests than with the good of the whole nation. Elected officials are keenly aware that their constituency is local, not national. If they are concerned with the welfare of all Canadians, it is tempered with the knowledge that they’ll only be re-elected if they provide local jobs and protect local business.

The result is that everyone suffers. A report this month from the Canadian Manufacturers Association says eliminating interprovincial trade barriers to create a single Canadian market could result in savings to taxpayers and consumers exceeding $6 billion annually. It calls for creation of a single Canadian market by 1993.

While a comprehensive list of interprovincial trade barriers does not exist, the CMA’s research indicates there are more than 500 such barriers, and some are simply unstated policies to refuse the purchase of goods made in other provinces if there are local suppliers regardless of the cost. Some examples cited by the CMA: — The Canadian telecommunications wire and cable industry has four firms which operate, in total, 16 plants. Only five of those plants are economically justified. The other 11, accounting for less than 15% of the required output, were established simply because the companies need a presence in each province to qualify as a supplier. — A major Canadian manufacturer of diesel buses was awarded a large contract to supply municipal buses in the province of Quebec on the condition that production facilities in Ontario be relocated to Quebec. As a result, several hundred jobs were lost in Ontario and the costs of the relocation were passed on to the consumer. — An Edmonton steel fabricator bid on a bridge project in British Columbia. Even though it had the lowest bid, the British Columbia highways branch would not award the project. Instead, the province re-tendered the entire project and in the second tender stipulated that “all the materials and supplies used in and about the construction of the work shall be manufactured in the province of British Columbia.” The tender was then awarded to a British Columbia company.

This kind of counterproductive rivalry between provinces simply cannot continue if Canada expects to compete favorably in future world trade. The Free Trade Agreement was a giant step forward in restructuring our economy to meet the demands of the changing world economy, but its easing of north-south trade barriers has to be accompanied by similar reforms for east-west trade to be effective.

There have been some positive steps taken. The Western Accord and the Atlantic Accord are two examples of provinces attempting to look beyond their boundaries. But a national policy is sadly lacking, and movement toward creating such a national policy is painfully slow.

If Michael Wilson can put this issue high on his list of priorities as new minister for industry, science, technology and international trade, it could go a long way not simply to improving Canadians’ economic position but also to promoting national unity.