Tear down the economic barriers

TheGlobeandMail.com – Opinions – Restrictions turn us from fellows into foes and from citizens into strangers
Published on Tuesday, Jun. 29, 2010.  Robert Knox, Brian Lee Crowley and John Robson

On Canada Day, it is habitual, and proper, to celebrate the values and virtues that make us Canadian and glad to be so. Let’s just make sure we give full credit to the expansive national vision of our founders.

Too often, our governments, for all the First of July words, fall badly short on deeds. Consider the crazy-quilt patchwork of interprovincial trade barriers to our ability to sell milk, drive buses or work as accountants and hairdressers within our home and native land. The barriers cost us money, erode our rights and damage our shared citizenship. And the federal government could make them all go away with one bold move.

What this country needs is a legislated Economic Charter of Rights for Canadians laying out our right to be welcome economically throughout our national home while respecting our constitutional division of powers, backed by an Economic Freedom Commission able to investigate breaches of the charter and litigate over them on behalf of small businesses and individuals who can’t afford to sue provincial authorities with bottomless pockets.

The economic case for action is clear. The horde of petty restrictions on our right to buy, sell and work freely throughout Canada is pointlessly harmful to prosperity. Striking them down would make Canadians richer and increase tax revenues at a critical time in our governments’ fight against a return to chronic deficits.

This motive alone is enough for action. In Australia, similar concerns 15 years ago prompted state governments to ask Canberra to use its constitutional authority to remove internal barriers, with splendid results Canada would do well to copy. But there’s a much more important reason.

When governments trample on our right to move about, make a living and use our talents as we think fit anywhere in Canada, they don’t just make us poorer. They turn us from fellows into foes and from citizens into strangers.

In a magnificent pro-Confederation speech on Feb. 8, 1865, George Brown declared: “The proposal now before us is to throw down all barriers between the provinces – to make a citizen of one, citizen of the whole.” It’s past time Ottawa kept this promise, undoing not just the economic harm of internal protectionism but also its dangerous tendency to exacerbate regional antagonisms.

The current federal government has indicated more than once that it intends to do so. But some people may argue that it cannot, for cultural or even legal reasons.

First comes the claim that unilateral federal action is too brusque and authoritarian, that it’s more “Canadian” to work co-operatively with the provinces. But Canada’s founders knew it was not reasonable to expect provincial governments to bind their own hands against the protectionist temptation. Agonizingly slow progress under the 1994 Agreement on Internal Trade underlines their wisdom. (More recent attempts at regional free-trade blocs within Canada, such as the Western Economic Partnership, contribute to economic and national fragmentation rather than unity.)

The debates over Confederation leave no doubt that its proponents strongly favoured internal free trade, from Ontario to the Atlantic to London, where the Colonial Secretary lamented that “at present … these several provinces … stand to each other almost in the relation of foreign states. Hostile Custom Houses guard the frontiers, and adverse tariffs choke up the channels of intercolonial trade.”

The economic harm was, and is, obvious, which is why in 1867 there was such widespread assent to George Brown’s desire to unite “for purposes of commerce” as much as for “the defence of our common country.” Culturally, there is no argument against bold federal action in defence of internal economic liberty.

As to the legal authority, the Constitution Act, 1867, assigns power over trade and commerce to the federal government in Section 91, while Section 121 insists that it be used to create what Australians call a “seamless internal market.” And Canada’s courts, including the Supreme Court, have consistently upheld federal authority in this area ever since the Citizens Insurance Co. v. Parsons case in 1880.

Of course, the courts have insisted that the federal government may not use this authority to invade legitimate provincial jurisdictions. But, by the same token, provinces are constitutionally forbidden to use their Section 92 powers to enact measures whose main impact is to create unnecessary barriers to our freedom to trade with one another.

Yet, the barriers persist, and the federal government lets them persist despite the harm to our pocketbooks and our sense of shared citizenship. Serious nations do not conduct their affairs this way.

Ottawa clearly has the power to get rid of interprovincial trade barriers, and the moral authority. It just needs to summon the clarity and the courage. That would be something to celebrate next Canada Day.

Robert Knox is the former executive director of the Internal Trade Secretariat; Brian Lee Crowley is the managing director of the Macdonald-Laurier Institute and John Robson is its managing editor. Their paper Citizen of One, Citizen of the Whole is available at www.macdonaldlaurier.ca.

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