Madam Speaker, it is my honour to rise in this House today and speak to the third reading of Bill C-46, an act to establish the Department of Industry.
Given that this act gives the Minister of Industry powers relating to trade and commerce in Canada, consumer affairs, competition, and restraint of trade, it seems only appropriate to discuss a very major impediment to growth in the economy, the interprovincial trade barriers. This act gives jurisdiction to the industry minister to deal with the very serious situation that exists in trade between our provinces.
When Canada was created out of four British colonies in 1867, the founding Fathers of Confederation had one purpose in mind. They believed that if they united they could resist being pulled into the American sphere of influence and would retain their distinct cultural heritage.
There were two strategies to implement this which they saw as essential to resisting American pressures. The first was a unified military which could better defend the borders of Canada and which did so. The second was free trade between the provinces. It was believed that the free flow of goods and services would strengthen economic, political and cultural ties east to west instead of north to south. It is quite obvious in which strategy we failed to accomplish our objectives.
The fact is that trade in many goods between Canada and the U.S. today is freer and easier than the trade between provinces. For generations we have allowed the inefficiencies of small, protected regional markets in many goods and services to constrict the economy, hurt our political and cultural objectives and cost us jobs.
The United States is a good example of a country where wide open commerce between jurisdictions, negotiated and enforced by a national government has led to greater prosperity for the whole nation.
We are a trading nation and we have spent great energy concentrating on our external trading relationships which account for 25 per cent of our economy. The Americans count on exports for about 8 per cent of their economy yet they are a more prosperous nation. There is certainly a lesson for Canada in this. We must become much more focused on reducing barriers when it comes to domestic trade.
The Minister of Industry and the Prime Minister recently sat down with provincial counterparts to discuss eliminating some barriers. Unfortunately very little was agreed to and the status quo of small, inefficient and protected industries continues to reign.
A renewed effort is needed and if some parties are resistant to the movement the federal government should consider using some of its powers to force agreements into place. As the Prime Minister stated during the first ministers conference, thousands of new jobs will be created and this will benefit all Canadians regardless of region.
There is over $146 billion worth of trade happening between the provinces. There are also over 300 barriers to interprovincial trade in Canada and each one costs jobs, money, growth, and competitiveness. This has hurt the province of Ontario and indeed all Canadians directly. These barriers are a problem that can be solved. Even small improvements in reducing barriers can mean big gains for the country. It is time for us to get serious about dealing with them.
I am going to examine a few examples of barriers that exist to internal trade in Canada and the effect they have on Ontario and the country as a whole. The first barrier that comes to mind is one that has a large effect on employment in my riding.
There is a modern brewery in Simcoe Centre that employs hundreds of Canadians. Over the years this brewery could have employed more people, expanded its operations and become efficient enough to compete with major American brewers. This did not happen because its market has been restricted by trade walls enforced by provinces in an attempt to protect their local brewers. The protectionism that insulated and sustained these inefficient brewers for so long could now be the death of many of them.
International trade pressures are forcing small breweries out of business. Brewing is a $9.6 billion retail industry in Canada so even small reductions in production costs due to greater economies of scale will produce better prices for consumers in a much more competitive economy.
American brewers are gaining more and more access to our domestic beer market through the GATT, NAFTA and the free trade agreement. They will force out those who cannot compete. For example, a single brewery in Colorado Springs, Colorado produces all the beer under a particular label for the entire United States, a market of some 250 million people. How can we expect breweries that produce only enough product for a few million consumers to compete? It is extremely difficult to compete with that economy of scale.
Another barrier that may be less obvious to my constituents but affects them directly is the variation in provincial trucking regulations. Since each province has different size, weight, and licensing requirements there is a lowest common denominator that takes effect in interprovincial trucking. Truckers take a load that is the smaller and lighter of the two provinces' requirements and therefore a more expensive load. This ultimately hurts consumers who will have to pay more for the same products.
I believe that all Canadians wish to see this type of waste done away with and receive the most efficient and economic value possible for their hard-earned wages.
A barrier of major importance that must be dealt with quickly is the barrier each province erects when conducting its own government procurement. The provinces have a long history of purchasing from within their own borders regardless of cost. This raises the cost of purchasing, raising government expenditure and raising taxes. It also costs jobs in other provinces because the most efficient producers cannot sell outside their own provinces.
Some jobs may be protected locally but just like the brewing industry, these local producers are insulated and inefficient. The higher taxes affect all Canadians and cost in total more jobs than protecting the local industry will save. This hurts Ontario as it hurts all Canadians.
The industry minister attempted to achieve a deal on this important subject over the summer but due to the short-sightedness of some provinces, the agreement ended up being window dressing only. It is important that he make it a high priority to get the provinces back to the table and remove these barriers to competitiveness.
Interprovincial barriers to trade and financial services creates once again a higher cost to consumers, costs financial institutions their competitive position and costs Canadians jobs. It also affects another major employer in my riding which finds restrictions on selling its services outside Ontario.
Trust companies for example find barriers to trade in the different regulations that each province sets up. Much like the trucking industry a lowest common denominator approach must be taken to selling services in more than one market thereby increasing costs. A standard set of regulations for all provinces would eliminate administrative overhead, produce more competitiveness, lower costs for consumers and again ultimately create more jobs.
A further barrier to trade is the restriction placed on various types of labour mobility between provinces. This is of particular concern to an area such as Ottawa-Hull which straddles a provincial boundary but still affects people in my riding and indeed all Canadians.
Many of us are familiar with the dispute that erupted earlier this year between Ontario and Quebec on the issue of construction jobs. This was one of many barriers that prevented professionals and labourers from offering their services across Canada. This means competition is reduced and will result in higher costs in taxes for consumers.
Fortunately, Ontario and Quebec managed to resolve their differences on this single issue to the benefit of both. However this is the exception rather than the rule. It is time for us to sit down at the bargaining table and eliminate the many other barriers that are still in place.
It is important to reflect on the statements that have come from this government on the recent GATT agreement. The finance minister estimated that the economy would grow .4 per cent as a result of the implementation of this freer trade agreement. Estimates by the Fraser Institute on the effect of removing interprovincial trade barriers range from 2 to 6 per cent.
In other words, with GATT we spent seven years and millions of tax dollars to negotiate with 120 foreign countries an agreement to open up trading, yet we have an opportunity to realize five to fifteen times the economic benefit by negotiating among only ten provinces. Unfortunately this government has only given a very half-hearted effort to this point.
The bottom line is that interprovincial trade barriers mean lost jobs for Canada, higher taxes and product cost and a less competitive economy with which to face the world.
It is within the substance of this bill and the industry minister's mandate to reduce and eliminate all barriers to interprovincial trade and make Canada as competitive as it can be. The speed with which this minister takes action on this important issue will indicate to Canadians how serious the Liberals are about their promise of jobs, jobs, jobs.
We have an opportunity here that should not be missed. We can improve the economy. We can create jobs here in Canada and indeed hone our edge to be more competitive in the global market we are competing in today.