Mr. Speaker, I want to applaud the passion of the member for Central Okanagan—Similkameen—Nicola. He speaks with a great deal of conviction. I am really glad to see he is bringing forward this very important debate to the House.
I thank the hon. opposition members for both raising this important issue and drawing attention to the work the government is doing to encourage growth, exports, and employment for the middle class.
The motion relates to a priority of all Canadians. I applaud this debate because it speaks to an issue. No matter which political background one represents, no matter where one lives in the country, it really speaks to all of us. It is about strengthening internal trade across Canada.
The hon. member moved that Canada refer a provincial court decision to the Supreme Court for constitutional clarification about the legal framework for allowing the movement of goods across provincial borders.
What the government is proposing instead and what we have been working on since the last election is a comprehensive and collaborative approach to growing our economy and spurring innovation within Canada. We believe that co-operation with all governments is the key to a stronger Canadian economy. That is part of the change that Canadians voted for in the last election.
In fact, just yesterday, I had a very successful meeting with my provincial and territorial counterparts on the need to work more closely together to strengthen innovation for a stronger Canadian economy. It is important to note that this is first time in 12 years such a meeting took place in my portfolio. Just imagine, it is 12 years since we have had a federal-provincial-territorial meeting to talk about innovation and economic development.
We have fundamentally taken the cue from the Prime Minister, who has changed the culture and the tone, and has clearly indicated the importance of coordination and collaboration. This is so important because we have only one taxpayer, and what that taxpayer wants is for us to work together to find solutions to better improve quality of life and create jobs.
Internal trade, of course, including trade in wine, beer, and spirits, is an important part of Canada's economy, accounting for more than 20% of our GDP, so internal trade is absolutely significant for economic success going forward. It represents close to $400 billion of our economy. It is also important to note that 40% of the exports from the provinces remain within Canada, so it is an excellent opportunity for provinces to be able to provide opportunities for jobs and helping companies scale up across the country.
A more open internal economy is a key to the domestic growth of Canadian companies and provides a launching pad for even greater success abroad. That is why the scale-up part is so important. If we provide the opportunity for companies in Canada to be able to transport their goods and services in a manner, from coast to coast to coast that reduces and eliminates barriers, it enables them to grow here so they can become competitive when they go abroad.
Trade barriers make our market smaller, when in fact we want to do this and we want to encourage our companies to grow.
The member opposite mentioned the cost of internal trade. I have heard different numbers. I have heard $3 billion. I have heard up to $49 billion. The member today mentioned over $100 billion, but the bottom line is, there is a cost, and I do agree with that. There is a cost to businesses that ultimately gets transferred to the consumer, and that is a problem.
That is why our government is actively engaged in a comprehensive negotiation with the provinces and territories to renew and modernize the agreement on internal trade, commonly referred to as AIT, in support of a stronger, more innovative economy.
It is not simply about reducing barriers. It is not simply about harmonizing regulations. It is also about creating an environment to drive innovation.
I would like to offer an update on our efforts to strengthen internal trade in close collaboration with the provinces and territories. However, let me point out, as the member opposite mentioned, that strengthening trade within Canada is a long-standing objective.
The original AIT was signed in 1994 under the leadership of Prime Minister Chrétien in partnership with the country's provincial and territorial leaders, and it came into force the following year. The AIT has considerable scope, covering not only the movement of goods, but also trade in certain services and investments, as well as the mobility of workers across Canada, which was part of the discussion earlier as well.
It contains rules that ensure equal treatment for all Canadian persons, goods, services, and investment; that prohibit measures restricting the movement of persons, goods, services, or investments across provincial or territorial boundaries; that ensure government policies and practices do not create obstacles to trade; and that require transparency in government practices.
While the original AIT was an important and necessary initiative, today trade within Canada is not always free and open, and that is why we are having this debate. There are outright barriers and obstacles that are more often subtle, which is something we need to be mindful of, such as a difference in regulations and standards to provide that mentality of protectionism.
This is why we need to work collaboratively with our provincial and territorial partners, both on the obvious barriers that are being discussed today, and also on the subtle rules that impede trade. It is why it is so important that we sit down face to face and have these discussions in a much more comprehensive and meaningful way to be able to engage on all the issues around internal trade.
There have been some partial updates since the original AIT came into force. For example, labour mobility for regulated occupations has been improved, and monetary penalties have been introduced to ensure compliance with dispute resolution panels. Therefore, there has been some progress made.
However, since then, a strong consensus has emerged on the need to comprehensively renew AIT, and this has been discussed for quite some time. Therefore, from the moment that I was sworn in, I have been working hard to build relationships with many of my provincial and territorial counterparts. One of the first things I did was get on the phone to call my provincial and territorial counterparts and engage with them on the importance of growing the economy and looking at the agreement on internal trade to help drive that agenda. My officials, as well, have been working hard with their counterparts to identify and reduce barriers wherever possible.
Again, this is a two-pronged approach: one, at a political level where I am engaging with my counterparts; and, two, the extensive negotiations and discussions we have at the official level. We have been giving this issue the attention it deserves, and rightly so.
I agree with my provincial and territorial counterparts: the agreement on internal trade is an important starting point, but it is outdated. It is 20 years old and needs a major overhaul.
In particular, it is out of step with Canada's international trade agreements. As the member opposite mentioned, the North American Free Trade Agreement helped kick-start the negotiation of the original AIT in the early 1990s. I remember the debate and discussion. It was very clear that if we were going to do trade with the United States, then we had better get our house in order. It was absolutely important that we created opportunities not just abroad but domestically as well. That narrative, the political reality at that time, really helped kick-start the thinking around the AIT.
Today, the negotiated Canada-EU Comprehensive Economic and Trade Agreement sets an even higher ambition that should be considered in our negotiation for a renewed domestic trade framework. This is an important reality. The context has changed, and the times have changed. The federal government worked closely with our provincial and territorial partners to negotiate CETA, and that ambition continues to be part of our discussions as we modernize our domestic trade rules.
We must recognize that we have set a new standard on international trade with these modern trade agreements. Therefore, we have a target internally in Canada to be able to, at minimum, match those modern internal trade agreements to provide equal opportunity for companies within Canada versus those companies from other jurisdictions.
An effective new agreement would also increase transparency and would adopt a structure that would be more consistent with our international approach. That is the absolute key part of this discussion. We want to ensure we set ourselves up for success that is consistent with our international obligations as well. It would include a transparent and systematic approach to working together to align regulations, not only now but in the future.
As our economy continues to evolve, as we deal with new issues, we are putting in process a framework to deal with potential barriers and regulations going forward, as well as how to deal with that. Therefore, not only will we have an ambitious target to ensure we meet national modernized agreements, but we will have a process that prevents any kind of additional challenges and problems going forward.
It would also open up procurement opportunities to suppliers across the country, consistent with the standards negotiated under CETA. This is important. Imagine a scenario where a European company has greater access to Canadian procurement than a Canadian company. That is why there is a sense of urgency to act on this. That is why it is a priority for this government. That is why I have been negotiating so extensively with my provincial and territorial counterparts.
The reason this government is so committed to the successful conclusion of these negotiations is the underlying economic importance of internal trade in Canada. We have been dealing with slow growth over the last decade. It is absolutely essential to deal with the economic challenges we will face in the future and to open up our markets.
According to Statistics Canada, which I have mentioned before and is important to note, $400 billion, or 40% of the economy, is directly and indirectly connected to internal trade. This trade represents more than one-fifth the value of Canada's GDP and is diversified across all sectors. This is not only particular to one region or one sector; this has implications across the country, from coast to coast to coast.
For businesses, it facilitates the growth of Canadian firms, encourages efficiency, and increases the incentive to improve productivity or make investments in new processes or products. In turn, this provides a platform for Canadian companies to scale their operations to compete and expand in both Canadian and international markets. Again, we are really good at starting up companies, one of the best jurisdictions in the world, with 70,000 new companies. However, we have a fundamental challenge of scaling up. That is why this agreement on internal trade would allow us the opportunity to help companies scale up as well.
No doubt there is a benefit for consumers. It would lower costs and increase choice for goods and services. It would also make it easier for Canadian workers, which is very important as well, to take advantage of job opportunities across the country. As we harmonize regulations and reduce and eliminate barriers, it benefits consumers and creates more jobs, very consistent with our economic agenda, which was so well articulated by the Minister of Finance when he presented the budget in March.
Simply put, free and open internal trade is an essential component of Canada's economy and impacts the well-being of all Canadians.
The need for AIT renewal is absolutely clear. As I have indicated to my provincial and territorial counterparts, it will be undertaken by our government on a collaborative basis. We are not going to pit one region against the other or work against them. We are going to work together with a common objective and goal to deal with this issue head on.
This government is committed to a different approach in working with our provincial and territorial partners and we will continue to make true on that commitment. Canadians expect nothing less from us. We have received a mandate to do exactly that, which is work in an open, transparent, and collaborative manner to achieve meaningful results.
I am pleased to say that with every jurisdiction at the table taking part in these discussions, and we have had numerous of them, face to face, all of us together, bilaterally as well, there has been very clear consensus and recognition that having a strong internal Canadian market makes Canadian businesses more productive. All parties agreed that it would give Canada an advantage as our companies sought to sell goods and services in international markets and attract foreign investment.
While we have already made some good progress on this ambitious new agreement, and we have really moved the yardstick forward, I expect that when we are done, we will have a much more open market for our goods and services and investment in Canada. We will have more open government procurement, enhanced opportunities for Canadian businesses, and ensure taxpayers are getting the best value for their money. We will be ready to work together to address the regulatory differences across our country that create additional costs for businesses and consumers.
These are the clear outcomes and goals on which we are working. This is a major effort for all Canadian governments. We are taking the time to do it together, and that is the key part. We do not want any region or jurisdiction left out of the agreement. We want to ensure that everyone understands that we need to work together on this and we need to do it right. It is important that we ensure we get the right outcome.
This is an important and welcome change on how things were done. Obviously, under the previous government, this was not the case. As I said, this is not a partisan issue, but frankly, the previous approach did not work. The Conservatives talked a good game on internal trade. They talked about it in their budget. They talked about it in the Speech from the Throne. They made many declarations. However, unfortunately, they were unable to man a comprehensive agreement on internal trade.
On this side of the House, we want to work with our provincial and territorial partners to reach an agreement the right way. The approach proposed by the member opposite in this motion is unfortunately slightly misguided. It only threatens to undermine the work we are doing with the provincial and territorial partners at the negotiation table.
Imagine this scenario. I am at the table working with my counterparts and then we launch this through the courts. What kind of signal does that send? We are working in good faith.
As most members are aware, the government has taken some tangible steps to address barriers to interprovincial trade of alcohol. In recent years, for example, the Importation of Intoxicating Liquors Act has been amended to remove restrictions on individuals bringing wine, beer, and spirits for personal consumption from one province to another. A number of provinces have put in place a framework to allow consumers to take advantage of this federal liberalization.
In particular, certain provinces have introduced policies aligned for direct-to-consumer shipping of wine. These measures allow wineries from inside and outside the provinces to sell products to consumers without going through their respective liquor authorities.
Manitoba, for example, allows for direct-to-consumer shipping of wine without imposing any specific restrictions. British Columbia allows direct-to-consumer shipping of 100% Canadian VQA wine. Nova Scotia similarly allows for direct-to-consumer shipping 100% of Canadian VQA wine. On a bilateral basis, Saskatchewan and British Columbia have also entered into a memorandum of understanding, allowing for direct-to-consumer shipping of Canadian wine and craft spirits between the two jurisdictions.
It will take more efforts such as these on the part of provinces and territories to take full advantage of these federal liberalizations. We look forward to other provinces and territories following suit.
AIT renewal is a key part of our plan and position to ensure that Canada is not only growing, but is a leader when it comes to innovation. It offers an opportunity for governments to show our commitment to support our innovative Canadian firms and help them expand and prosper.
This is part of our overall objective of growing the economy and creating jobs, and this is a commitment that we made in the budget. We outlined significant commitments to research, science, clusters, and incubators. This process on agreement on internal trade is part of our overall holistic strategy to grow the economy.
It is also an invitation for us to all work together in support of a strong, more prosperous national economy. We cannot afford to miss this opportunity. I remain committed to working with my colleagues across Canada to build a stronger, more innovative economy.