Mr. Speaker, this afternoon I will finish the speech I started a couple of weeks ago on Bill C-88, an act to implement an agreement on internal trade.
Just to set the stage, Bill C-88 is like Bill C-85, which is the bill dealing with pension reform. There is a lot more fluff than real substance in this bill. Indeed it is another failure to deal with the serious problems that we have in Canada.
Past federal governments have preoccupied themselves with provincial concerns such as social programs. They have spent time rewriting our Constitution over and over while failing to live by the one already in place. They have stepped on provinces, taken their resource revenues and used them to fund their grant infrastructure projects, but they have not enforced the constitutional provisions which require free trade among provinces.
The federal government has also been and continues to be the instigator or accomplice in a number of interprovincial barriers. Because of various fiscal transfer programs such as regional development and block funding, Ottawa manages to hide the true costs to provincial residents of the barriers their provinces have erected.
If jobs are killed in one province due to barriers, then federal welfare dollars and federal grants to inefficient business help to alleviate the fiscal pain that a province would otherwise suffer. In fact, the more inefficient a province is, the more it is compensated by Ottawa. There is no incentive here for a province to correct its mistakes.
Ottawa also inhibits the free movement of labour. The unemployment insurance scheme the Liberals so cherish has provided incentives for the unemployed to remain in place rather than moving to regions where jobs are more plentiful. This is indisputably borne out by the facts.
For example, our Atlantic provinces continue to suffer from chronic higher unemployment than the rest of the country. This is due in most part to the incentive provided by unemployment insurance for the unemployed to remain in place. The problem is especially severe because in regions that do not fare worse than others, the federal government has increased the benefits available, sinking those who use the benefits further into dependency on the government.
We have been hearing for a long time now about social program reform and the wonderful job our human resources development minister is doing, but we have yet to see meaningful changes to the system that will actually give a hand up to Canadians rather than just a hand out. When this happens, consumers will see more clearly that certain provincial policies have worked to their detriment and that eliminating barriers is in everyone's best interests.
It is long past time for the federal government to take leadership on these issues. This problem is costing the economy billions of dollars and thousands of jobs. Yes, the Liberals were given a mandate to govern using the methods they find most appropriate, but this was based on a series of promised outcomes contained in the red book, most of which have been broken.
The red ink book promised: "A Liberal government will be committed to the elimination of interprovincial trade barriers within Canada and will address this issue urgently". Where is the elimination of trade barriers which was so clearly promised in the election rhetoric? Yes, it looks fairly certain that a few barriers may be reduced with this agreement but as I have already pointed out, new barriers could also arise.
We are a long, long way from barrier elimination. Based on the current pace of progress, we are not going to see this promise fulfilled by the next election. This is the time the Canadian people will have an opportunity to judge these Liberals for their failure to keep their promises. By then the Liberal inaction will have cost billions more dollars and will have prevented thousands of Canadians on the welfare and unemployment lists from finding meaningful employment.
Reformers have the policies and the people to implement a Canada-wide free trade plan. If the Liberals will not do this, then I believe the Canadian people will give Reformers the mandate to do it.
What are the problems I am talking about? Where are the barriers today? Obviously, I am not going to list each of the several hundred, but I would like to mention a few major barriers that must come down quickly.
The first barrier which 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 even become efficient enough to compete with major American brewers. This did not happen because its market has been restricted by trade walls erected by provinces, including Ontario, in an attempt to protect their local brewers.
The protectionism that insulated and sustained these inefficient brewers for so long will now be the death of many of them. International trade pressures are already forcing smaller, inefficient 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 and a more competitive economy.
To their credit, some brewers have taken the initiative and have used our external free trade agreements to their benefit. As a result, it is now easier to find certain New Brunswick brands of beer on store shelves in San Antonio and Los Angeles than it is to find them in Toronto or Montreal. It saddens me that this is the current twisted reality.
Unfortunately, the success story I just described has a downside at least for those breweries that are not ready to compete. American brewers are gaining more and more access to our domestic beer market through GATT, NAFTA and free trade and will force out those who cannot compete.
As an example, a single brewery in Colorado Springs, Colorado produces all the beer under a particular label for the entire United States market, a market of 250 million people. The facility is so large it ships bulk product 3,000 kilometres to Virginia for canning. Then it is distributed up and down the east coast of the United States. How can we expect breweries that produce only enough product for a few hundred thousand consumers to remain in business? It is difficult to compete with that economy of scale.
I believe Canadians wish to see these impediments to freedom done away with and receive the most efficient and economic value possible for their hard earned wages. Beer is such an obvious area of concern for consumers that I was amazed to learn the industry had been exempted from the provincial agreement altogether. We need to focus serious efforts in this area or risk losing thousands more jobs in an increasingly competitive world.
Another 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.
According to the Consumers' Association of Canada some provinces pay up to 10 per cent more for local products, which in turn raises government expenditure and 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 more jobs in total than attempting to protect the local industry they will save.
One writer on economics remarked 200 years ago: "It is the maxim of every prudent master of a family never to attempt to make at home what it will cost him more to make than to buy. The tailor does not attempt to make his own shoes, but buys them from the shoemaker. The shoemaker does not attempt to make his own clothes, but employs a tailor. The farmer attempts to make neither the one nor the other, but employs those who can.
"All of them find it for their interest to employ their whole industry in a way in which they have some advantage over their neighbours, and to purchase with part of its produce, whatever else they have occasion for. What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom".
Adam Smith wrote that in The Wealth of Nations . Yet it would seem that centuries later our brilliant political elite has not yet been able to grasp this simple truth.
The industry minister attempted to achieve a deal on the issue of government procurement but due to the shortsightedness of some provinces their agreement was window dressing only. Crown corporations which do much of the procurement in question are completely exempt from this arrangement. With all the exemptions available elsewhere in the agreement it is unclear if there will be any meaningful improvement in government procurement either.
It is important that we make it a high priority to get the provinces back to the table and to remove these barriers to competitiveness. Interprovincial barriers to trade and financial services create once again a higher cost to consumers, cost financial institutions their competitive position and cost Canadians jobs.
This also affects another major employer of my riding, a trust company which finds restrictions on selling its services outside Ontario. Conversely, trusts from outside Ontario also find difficult and expensive barriers to entry to the Ontario financial markets.
Trust companies find barriers to trade in the different regulations each province sets up. A highest 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,
would produce more competitiveness, would lower costs for consumers and ultimately would create more jobs.
A further barrier to trade is the restriction placed on various types of labour mobility between provinces. This is a particular concern to an area such as Ottawa-Hull which straddles a provincial boundary but it still affects other Canadians in serious ways.
Many of us are familiar with the dispute which erupted last year between Ontario and Quebec on the issue of construction. It was one of many trade barriers which prevented professionals and labourers from offering their services across Canada. It meant that competition was reduced and it resulted in higher costs and taxes for consumers. Fortunately, Ontario and Quebec managed to resolve their differences on this single issue to the benefit of both.
That deal is the exception rather than the rule. It is time for us to dispense with these issues once and for all. 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.
Labour mobility is an area of trade which has been opened up between Canada and the United States under the free trade agreement. Once again as with beer, professionals such as accountants and engineers can more easily ply their trade between Ontario and the American states than they can between Ontario and Quebec. If we are to remain a developed country we must keep on developing our resources, especially our human resources, or risk losing them to more developed countries.
It is important to look at other examples of trade arrangements to determine what is best for us. 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. Barriers were challenged and eliminated in the United States early in the history of the country and it has prospered ever since. The previous example of the Colorado brewery is a good example of the reason that Canadians need the same freedoms.
In Canada 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 only 8 per cent of their economy and yet are a far more prosperous nation. There is certainly a message for Canada in this. We must become more focused on reducing barriers when it comes to domestic trade.
The European Union is a modern day example of a trading relationship which has sprung out of the realization that free trade benefits everyone regardless of language or region. There are some real lessons for Canadians in this. The European Union has not only established free trade in goods, produce and capital, but also has free trade in labour as well. The citizens of any European country now have the right to work in any other European country. Because labour was made more transferable, common certification had to be implemented in a number of areas.
While the system has not achieved perfection yet, it is an improvement in the lives of all citizens. Surely if Europeans of different languages and ethnic backgrounds can achieve such an agreement over the borders of nations, then Canadians must be able to resolve the few differences which exist between provinces.
In present day Canada there is over $146 billion worth of trade between the provinces. There are also at least 500 barriers to interprovincial trade in Canada and each one costs jobs, money, growth and competitiveness which has hurt all Canadians directly. They are forced to pay higher prices for products such as eggs, milk, beer and financial services. They have to pay higher taxes in order that the provincial government can favour inefficient local producers over best value for money producers elsewhere.
These barriers are a problem which can be solved unilaterally in many cases by a determined federal government. 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.
Reformers have written policies on these issues. I will share them with the House.
The Reform Party supports the removal of interprovincial barriers to trade through agreements which include trade dispute settlement mechanisms among the provinces. Should the provinces fail to co-operate in the removal of interprovincial trade barriers, the Reform Party supports constitutional challenges to such impediments wherever possible.
I believe this statement is self-explanatory and I mentioned earlier that Reformers have a plan to deal with trade barriers. It is the constitutional law already set in place to deal with exactly such problems.
Section 121 of the British North America Act states: "All articles of the growth, produce, or manufacture of any one of the provinces shall, from and after the union, be admitted free into each of the other provinces". Also, section 91 of the British North America Act states: "The exclusive legislative authority of the Parliament of Canada extends to the regulation of trade and commerce".
It is obvious from these two sections that interprovincial trade is an exclusive federal jurisdiction and the provinces are violating the intent of the Constitution when they erect barriers to trade. A Reform government would do everything necessary to enforce these constitutional principles.
The industry minister stated, after signing the deal last July, that: "Our governments have achieved this voluntarily, not through arbitrary and contentious attempts to use federal powers or other forms of coercion". This statement underlines the fundamental difference between Liberals and Reformers. Liberals, always anxious never to rock the boat or step on any toes, are happy with tiny steps or even stepping backward if they think they can put a good face on it.
Reformers are much more interested in dealing with reality and solving problems. It is plain to see that the provinces are violating the intent of the Constitution. In the best interest of all Canadians, Reformers wish to see the situation rectified. If this means using some federal power or coercion to see fundamental constitutional law complied with, then so be it.
The Canadian Charter of Rights and Freedoms, also a constitutional appendix, states:
Every citizen or permanent resident of Canada has the right to move to and take up residence in any province and to pursue the gaining of a livelihood in any province.
This right has been successfully used in court challenges to strike down provincial laws that prevent professionals from working in different jurisdictions. Most notable was the case of a New Brunswick accountant who wished to conduct some affairs in P.E.I. Because island law prohibited him from working there, he took P.E.I. to court and won, based on his charter mobility right.
Reformers support the free movement of labour across provincial borders. We believe the government must work quickly to ensure that these goals are achieved.
In analysing the facts, it is all very well and good to say that Canadians have these rights, but what businessman has the time, money and patience to pursue court cases in every jurisdiction just so he can go to work? This has to be recognized as an impediment to the free flow of labour and it is past time for the provinces to remove these impediments. They have significantly added to the cost of doing business and have deterred new business. We benefit our American cousins when we abuse our own citizenry. Many now look south to expand because the walls east and west in Canada are too high to climb over.
Governments, not private citizens, have the responsibility to deal with these issues and to do so urgently, as the industry minister stated.
Reformers find themselves unable to support a bill that lends credibility to the first ministers' failure of last summer. We demand that the federal government enforce the Constitution which contains the necessary authority to allow free trade between the provinces, especially section 121, section 91 and the charter mobility right and to do everything in its power to ensure that all provincial barriers are eliminated.
We also demand that federal programs that compensate for provincial barriers by redistributing wealth and programs that inhibit the free trade of labour be eliminated.
The bottom line is that interprovincial trade barriers mean lost jobs for Canadians, higher taxes and product costs, and a less competitive economy with which to face the world.
As I said at the opening of my remarks, Bill C-88, approving the trade agreement in its present form is a major disappointment for two major reasons. The first is that it fails to give Canadians a golden opportunity to create the thousands of jobs so desperately needed today.
The second and perhaps more important reason is that it is another broken red book promise. This is at a time when all of us here should be doing all we can to restore that lost trust between voters and the politicians. Another lost opportunity, another step backward.
For all the reasons stated, I move:
That the motion be amended by deleting all the words after the word "that" and substituting the following therefor:
That this House declines to give second reading to Bill C-88, an act to implement the agreement on internal trade because it fails to eliminate all interprovincial trade barriers.
