:
I'm calling the meeting to order.
Welcome to meeting number 33 of the Standing Committee on International Trade.
Pursuant to Standing Order 108(2) and the motion adopted by the committee on Thursday, February 12, the committee is resuming a study of free trade within Canada.
We have with us today Mark Mancini, professor in the faculty of law at Thompson Rivers University; from the Canadian Chamber of Commerce, Pascal Chan, vice-president, strategic policy and supply chains; and by video conference, for Maple Leaf Foods, Michael McCain.
Welcome to all of you. Thank you for being with us today. This is an important study that we're doing, and we very much appreciate your comments.
We will start with opening remarks of up to five minutes, please.
Mr. Mancini, I will start with you.
:
Thank you, Chair and members of the committee, for having me here.
As you heard, my name is Mark Mancini. I'm a professor of law at Thompson Rivers University in Kamloops, British Columbia.
I'd like to speak to you today about primarily three things. Number one is about constitutional barriers that potentially exist to establishing frictionless free trade across Canada. Number two is existing problems with some of the tools that governments have reached for in light of those barriers. Number three is what the Constitution might permit us to do instead.
I make these comments today based on a report that I co-authored with my colleague, Professor Paul Daly, for the Macdonald-Laurier Institute. Professor Daly will be here to speak to you in the next hour.
Let me start with the constitutional landscape and why it presents somewhat of a problem for frictionless free trade in Canada. The Constitution—wisely, actually—divides economic authority between Parliament and the provinces. Provinces hold broad jurisdiction over property and civil rights in the province, professional regulation and trade.
The result in a federation like ours is an inescapable web of non-tariff barriers: different product standards, different licensing regimes and different certification requirements for important professional jobs. Even well-intentioned regulation of this kind, by its nature, creates constitutional friction. Despite the fact that this is inevitable, these approaches can be duplicative and wasteful.
Parliament's jurisdiction over trade and commerce is broad, but it can't override this constitutional reality. The Supreme Court of Canada has been clear: Federal legislation cannot descend into the day-to-day regulation of goods and professions reserved to the provinces. Also, the court unfortunately has narrowed other interpretive pathways to a frictionless national market, most notably in the “free the beer” decision.
This background explains why existing recent statutory efforts to encourage regulatory harmonization, while positive, are not complete. The Canadian Free Trade Agreement, for example, despite recent positive efforts on that front, is voluntary and, for its benefits, still contains lists of exceptions on goods and labour mobility.
The , recently adopted, represents a major step forward, but of course it can apply only when federal and provincial laws naturally interface. It cannot compel cross-province acceptance of regulations among the provinces.
Moreover, many of these efforts, including those in the provinces, rely on a constitutionally suspect method of breaking regulatory impasses. They depend on so-called Henry VIII clauses, named after that old Tudor king, which permit individual cabinet ministers or the cabinet as a whole to amend primary law. The executive, under this mechanism, purports to exercise a quintessentially legislative act, blurring the lines of accountability. While the Supreme Court has held that these mechanisms are constitutional, they exact a cost in politics, because they distort accountability and they depend on executive action changeable at the stroke of a pen, creating an unstable policy environment for regulated entities.
That brings me to what we do going forward, and that's the subject of our report. There is a constitutionally sound escape valve from all this. The solution we propose in our paper is a joint federal-provincial agency created through matching legislation passed at both levels of government.
This agency would do three things. It would mandate mutual recognition. If a good, service or professional credential is lawful in one province, it would be lawful in all. Second, it would develop national harmonized standards and a means to enforce them through the agency. Third, and maybe most importantly, it would systematically identify barriers and recommend their removal, with provincial ministers acting on those recommendations through tightly constrained and accountable executive powers.
This is not technocracy or bureaucracy for the sake of it. This proposal is designed to coordinate and reduce the duplication of national and provincial regulations. We take the world as it is. We live in a highly regulated economy, and we want to leave space for jurisdictions that choose to simply remove regulations outright, while continuing to coordinate regulatory responses at the national and provincial levels.
With this in mind, our Constitution need not be a counsel of despair. Parliament and the provinces can build a regulatory solution that works within the division of powers and does not depend on inherently unstable executive action. The law here, in other words, is not an obstacle. It can be a solution.
Thank you for your time today. I welcome your questions.
:
Thank you, Madam Chair.
[English]
I'm Pascal Chan, vice-president of strategic policy and supply chains at the Canadian Chamber of Commerce, which is Canada's largest and most active business network. We represent 400 chambers of commerce across the country and more than 200,000 businesses of all sizes—from all sectors and from every part of the country—working to create the conditions for our collective success.
[Translation]
First of all, I'd like to thank the members of the committee for undertaking this important study and for inviting me to participate as a witness. At the Canadian Chamber of Commerce, we're always looking for ways to improve economic growth, productivity and Canada's competitiveness in the global economy.
[English]
On the question of free trade within Canada, I'll start by noting that the toughest obstacles to overcome are not always external or flashy. You'll often hear our president and CEO, Candace Laing, talk about the importance of cultural or mindset shifts. That's because, on matters like this, we can't do the quintessentially Canadian thing and be too polite to openly discuss what is holding us back.
Since the U.S. President's election, it feels as though prospects for our economic prosperity have Canadians questioning whether we should have been more deliberate or proactive when it comes to dreaming big. To that end, a by-product of the trade turmoil we have been experiencing has been an acknowledgement of our complacency when it comes to doing the difficult things that will allow us to grow our economy, both abroad and domestically. For the latter, this means getting our own house in order and generally pursuing one Canadian economy by slashing internal trade barriers.
The rationale for action is clear. Study after study has made the case that these barriers only serve to limit our economic growth. In January of this year, an International Monetary Fund report noted that eliminating all non-geographic policy-related barriers “could raise Canada’s real GDP by roughly 7 percent over the long run”, which would have been a $210-billion boost in 2025. This is well in line with the Government of Canada's assessment of $200 billion, or $5,100 per person.
[Translation]
It's also important to highlight the progress we've seen: The appointment of a minister responsible for interprovincial trade in December 2024, the elimination of federal exemptions in the Canadian Free Trade Agreement, the tabling of Bill , the signing of the Canadian Mutual Recognition Agreement on the Sale of Goods, the approval of the Memorandum of Understanding on Interprovincial Trucking, and ongoing work to address challenges related to various sectors. These are significant measures that have received a lot of support from the business community.
That said, the barriers to interprovincial trade haven't all simply disappeared with the royal assent of Bill C‑5 and the signing of certain agreements. Several barriers still remain within the legislative, regulatory and policy frameworks of provinces and territories, as Professor Mancini has just said. These frameworks were put in place to address similar problems encountered in each province, but they were developed and drafted in very different ways.
[English]
The focus is on the provinces and territories that need to do the hard work of looking inward to remove and streamline their own trade barriers. Last week, the Canadian Chamber of Commerce held its first ever Future of Business Summit in Ottawa, which featured a panel of premiers discussing what they can agree on in the current moment. They all noted that removing barriers to internal trade has to be a top priority. Our hope is that, despite the progress thus far, provinces and territories will stay at the table, working towards meaningful progress.
That said, we can't just politely accept that we've come this far, only to settle for “good enough”. If momentum slows, we hope the federal government would consider applying conditions to major federal transfers to provinces and territories that require the elimination of specific barriers to interprovincial trade and labour mobility, as noted in the 2024 fall economic statement. In a moment when geopolitical uncertainty is high and the stability of our most important trading relationship is not a given, it's critical for our provincial, territorial and federal governments to continue this hard and valuable work in order to get the job done.
[Translation]
I thank you again for inviting me, and I thank you for your efforts at building a more prosperous nation. I will be pleased to answer your questions.
:
Thank you and good morning, Madam Chair and committee members.
My name is Michael McCain. I'm the executive chair of Maple Leaf Foods. It's a pleasure to be with you here today.
I'm here to speak to you very candidly about an issue that threatens the safety of Canada's food system and the well-being of Canadian consumers.
Some parties, in the name of interprovincial trade, are calling for actions that will materially erode Canada's globally recognized federal food safety system through the nationalization of what are essentially subpar provincial food safety regulations.
The pursuit of international trade, I believe, is not the issue here. This is a proper objective on which we can all agree. This is about how we accomplish this objective. It cannot come at the expense of food safety and Canadian lives.
Today, as we speak, Canada boasts a world-class food safety system framework, which is enforced by the Canadian Food Inspection Agency. It is nationally and globally recognized as ensuring that Canada has among the safest food in the world. Today, we have a globally recognized national standard.
Canada's federal food safety system is not a barrier to internal trade. Anyone manufacturing and selling food in this country should be adhering to these federal requirements.
Unfortunately, for way too long, Canada has supported a virtually unknown second-tier food safety system. The second system is a patchwork of substandard provincial and territorial regulations. These regulations all differ. They fall desperately short of modern food safety standards, and I would judge the food produced by these substandard systems as unsafe.
In the name of internal trade, advocates are calling for these subpar systems to be legally deemed as equivalent to Canada's globally recognized food safety framework when they are not. What is worse, this fraud would be perpetrated on consumers, who are not even aware of the risk.
There's only one path to fully unrestricted interprovincial trade for food in Canada. This country should immediately eliminate this unsafe second-tier system of mismatched regulatory and inspection systems and align solely around Canada's world-class federal system.
Madam Chair, I don't speak about these issues lightly. In 2008, Maple Leaf Foods was responsible for a listeriosis crisis that killed 23 Canadians on our watch. Since then, federal food safety regulations, tools and standards have advanced significantly. Provincial and territorial regulations have not.
I speak to you today from a place of personal accountability, rooted in the pain that was attached to this serious food safety breach. The consequences of a substandard food safety network are real and tragic.
I ask you today to heed this warning, and I look forward to your questions.
Thank you.
:
I'd hoped that we'd see it quickly, obviously. The crux of my remarks was that we've made good progress so far, but we can't wait much longer to get the job done.
Obviously, given the comments we just heard from Mr. McCain, I am not suggesting that we erode any sort of food safety regulations. He also proposed a path forward for us to get toward free internal trade on that piece. I just wanted to acknowledge that.
Keeping the provinces at the table, and the solutions that we have put on the table as well, we are saying that the federal government does have levers that it could pull. Professor Mancini also raised a number of solutions we could possibly explore constitutionally.
Maintaining the momentum on this and making sure we get the job done over the course of the next year would be very important. That would be our ambition. That's what the business community would like to see.
:
Well, thank you, Madam Chair.
Thank you to our witnesses.
I'll start where I start, and that is in Mississauga.
Mr. McCain, thank you very much for the jobs that you create in my community of Mississauga East—Cooksville. I know that many of my constituents work for Maple Leaf Foods. They're very proud of the work they do. Thank you for that.
Also knowing, as MP Chambers was just talking about, the exports that Maple Leaf Foods does—I know you export to over 20 countries around the world—I want to ask you about internal barriers—so, barriers that we have, interprovincial barriers—as compared to your export barriers. Can you shed some light on that, on what it's like, selling across Canada and also overseas and to the rest of the world?
:
Yes, I think that the piece about labour mobility comes up a lot. We talk about our productivity challenges, about supply and demand, and about allowing labour to go where they need to be specifically—where there's a need for them, where they're able to work, where there's an opportunity for them. Then, obviously, they become more productive and contribute to the economy. I think the regulatory piece more generally is something that's trying to be addressed through Bill specifically.
Basically, regulations make it hard for SMEs to grow, expand and create Canadian competitive intensity that's going to help productivity. I mean, what we hear from businesses is that, if you're trying to operate across provincial and territorial borders in Canada, it's this complex, ever-changing web that's difficult to navigate. Some businesses will hire additional staff to help them deal with that and work through the cross-border issues, whereas some businesses do their best but are not able to keep up with the different requirements. Others will decide that it's not worth the hassle and will not expand into specific provinces.
Obviously, that's difficult, and if they are looking to sell internationally rather than to other provinces, that creates some of the created tariff effect internally. It's not an actual tariff, but it acts as a tariff in a lot of situations.
:
Thank you, Madam Chair.
I thank all the witnesses for their presentations, which I unfortunately was unable to hear. Nevertheless, I was given a summary of them, and I have no doubt that they were very relevant.
I'll start with you, Mr. Mancini. Your federal‑provincial agency would be binding, but it would respect jurisdictions. I feel like that's to some extent what raises questions today. I imagine, if it were to come to fruition, that it would be important to very precisely outline the boundaries and limits, because constraining jurisdictions while respecting them can end up causing overlap. They're not necessarily two very compatible concepts.
So, how will you ensure that the exclusive jurisdictions of the provinces will be respected? In Quebec, as you know, we have a somewhat distinct model. Furthermore, in my opinion, when we talk about barriers, one of the problems is that it's often unfortunately very hard to define what they really are, especially since free trade already exists.
Tell us more. How do you add substance around the core while respecting exclusive jurisdictions?
One is that, just naturally, over time, provinces have different provincial cultures, and they make different judgments about what requirements their professions need to meet. Over time, those are legitimate judgments.
Charter mobility, however, doesn't have the constitutional teeth to say that we have a right to pick up employment in any province.
:
Thank you, Madam Chair.
I thank the witnesses very much for being with us today. The discussions are very informative.
Mr. Chan, listening to you, Mr. Mancini and other witnesses, I realized that everyone is talking about trade barriers. It's funny, I did a quick search on interprovincial trade barriers. Do you know how many years they've existed? We're talking about nearly 160 years. They've been around a long time. When it was decided, a year ago, to increase domestic trade, some obstacles were to be expected. We're talking about a potential for over $200 billion, but we're also talking about 160 years of history that needs to be reworked.
In your remarks, you said that there has been good progress so far. You said we were on a roll. There have been nine meetings of the ministers responsible for interprovincial trade, which is quite exceptional.
What I understand is that no one is against an agreement aimed at increasing domestic trade. We're at the stage of knowing how to do it, despite the barriers that have existed for a long time, and we have to do it together. When I say “together”, it's without constraints. Do you share my view on this?
Our provincial chambers of commerce have written to the premiers of all the provinces to urge them to move forward with their efforts. That was in February 2025. Obviously, given the situation with the United States, it's becoming very complicated. Now, we want to make progress here at home.
As you said, the barriers have existed for 160 years—I didn't know that—but, as Mr. Mancini also said, the provinces have established their standards over all those years, and they have a reason for doing so: They're protecting themselves.
When comparing the standards of two provinces, and adding in federal standards, we can see that there may be overlap. Why continue that? Why not establish something that's good for both Saskatchewan and Prince Edward Island?
Naturally, there's work to be done. As I said, there were nine meetings last year between the ministers responsible for interprovincial trade. That's progress. The bills and all the other agreements under way are progress. We need to take advantage of this momentum to finalize agreements and complete the work.
:
Thank you, Madam Chair.
Mr. Chan, a 2025 report published by the Centre for Productivity and Prosperity at HEC Montréal, a strong supporter of trade, states that regulatory barriers play a fairly minor role when businesses choose not to participate in interprovincial trade. Their study also indicates that, of the 8.6% who do not participate due to such barriers, less than 1% actually cite regulations as the main reason, and say that the distance is more likely the issue.
First, do you have anything to say about that report that might temper your own conclusions somewhat?
Secondly, is distance a factor that you've explored and examined as well?
:
Gentlemen, I want to ask you about this.
Mr. Chan, I think you mentioned that provincial ministers responsible for interprovincial trade really upped the tempo with respect to meetings. What I want to get at is why there's all the talk and so little result. Is it a question of time and resources? Are we not talking about some of the underlying business realities? Specifically by that, I mean a long-standing network of different provincial regulation.
Businesses react according to the environment that they operate in. Is it going to take more time to dismantle and allow businesses to make adjustments to a harmonized regulatory framework? Is that the real issue, or are we just not spending enough time and effort to harmonize more interprovincial regulation?
I'd be happy to have comments from both of you.
:
Absolutely. Thank you for the question, Mr. McKenzie. I appreciate it.
First of all, the meetings have been important. I do want to give credit where credit is due, especially to the provinces. I mentioned that our provincial chambers had stepped up and written to the premiers saying they wanted to see actions. They saw more meetings. We have seen memorandums of understanding signed between provinces. We saw the signing of the Canadian Mutual Recognition Agreement. All these things are steps in the right direction, and we hope to see more of it.
Yes, obviously the provincial patchwork, as Mr. Lavoie mentioned, is 160 years of trade barriers across provinces. When you layer up these issues to try to protect interests in your own provinces, it's going to take a lot of time to untangle that. I'm very encouraged by the momentum, but again, we have that momentum now and we can't let it slip through our fingers.
Of course, at the Canadian Chamber, we have the business data lab, which looks at real-time business statistics and runs the Canadian survey on business conditions with Stats Canada. With that, we're hoping we'll be able to track it, but in some things, for example Bill , which came into effect just in January, we just don't have the sample size to give you a good answer.
We will be tracking this closely. We hope that maybe by Q3 or Q4 we'll have some real, tangible data to show you that this has or hasn't been working, and if it hasn't, what needs to change.
Mr. McCain, for your information, I sold your products. My father and I had supermarkets, and we sold your products. They were good products. There were never any recalls.
You piqued my curiosity earlier. You mentioned the listeriosis outbreak, and I checked the report earlier. Is the fact that there were slaughterhouses subject to provincial health regulations, but that there are also federal regulations, a factor that explained the listeriosis outbreak?
:
I call the meeting back to order.
We have with us today Paul Daly, university research chair, administrative law and governance, faculty of law, University of Ottawa. From the Canadian Construction Association, we have Rodrigue Gilbert, president. From the Canada West Foundation, we have Charles De Land, vice-president of research, by video conference.
Welcome to you, all.
Mr. Daly, I invite you to make opening remarks of up to five minutes.
:
Thank you, Madam Chair. I also thank the committee members.
[English]
I am Paul Daly, a professor at the University of Ottawa, and I'm appearing in a personal capacity.
I will make a simple claim: Canada is not, in any meaningful sense, a single economic market. This is a problem that we have the tools and, I would say, the responsibility to fix. Across this country, goods, services, workers and capital still encounter barriers at provincial borders. A product lawfully sold in one province may not be sold in another. A qualified professional may not be able to practise across a provincial line without recertification. Firms that can compete globally are often tripped up domestically. These are not marginal frictions. They are structural constraints on productivity, growth and resilience. At a time when Canada faces external economic uncertainty, we are still leaving enormous gains unrealized within our own borders.
The question is not whether internal trade matters. It's how to achieve it. The paper I wrote with Professor Mancini makes a legal point that is sometimes overlooked in public debate: There is no simple unilateral solution. This is not a counsel of despair. It is a clarification of where the opportunity lies. The Constitution allows something more powerful than federal unilateralism, and that is co-operation. Parliament and the provinces acting together can build institutions capable of delivering genuine economic integration through shared administrative bodies, mutual recognition regimes and regulatory harmonization. In other words, the path forward is not federal imposition but rather joint construction.
This brings me to a broader point I want to emphasize this afternoon: This is not a project that belongs to one party, one ideology or one region. Properly understood, it speaks to the deepest commitments of all of them.
For those on the government side, this is a nation-building project. Confederation was meant to be not only a political union but also an economic one. Completing the internal market is, in a very real sense, completing the work of building Canada.
For Conservatives, this is a project of economic liberty. Internal trade barriers are government-imposed restrictions on the ability of Canadians to work, trade and compete. Removing them is not deregulation for its own sake. It is the restoration of freedom within the constitutional order.
For New Democrats and Greens, this is about fairness and opportunity for workers who cannot move, small businesses that cannot scale and consumers who pay higher prices. A more open internal market is not only more efficient but also more equitable.
[Translation]
For the Bloc Québécois, there's a long‑standing tradition based on the principles of support for free trade internationally and within Canada. Ensuring that producers, workers and entrepreneurs in Quebec can access markets across the country on fair terms is entirely consistent with that tradition.
[English]
There is, I think and hope, a genuine possibility of common ground. Our proposal is deliberately pragmatic. We suggest the creation of a joint framework and administrative body empowered within clear limits to require mutual recognition where possible, develop harmonized standards where necessary, and identify and remove unjustified barriers. This would not eliminate provincial autonomy. It would coordinate it and ensure that the exercise of regulatory authority in one province does not unnecessarily impede the economic life of another.
Let me close on this. Parliamentary committees do important work. Much of it, necessarily, is incremental, but from time to time, there are moments when something more ambitious is possible, when structural reform is within reach. Internal economic integration is one of those moments.
If progress is made here, with meaningful steps toward a genuinely open Canadian market, this will be remembered as a significant act of national renewal that strengthened unity, expanded liberty and improved the everyday economic lives of Canadians. That is an opportunity that lies in no small part with you.
Thank you very much.
:
Good afternoon, Madam Chair and members of the committee.
My name is Rodrigue Gilbert. I'm the president of the Canadian Construction Association, representing over 18,000 construction firms from across Canada involved in building and maintaining Canada's institutional, commercial, industrial, civil and multiresidential infrastructure. I'd like to thank you for this opportunity to raise some key issues facing our industry with respect to free trade within Canada.
The industry employs over 1.6 million Canadians and is responsible for nearly $170 billion in economic activity annually, representing 73% of the country's GDP. Construction, as you know, is a highly complex ecosystem of small and medium-sized to large businesses. A typical project brings together dozens of subcontractors that companies must coordinate across jurisdictions, timelines and regulatory frameworks to deliver a single asset.
Many of our members already operate across provincial and territorial boundaries. Projects may take them to major urban centres or remote and northern regions. Either way, firms must routinely mobilize workers, equipment and materials across Canada. This is challenging when productivity is undermined by a patchwork of rules and requirements just to get qualified workers and materials to site.
For construction, internal trade barriers are felt immediately and on every project. They affect whether materials and equipment can move quickly to a job site, whether skilled workers can follow work across provincial borders and whether projects are delivered on time and on budget.
The IMF estimates that fully eliminating internal trade barriers could boost Canada’s real GDP per worker by up to 7%. This is a powerful reminder that internal trade reform is critical to our national prosperity.
[Translation]
We acknowledge the measures recently adopted by the federal government, such as the Free Trade and Labour Mobility in Canada Act, which came into effect on January 1, 2026. We welcome these measures, which improve access to federal public markets and the regulatory recognition of certain goods and services. However, they have little direct effect on the daily reality of the construction sector, particularly in relation to the transportation of equipment, materials and workers from one province to another.
[English]
Canada’s geography makes domestic transportation extremely costly. Shipping within Canada can cost three times more than it would between Canada and the U.S. This highlights the need for a national strategy that goes beyond strengthening our access to international markets. The trade diversification corridors fund is a positive step, but delivering results will require a comprehensive Canada trade infrastructure plan to better integrate our trade gateways and align jurisdictions and transportation networks.
Moving equipment and labour between provinces is also costly and complex. Provinces control highway use permission, requiring separate oversize and overweight permits for commercial vehicles. Truck inspections are also not automatically recognized across jurisdictions, and contractors must repeatedly comply with different inspections, insurance, licensing and safety certifications, even if they meet comparable standards in other provinces.
Construction depends on labour, but the movement of labour is severely restricted. Workers are regulated at the provincial and territorial levels, creating barriers tied to licensing and apprenticeships. Red Seal workers are allowed free mobility, but that covers only 54 trades, and not all provinces participate in the program. Training and apprenticeships also do not transfer easily between jurisdictions.
On top of this, Canada has 14 separate occupational health and safety frameworks, adding another layer of complexity—
:
On top of this, Canada has 14 separate occupational health and safety frameworks, adding another layer of complexity for both workers and employers. Beyond labour and equipment mobility, differences in building codes and standards create additional barriers. Although national model building codes exist, interpretation and acceptance of products varies widely. This fragmentation limits economies of scale, slows innovation and contributes to low productivity growth in construction.
In closing, from our industry's perspective, improvements to internal trade should focus on harmonization and collaboration. This includes reducing barriers to how equipment, workers and materials move across this country, greater alignment and mutual recognition of credentials across provinces, increased consistency in health and safety requirements, and continued work towards harmonized building codes and standards.
Most importantly, if Canada wants to unlock internal trade, boost productivity and deliver housing and major nation-building infrastructure faster, meaningful engagement with the construction industry is essential to developing practical solutions.
Thank you for the opportunity.
:
Thank you, Madam Chair.
Good afternoon. I represent the Canada West Foundation, and we are grateful for the opportunity to speak to this committee.
The Canada West Foundation is a non-partisan think tank whose vision is to advance western Canadian interests by working with governments, industry and partners to build a stronger, more united and prosperous region—one that powers Canada's future.
In this time of disrupted trade relationships and falling productivity, reducing Canada's internal trade barriers is more important than ever, but even without those challenges, Canadian internal free trade should be a national goal. A recent International Monetary Fund report, as you've heard, estimated that Canada could gain over $200 billion, or 7% in GDP, by fully removing barriers. This report estimates that regulation-related barriers impose the equivalent of a 9% tariff on Canadians.
Encouragingly, Canada is taking positive steps. While acknowledging those actions, it is important to remain focused on long-term implementation and expansion toward a fully free system. For example, Canada should speed up its plan to eliminate trade barriers for food and alcohol, and it should do the same for services, with instant recognition of valid credentials for people from other provinces.
We welcome the government's removal of all of its 53 federal exceptions to the Canadian Free Trade Agreement, an action recommended by our past research. We also welcome the Canadian Mutual Recognition Agreement on goods, which critically moves away from a historical system of asking for permission to one of inclusion by default, in which those seeking an exception must put forth strong evidence for why they should be excluded. Inclusion and open markets should be the default.
More can be done. The CMRA excludes food and alcohol. While the memorandum of understanding on direct-to-consumer alcohol sales is supposed to be implemented by May 2026, we recommend bringing alcohol under CMRA for a more robust solution. Under the Safe Food for Canadians Act, interprovincial food trade must meet the same threshold as exports. While this has helped provide regulatory consistency, it has limited the ability of small and medium-sized enterprises to scale up, particularly in western Canada, as they do not have access to provincial markets the size of Ontario and Quebec. Bringing agri-food under the CMRA or a similar mechanism would mean that any product meeting provincial standards could be sold elsewhere in Canada, making food more available to and more affordable for Canadians.
Efficient trade is especially important in supply-managed agricultural sectors, given the high prices Canadians pay as a result. The Canadian government—unfortunately, in our view—appears to remain committed to supply management in dairy and poultry. However, given that a Canadian egg and chicken farmer in the west or elsewhere meets federal safety standards, they should be able to sell their products to their fellow Canadians, no matter where they live.
We support the initiative by the committee on internal trade to expand mutual recognition to services by the end of the year. A Canadian in good standing with their provincial body should be welcomed by any province, expanding employment opportunities and boosting productivity by getting the right person in the right job.
While the momentum is now strong, it needs to be sustained. The Canada West Foundation has previously called for an independent, federally funded internal trade bureau to collect data, update the public on progress and identify and investigate where regulations are more strict than they should be. This bureau would serve as a means to promote internal trade, much like the Competition Bureau does.
Finally, Canadian companies need to be able to effectively move their products and materials to those who wish to buy them, whether it's Saskatchewan farmers selling wheat to industrial bread producers in Ontario or a Nova Scotia tire maker selling to a Belgian driver. This means making smart and strategic investments in trade infrastructure.
Our research has previously recommended bringing the federal government and provinces together to develop a national trade infrastructure plan. Such a strategy could better define Canada's national trade corridors, establish clear criteria for potential projects of national significance and engage the private sector in identifying opportunities for co-operation.
Reducing Canada's internal trade barriers would result in a significant tax cut, boosting Canadian household incomes by thousands of dollars each year.
Thank you for your time. I welcome your questions.
Thanks to all the panellists for being here. I really appreciate it.
Professor Daly, I'll start with you. You teach at the University of Ottawa, my alma mater. I had the honour of teaching there as well, so it's good to see some important local expertise here.
I was looking at your bio, and you have what seems like very extensive experience in common-law-oriented countries—some of them are federations as well. I wanted to engage you in a dialogue on the realities of a federation like Canada.
When you are looking at breaking down barriers, whether it's mutual recognition or harmonization, it very much requires, depending on how the constitution is structured—and ours in particular—a very sophisticated level of coordination and understanding between the federal government and the provinces and territories. In other words, unilaterally, you have very limited capacity and power to do that.
Would you elaborate on that, please?
:
As you can tell from the accent, although I'm Canadian and I live in Ottawa, I didn't grow up here. I grew up in Ireland, in the European Union, and I can still remember—in my lifetime—trading posts, customs, and actual trade and trading barriers within Europe on the island of Ireland and on the continent.
They're all gone. They were systematically dismantled after the Maastricht Treaty and through the Treaty on European Union and various other treaties, because there was significant political will to do it across the European Union, but also because there was an understanding that what you need are legal tools like mutual recognition and regulatory harmonization. These are the things that allow people, services, goods and capital to move across borders.
I spoke to provincial buy-in and provincial participation. In a federation, it's always critical that there's involvement at all levels by all the players, but there does have to be that central power to bind in order for any of this to be effective. Proceeding, as Canada has done heretofore, on the basis of goodwill and free trade agreements that are non-binding will be insufficient.
All that said, in the European Union, for example, one of the core principles of the European Union is subsidiarity. Decision-making authority should be exercised at the lowest possible level, where possible, and that is a principle that would form part of any Canadian equivalent to a European Union approach based on harmonization and mutual recognition. There would still be a role for provinces in contributing to the elaboration of standards and their enforcement.
:
Thank you, that's a very nice transition.
I'm glad to hear the enthusiasm from my colleague across the floor for what I'm going to say on these issues, but the stars are, of course, our witnesses today.
Mr. Daly, it must be noted that you did mention Quebec's history of free‑trade and the independence movement. Separatists like Jacques Parizeau and Bernard Landry were among the first to push for free trade with the United States in the 1980s. Long before it became well‑known, before it became fashionable, it was the great economists of the sovereignist movement who pushed for it. Then, the government of Jacques Parizeau also signed a free‑trade agreement with the rest of Canada. The sovereignty project has always included a partnership or association with the rest of Canada. We don't need any convincing in that respect. We agree. We are in favour, but that doesn't mean under any conditions. There are agreements that won't be as good. When we've opposed free trade agreements, very rarely in history, it wasn't on the principle of free trade itself, but on other contentious aspects. The idea of trade as such therefore poses no problem for us.
The issue is harmonization. We fear that there might be a Trojan horse in there and that it's a forced harmonization.
Behind this idea of an agency that your colleague mentioned in the first hour, there's still the issue of how to balance constraints and respect for skills. This is never easy.
In the case at hand, while we say that it doesn't threaten the autonomy of the provinces, what do we do, for example, if there's an encroachment, a conflict between an economic consideration and a social, cultural or identity consideration? The main issue would be who would do the arbitration. Who would make a decision in that case?
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That would be a question for the agency.
First of all, harmonization or federal action does not necessarily mean denial of, let's say, a province's linguistic interests.
For example, at the CRTC, the Canadian Radio‑television and Telecommunications Commission, there are fairly strong broadcasting policies related to Canadian content and language requirements. I would hope that such a measure could be implemented for any effort at harmonization or mutual recognition in internal trade as well.
It's true that, at some point, someone has to make a decision. However, it's possible to create such an agency and define its powers. There could be reference to social interests or differences, to the distinct character of a province. All that can be included in the legislation to define the agency's work.
That said—and I'm sugarcoating it a bit—it must be acknowledged that, at some point, someone will need to make a decision, the agency will need to make a decision. Even if a province is a party to the agency and takes part in developing a regulation, among other things, there could, at some point, be some tension. That's clear. Everyone should then ask themselves whether the value, the added value of free trade, justifies certain sacrifices. On that, even an independent Quebec would face such choices in its foreign relations with the world.
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Yes, absolutely, it goes without saying. An independent Quebec—like any independent country that negotiates—will sometimes make mistakes and other times succeed. It would be a game of negotiation. That's obvious.
What we want to be sure of is that this is not due to the lack of leverage on the part of Quebec as a province—at least for the time being, and, I hope, for as short a time as possible.
However, in the current situation, if that type of decision were made, would we have a say? You cited the example of the CRTC. You say that it would be possible to include requirements related to content and language, among other things, but it remains centralized at the federal level. This means that, even if there's a concern about a cultural distinction, the province has no independence with respect to that culture.
That's kind of how I understand what you're saying.
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That's true, but we also need to remember something.
I'm Irish. When I go back to Ireland, which has been part of the European Union for about fifty years, I'm in Ireland. I have my own distinct culture. I have Irish customs.
When I'm in France, I'm in France. I'm in a country where there is a strong tradition of protecting its linguistic and cultural identity. These things don't necessarily disappear in an economic union.
If I were a Quebecker, I would draw some comfort from the experience of the European Union in this respect.
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The idea of being in a large market or an economic union isn't a problem, as I was telling you, and you yourself said so in your opening remarks.
As a movement, it's part of our traditions. We are resolutely in favour of it. We also have great admiration for the Irish people. They're an admirable people in every way. I wanted to say that. By the way, the green on the Patriotes flag represents the contribution of the Irish.
However, shouldn't it be made clear—in this case, at an early stage—that there is a certain threshold that should not be encroached upon, and that this should be incorporated into the regulations of any such agency from the outset?
There's a reason why integration with Americans has worked very well for many years. It's a matter of proximity. I'll use steel as an example, but it could be wood, it could be aluminum, it could be just about everything. Transporting steel beams from Ontario to the west can sometimes cost seven, eight or ten times more than if the materials came from the United States, even if western Canada were to pay all the current and return customs fees. Due to the proximity, it's even more expensive.
There's another problem in Canada that's important to mention: The state of our infrastructure for transporting goods in Canada is, at best, in disrepair.
The Canadian government is about to issue its Buy Canadian policy, which industry supports. I think it's important to support our Canadian producers. That said, it should be understood that the current transportation costs and methods are not adequate to serve all of Canada. While the government's investing in infrastructure, there's a cost attached to every project to be built. That must be acknowledged.
:
Thank you, Madam Chair.
I thank the witnesses for taking the time to be here with us. We're very grateful to them.
Mr. Daly, I have the same question as my colleagues: Why create an agency? I'm asking you because, based on what we've heard from the witnesses, there's a desire for harmonization and there are meetings like never before. Moreover, all provinces share the desire to work together, to do it together, without constraint.
Why is it so urgent to have an agency today, so quickly?
Maybe, if it doesn't work after five years, we'll have to start thinking of a plan B, but with what's happening and with how most people feel, what's the urgency? I want to understand.
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With respect to the idea of binding authority, I think the word “binding” is a bit off-putting in business. People want to engage in free trade and, fundamentally, want to get along. So, I have a bit of a hard time with the word “binding,” but thank you for your response.
Mr. Gilbert, what measures would you propose? I'll ask you to be a bit more precise when talking about the short, medium and long terms. I call short-term measures quick wins. It's what we're able to do quickly, without too many limitations or existing measures in the provinces. What could we do quickly? Then, what would the next steps be, in the medium and long terms?
If you try to do it all at the same time, it can take three or four years before anything will get done. Do you recommend a gradual approach instead?
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Yes, I think an easy win would be to harmonize worker accreditation. I think that would be the measure we could implement the fastest. I think there's a will to do it. We can see that: The provincial ministers of employment met a few weeks ago and quickly established standards on it.
The other thing is, I think it will take federal leadership. I'm not sure I'd go as far as creating an agency, but it will take federal leadership to harmonize all the standards, whether in health and safety or in relation to building codes. There are so many building codes that the number changes every day.
There's also everything related to transportation. Transporting materials from one province to another is complicated. I could come talk to you about the trucking industry; it's extremely complicated. I think that's the medium term.
In the longer term, over four or five years, or in another term, I think we'll need to fully harmonize our trade. It's been 160 years, and it should have been resolved 159 years ago. However, that's where we are. I think the Americans have now given us the courage and the opportunity to do it among Canadians. I think it's time to do it.
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In Canada, 54 trades are recognized by the Red Seal program. They get training and are certified in every province. All the people through the Red Seal program are allowed to work anywhere in Canada.
There are two problems. First, it's only 54 trades. As construction is extremely complex, there are more and more trades, subtrades and what they call microcredentials now. People are specialized in certain things that are not represented by Red Seal. You also have to remember that the Red Seal program is not in Quebec at all. Quebec is not part of the program. That creates some barriers for Quebec workers to go somewhere else and for people from anywhere else in Canada to go to Quebec. That's part of the problem.
The other part of the problem with the Red Seal program is that there's absolutely no recognition of all the civil sectors—heavy machinery equipment operators and truckers—and sometimes even journeymen working on projects. They are not represented by Red Seal, so they have no recognition anywhere in Canada.