By Marco Navarro-Genie
and Alex Whalen
Atlantic Institute for Market Studies
Opinions vary as to whether the meeting of Canada’s premiers in mid-July in St. Andrews, N.B., was a success. The expectations for those hoping for freer trade within Canada were high. But if the expectations were high, they were largely created by some of the premiers, including the host, Brian Gallant.
The fairest way to evaluate the success of such meetings is to look at what the leaders intended to accomplish, and by looking at past accomplishments. Let’s look at their stated intentions and their context.
In interviews ahead of the meeting, Gallant emphasized trade and lifting alcohol restrictions. Of the many things on the agenda for the meeting, Gallant’s office put trade right on the title of their press release.
Nova Scotia Premier Stephen McNeil also mentioned the need to reduce internal barriers, “modernizing trade arrangements.” Brian Pallister of Manitoba and Gallant spoke concretely about the movement of beer and alcohol across provincial boundaries, an issue that has had the recent attention of Canadians as a result of the court case of Gerard Comeau.
Comeau is the New Brunswick retiree ensnared and fined for bringing into his home province beer purchased legally in Quebec. Since that case, dubbed the “free the beer case,” many premiers declared their support for removing those barriers. Gallant spoke directly about liberalizing the distribution and sale of alcohol, but stopped short of detailing what he meant by liberalizing.
Liberalization of trade typically means the removal of tariffs and barriers. When speaking about what he expected from the year-old Alcohol Beverages Working Group made up of provincial trade ministers, Gallant mentioned taking down barriers to the movement of alcohol within the country. Let’s not forget that with the right disposition, any free-trade deal can be written on the back of a napkin. You remove all restrictions and parties can trade unencumbered.
Was anything liberalized? What was accomplished?
The premiers issued a vague promise to decrease one restriction on one class of products at some future date. They did nothing to address sales and distribution monopolies, and only addressed border restrictions in a limited fashion. Such negotiations among premiers typically focus on lists of protected exemptions and such a protectionist approach is not liberal.
Barriers to trade have been on the table since before the Charlottetown Conference of 1864. Fast forward to agendas of more recent premiers’ meetings and we first see mention of interprovincial trucking regulation in 1978, while talk of the reduction of barriers first started to appear consistently in 1989.
More recently, the premiers created a handy website where one can find a declaration from 2004 that they were serious about reducing Canada’s internal trade barriers. In a 2014 press release, the premiers said “more can be done,” which culminated two years later in the Canadian Free Trade Agreement, the alcohol working group, and even more vague promises to do something more about something sometime in the future.
Why are four full decades not enough to resolve trucking issues? Given the meagre results, there has been no great commitment to finding effective solutions to provincial monopolies beyond the enchanting recitation of pieties about change.
The pattern is obvious: Meet a couple of times a year. In one meeting you agree to study, at the next you discuss the study and agree to take tiny steps forward. The meetings generate a veritable cottage industry of press releases, communiques, working groups, photo ops, committees and websites. Rinse and repeat yearly, for decades and, well, here we are.
The meeting at St. Andrews was no different.
The premiers this time agreed to take as small a step as possible in the right direction. To be sure, their narrow bit of progress is good: an unspecified increase in the volume of alcohol allowed to cross borders. Yet the size of the solution doesn’t remotely match the magnitude of the problem.
For a public hoping to see real liberalization of internal barriers, the results are disappointing: one small step on alcohol and no leaps at all on liberalization.
The beer still has not been freed.
Marco Navarro-Genie and Alex Whalen are president and operations manager, respectively, at the Atlantic Institute for Market Studies (AIMS.ca).