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Atlantic provinces constrained by red tape

We have all the evidence we need. It’s time for action to support small business.

How many more studies until government finally takes the necessary steps to fix the drag on our regional economy? There have been many, many reports generated to reinforce that which we already know. We know this, because we’ve written many of them.

From the Canadian Federation of Independent Business’s (CFIB) work on interprovincial trade barriers, to multiple pre-budget submissions, red tape report card, and other position statements, our members have consistently identified regulatory burden and taxation levels as the primary constraints on their business growth.

The latest, compelling piece of proof, comes from the government’s own Joint Office of Regulatory Affairs via Atlantic Provinces Economic Council (APEC). The new APEC project, Trade Barriers in Atlantic Canada: Opportunities for Regulatory Reform, effectively reinforces what CFIB has been repeating for years; red tape and trade barriers are terribly destructive to our economy.

The author, economist David Chaundy, says it’s some of the most significant work he’s ever done. In a career that has seen plenty of economic analysis of our region, that’s saying something. We, at CFIB, were exceptionally pleased to see APEC provide clear quantification of the problem. We believe this report, along with the other work we and other groups have presented, provides more than sufficient evidence to put regulatory reform (red tape) and interprovincial trade barriers squarely on the front burner in Atlantic Canada.

If governments in our region are serious about doing something meaningful to assist economic growth (as they should if we want to avoid plummeting head-first into a demographic abyss), it’s time everybody gets with the program.  

Chaundy’s work identifies how the Atlantic provinces, more than any other region in the country, suffer economically under the weight of unnecessary regulation and interprovincial trade barriers. It points to recent research that estimates the gains from removing all trade barriers in Canada could be as high as 3.3 per cent of gross domestic product ($65 billion). This translates proportionately to even greater gains in the Atlantic region of 7.6 per cent of GDP, or $8.5 billion.

To put it in more relatable terms, this kind of cost reduction is the equivalent of an after-tax income increase of $2,000 for every person in Atlantic Canada.

Lowering interprovincial trade costs for Atlantic businesses will also improve their international competitiveness. With the signing of the Canada and European Union Comprehensive Economic and Trade Agreement (CETA), eliminating regional trade barriers have now become increasingly more urgent and more important. 

Freeing up trade restrictions must become a central ingredient in the economic growth model being prioritized by each of the Atlantic provinces. It’s time for politicians to discard Donald Trump-style parochial protectionism in favour of unfettered interprovincial free trade.

We have enough reports now pointing in the same direction. As we noted at the time of its inception, the Joint Office can play a pivotal role in dismantling these trade barriers, removing red tape and setting our region on a path toward greater economic growth and prosperity.

There have been some good first steps, but each of the provinces now must redouble its efforts to tackle these important issues. With the body of evidence in front of them, the premiers must unify behind and forcefully advance this agenda. 

Jordi Morgan is vice-president Atlantic of the CFIB in Halifax.

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