Inter-provincial free trade

What happens when you make it harder to trade in one area and easier to trade in another? The latter is bound to become bigger than the former, which is bound to become smaller in proportion than it used to be.
Neil Reynolds failed to address this in his article. I don’t understand what he means when he says the provinces have a constitutional right to keep provincial barriers forever. They don’t. That’s the overwhelming legal opinion. If a federal government would try to get rid of them, they’d be gone. The trade and commerce powers are federal.
I like Neil Reynolds and I think he’s great and he writes excellent things. I think when we’re trying to compete internationally; it is unreasonable and unnecessary for us to make it harder for us to trade with each other. We’re only 30 million people in a world where there are markets of hundreds of millions in each region, let alone all over the world. There will be even more people as China and India develop a larger middle or consumer class. We simply cannot afford the shackles of the 19th century in the 21st century, anymore than we could afford them in the 20th.
As for waiting for our own sweet time in the rapidly deteriorating economic situation in the United States, waiting even a year could be hurtful and harmful to our long-term performance as a competitor around the world. We simply cannot wait. It’s been long enough. We’ve waited 130 years to have a rational trade system in this country and it is time to bring in full faith and credit all the way.
There seems to be a bit of free trade history revisionism that Mr. Reynolds cites in that the reason we don’t have it now is because we didn’t need it. We opened up to foreign trade because it was essential. I don’t know.
The first effort to bring in a reciprocity treaty with the United States was in 1910 and the long-standing powerful, popular Laurier government fell the very next year as a result of trying to bring it in. No government seriously attempted it again, except for the Auto Pact in the 1960’s, until about 1985 and it wasn’t passed until 1989 and not fully implemented until 1999, some 130 years after Confederation.
The history of opening up trade is that it has not happened unless there has been a strong political will and initiative to bring it about and as we see, free trade efforts and projects are under assault all over the world right now from a newly retrenched protectionist element, not only in the usual places of Asia and Europe, but even in the United States. In this environment, we need to make ourselves as large as possible as a competitor as we face increasingly hostile foreign markets, including the United States, which on top of the usual protectionist elements, have found a new weapon to advocate for protectionism in the so-called post-911 era. This to me makes the value of making the whole country open for trade as high as ever and the strategic imperative is stronger than ever.
Trade doesn’t flow before government sets up routes. I don’t know how much of a country we would have had if, for instance, there weren’t a railroad route across the country. Everyone from truckers to the police to the automobile associations have been screaming for a 4-lane highway across the country from east to west for years and we still don’t have it. There is no strategic vision and if we continue to be complacent in this and other areas like productivity, we’re are going to be left behind.
I thought Mr. Reynolds understood this better than anyone.
In the meantime, Canada full accepts a tax increase of $15 to $20 billion a year from the losses that occur to the whole country because of lack of trade between the provinces. This is aside from the fact that it is ludicrous that you can’t buy beer brewed in New Brunswick in Ontario. Why can’t I buy milk from Nova Scotia in Ontario? Just on an emotional, patriotic level, it is damning and fearsome that we still have this situation. We should, after all, have a country and I think it is not too much to ask after 130 years that it start with economics.
Mr. Reynolds is the one who pointed out, after reporting about Courchesne’s lecture at Queen’s recently about economic productivity, that we have been amazingly complacent in the face of the par on the dollar, which has resulted in about a 70% increase in the price of everything for exporters. How should we act complacently about the fact that interprovincial trade barriers in turn exact a certain tax on our economy? Why should be tolerate that anymore? Why shouldn’t a strong federal government simply say that this has to come to an end and challenge it in the courts if necessary? The constitutional and legal answer would be clear: the provinces cannot continue to do this.
This is not to say that I am not optimistic and could not share Mr. Reynolds’ belief that in their own sweet time these things will happen, but I think we should have a greater sense of urgency in light of the incredible tectonic shifts that are occurring around the world economically and technologically. The quiet, acceptable disorganization of the 19th century and the 20th century simply cannot be tolerated any further. We should fight to get rid of these rusty shackles as soon as possible.