Opinion: Anger with Trump won’t solve our economic problems

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The obvious way to start is with mutual recognition of standardsLast updated 23 minutes ago Serious interprovincial trade and labour reform is much harder than being angry at Donald Trump, but now, because of Trump, we really need to get on with it. Photo by zennie/Getty ImagesThe uncomfortable truth about the dramatic turn in Canada-United States relations is that no U.S. deal, no matter the price, was going to change Canada’s economic position much. Our situation wasn’t determined at a bargaining table in D.C. It was set here at home over the past 30 years — one permit delay and provincial carve-out after another. Ottawa’s to-do list of “nationally important projects” is proof the current federal government at least half-understands the problem. It also shows exactly how far we are from finishing the job of “building Canada strong at home.”THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountNobody in a transaction hands you a better deal because your case is more reasonable. They price your alternatives. Ours are poor, and the Trump White House can see it. Look at what happened last fall, long before the trade talks ruptured. Nutrien, a Saskatoon company mining Saskatchewan rock in a commodity Canada leads the world in, chose Longview, Wash., over Vancouver for its next major export terminal — a facility that will be able to move as much potash as every Canadian port combined.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againNutrien said it wanted “a co-operative port partner” — and found one outside Canada. Potash is our fifth-largest export, worth $9-11 billion a year. We didn’t lose that project to American subsidies. We lost it to our own approval timelines.Nutrien’s decision is symptomatic of why Canada loses in trade negotiations. The Peterson Institute modelled the American tariff plan and found it would leave our economy roughly half a percentage point smaller than it would otherwise be. In January, the IMF ran the same kind of exercise on our own internal regulatory and trade barriers and found that clearing them would leave our economy close to seven per cent larger. An earlier IMF study had already put the tariff-equivalent cost of our interprovincial barriers at 21 per cent on goods and services crossing provincial lines, seven times what the same kind of barrier costs the United States.We have spent 18 months in a national fury over American duties a fraction that size.It’s hardly surprising that Washington felt it could walk right up to the edge and ask for more than any Canadian government could accept. It knows what we actually brought to the negotiating table: A country that can’t move its own potash to its own coast. A country where a nurse licensed in Halifax can’t work in Winnipeg without starting over. A country where productivity growth has crawled along under one per cent a year for two decades. That isn’t a country with alternatives. It’s a captive supplier. Trump’s tariffs were the first time anybody bothered to charge us for it.The good news is that none of this requires American permission to fix.Start with “mutual recognition” as the default: Any good, service or professional credential lawful in one province should be lawful in all. Every existing exemption goes on a hard sunset, with no renewal without a public vote in the legislature that wants it.We already have a preview of what a half-finished version of this looks like: the federal Free Trade and Labour Mobility in Canada Act, in force since January, though it only binds Ottawa. It tells the federal government to treat provincial rules as good enough for federal purposes. It does not oblige Alberta to accept Quebec’s rules, or vice versa. Provinces have slowly been filling that gap themselves, bilaterally. B.C. has separate deals with Ontario, Manitoba and Yukon. All 10 provinces and three territories signed on to a mutual recognition agreement on goods last November. So far, however, it’s a patchwork, it’s reciprocal by design, and it’s largely silent on services and professional licensing, which is where most of the money is.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Two objections always come up at this point. The first is the Delaware analogy: that some province will gut its rules to become the low-cost jurisdiction everyone routes goods and workers through, dragging the rest down after it. But mutual recognition isn’t deregulation. It doesn’t touch what a province can require of anyone selling into its own market; it only says that a good or credential already lawful somewhere in Canada doesn’t need to be reapproved to cross a line on a map.Manitoba, for instance, loses nothing by accepting a Nova Scotia nursing licence and keeps every right to set its own rules for its own hospitals.The second usual objection is the mirror image: that Ontario, with about 40 per cent of the economy, becomes Canada’s California, and its standards become the default everyone else must match. There may be something to that, though when a large, credible jurisdiction’s standard becomes the practical benchmark, it tends to pull weaker regimes up, not down, because producers who build to Ontario’s rules to sell there build to them everywhere else, too.Polite encouragement having failed for 30 straight years, Ottawa does have one more tool it can use to help create a single, national market. It should make federal infrastructure money conditional on internal-trade compliance.Serious domestic reform is much harder than being angry at Donald Trump, but now, because of Trump, we really need to get on with it.Matthew Lombardi is co-founder of The Icebreaker, a national defence tech innovation network. We apologize, but this video has failed to load.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.