By Alec Bruce
As Appeared on page D6
I once said that it would be an iron-cold day in April before you’d find me and the Canadian Federation of Independent Business – that bastion of unapologetic tax cutters, social welfare haters, and smug, free-market elitists – agreeing about anything. But have you checked the weather lately?
In a stern rebuke to Atlantic Canada’s lazy, cake-eating governments earlier this week, CFIB’s local vice-president, Leanne Hachey, declared that baroque, obstructionist inter-provincial trade rules cost the region’s small- and medium-sized businesses more than $1 billion in revenues every year.
Consider that this sum is nearly as large as the total annual contribution tourism and hospitality industries make to the Atlantic economy, and the fact that small- and medium-sized businesses account for seven in 10 jobs in this still-hopeful, determinedly hard-working corner of the globe, and you get the picture.
As Hachey told one newspaper, “It is way too complicated to do business in the four (Atlantic) provinces . . . A lot of it has to do with parochialism. We’ve been used to doing things a certain way and God forbid we ever combine forces and work together as a region.”
Amen, sister. Now comes the hard part. How, precisely, do we dismantle these egregious barriers that effectively enshrine provincial jurisdictions behind regulatory walls as if they were so many medieval city-states?
There are no easy answers, as Stephen Kymlicka, Senior Policy Analyst at the Atlantic Institute of Market Studies, archly pointed out in a presentation to the Senate Standing Committee on Banking, Trade and Commerce back in October. “Administrative requirements such as head office or residency requirements and multiple filings provide a strong disincentive to setting up a branch office in Atlantic Canada,” he said. “In fact, it is structurally more efficient to leverage the mutual recognition of professional certification guaranteed under the NAFTA and service Atlantic Canada from the U.S.
“This is most dramatically seen in our acute labour shortage which is complicated by re-certification. The usual example in the literature is architects. Still, the problems are widespread. For example, my family moved to Halifax from Regina for health reasons. My wife’s credentials in Early Childhood Education were not accepted in Nova Scotia and she was required to take an additional course delaying her workforce participation.”
Beyond this, Kymlicka stated: “Barriers in the energy sector, especially power transmission, restrict growth potential. The key issue here is clarifying the underlying economics. Several years ago, the New England States negotiated a common transmission rate around which retail and distribution policy can be developed as appropriate. This standard allows for a realistic evaluation of alternatives in generation and transmission. Alas, Atlantic Canada does not have a common rate. This lack obscures the true cost of power generation and, arguably, allows inefficient plants to continue at a cost to the consumer. More to the point, it undermines cross-border co-operation on the development of a more robust regional power grid.”
Under the circumstances, I am dumbfounded by the pervasive unwillingness among the region’s provincial governments to choose the path of least economic resistance. The Canadian East Coast is a geographically and commercially contiguous zone of common interest, comprising barely three million people. Yet, it continues to function (dysfunction?) as a balkanized clutch of entitled principalities, where no entitlement actually exists.
Endlessly, we hear from provincial trade ministers and economic development pundits spinning public credulity into the golden fleece of comforting platitudes. Oh yes, ladies and gentlemen, we are having some very good discussions. Of course, my fellow citizens, I think we have consensus on some of the principles we should pursue. Naturally, dear folks, this will take some time, but we’re working on it.
Meanwhile, time is running out for New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland and Labrador. Our collective future is united, not partitioned. Our hopes are linked. Our dreams are shared. Our economic climate is the same.
And you don’t need a weatherman to know which way the global wind blows.
Alec Bruce is a Moncton-based journalist and author. His column appears in this space every Tuesday and Thursday. He may be reached via www.thebrucereport.com