Quebec has the highest number of barriers to trade between provinces: economic institute

Quebec is the province that imposes the most barriers to interprovincial trade, according to a report from the Montreal Economic Institute (MEI) which says that this protectionism harms the Quebec economy.

MEI public policy analyst Gabriel Giguere said barriers to internal trade are not the most publicized issue, but they have a significant economic effect on Canada.

“The elimination of these barriers makes it possible to increase productivity, and that is an important thing for the standard of living of Canadians,” he said.

Trade barriers between provinces push the price of goods and services up by 7 per cent, according to a study published in 2017 by Statistics Canada.

Giguere cites recent studies, which estimate that the annual gross domestic product (GDP) in the long-term could increase by between $110 billion and $200 billion if barriers between provinces were abolished.

The MEI lists 35 Quebec exceptions to the Canadian Free Trade Agreement, a number which has not changed since 2017.

“There are some barriers which are much too broad,” said Giguere.

The analyst gives as an example the restrictions affecting the forestry sector. All wood harvested from provincial forests, including biomass, must be entirely manufactured in Quebec.

He also said that Quebecers would benefit from a more diversified offer if they could purchase alcohol from suppliers in other provinces.

“Although it has been possible since 2022 to go to another province and bring alcohol back, it is a little complicated,” he said. “When you want a specific wine from the Okanagan Valley (in British Columbia), you would have to take a plane to pick it up, whereas it is not possible to have it delivered to your home.”

Quebec is in the middle of the pack when it comes to labour mobility. The province has four exceptions to the Canadian Free Trade Agreement that relate to labour mobility.

Giguere questions the relevance of restrictions on the mobility of professionals between provinces.

“I don’t understand why, in Quebec, it is not possible for a dentist from certain provinces to practice here. The patient is no different. We all have similar mouths,” he said.

In a labour shortage context, he said these constraints do not help Quebec.

“When Quebec has a barrier, it is a barrier to entry, it is not a barrier to exit. So, it is possible for a person, a paramedic (ambulance) for example, to go and work elsewhere. It is Quebec that is restricted from a potential pool of workers,” said Giguere.

This report by The Canadian Press was first published in French on Nov. 30, 2023.