By: Sean McGowan
During the week of November 4th, people around the world patiently waited to hear who would win the 2020 United States Presidential Election. Canadians were overwhelmingly hoping for Biden, especially in Ontario, where 84% of the public would have voted for Biden if given the chance. Across the country, however, Albertans were waiting for the result with a mixed mindset. The same poll by Leger, indicated that almost one in three Albertans said they would have voted for Trump. This discrepancy poses the question, why do certain regions of Canada have differing opinions on the American presidential candidates? The answer rests in Canada’s interprovincial trade policy.
Biden’s strong support in Ontario is not a surprise considering that over 50% of Ontario’s exports, including domestic exports, are traded with the United States. A Biden win would mean an end to sporadic tariffs and the start of market stabilization in Ontario.
Like Ontario, Alberta has over 55% of its exports, including domestic exports, en route to the United States. But a win for Trump would potentially signal the stabilization of Alberta’s struggling economy. His support for the Keystone XL pipeline and the proposed Alaska/Alberta rail line could give Albertan economic production new life, whereas Biden has opposed these projects. Regardless of one’s opinion on Trump as a person or on the oil and gas industry, Trump’s policies help Alberta.
Many factors have caused Canadian provinces to rely on the United States as a trade partner, but interprovincial trade barriers remain one of the largest factors. Senators Jane Cordy and Diane Bellemare have called the issue of interprovincial trade barriers a national embarrassment. They stated that it is equally as difficult for provinces to trade with one another as it is for them to trade with other countries. The mismatched regulations, stipulations, and taxes posed on goods arriving from other provinces have caused problems for Canadian businesses. This is partially why Canada has diverted from an East/West driven economy to a series of North/South economies, since the first North American Free Trade Agreement. Both Alberta and Ontario trade more with the United States than they do with each other. The reason behind this problem does not rest in geography alone; Ontario trades more with the United States than it trades with any other Canadian province.
Interprovincial trade has been identified in the federal throne speech, but it is not a matter that can be unilaterally solved by the federal government. Provinces must work together to solve this problem. There have been efforts to eliminate trade barriers in the new Canadian Free Trade Agreement but 140 of the 353 pages in the document outline exceptions to this commitment. Alberta’s premier, Jason Kenny, has unilaterally removed eight of fourteen barriers in Alberta which limit interprovincial trade with the hopes that other provinces would follow suit. Manitoba, Nova Scotia and Ontario have partially answered the call but there has been little fundamental change for the nation as a whole.
Now more than ever, Canada’s focus should be on improving internal trade. With a rollercoaster of political conflict occurring in the United States and a need for economic recovery after COVID-19, the federal government needs to act. It can do this by following through with its throne speech commitments to use section 91(2) of the constitution to take federal jurisdiction on the issue of interprovincial trade where it can. With this regained power, the federal government needs to lead the provinces to facilitate genuine free trade agreements. Currently, the Canadian economy is missing out on up to $130 Billion in revenue each year due to these trade barriers. Instead of relying on the United States for economic prosperity, Canada needs to help itself.
When considering the opinions on the United States election from around Canada, it is peculiar to see a nation with such different perspectives on how the domestic economy will be affected. This is yet another sign that the provincial governments must remove trade barriers within domestic borders. What is good for one province should be good for another. Although the complexities of Canadian federalism will always be a troubling factor, Canada could do more to unite the economy rather than remain divided over individual trade relationships with the United States.
Sean McGowan is a first year Master of Public Policy candidate at the University of Toronto’s Munk School of Global Affairs & Public Policy. Sean has previous experience working at Western University’s Centre for Urban Policy and Local Governance, and Leadership and Democracy Lab as a research assistant and a political risk analyst, respectively. He has interests in urban, environmental, energy and economic policy. Sean holds a Bachelor of Arts (Honours) in Political Science from Western University.