Uncertainty around U.S. tariffs on Canadian exports has some Prince Edward Island businesses saying trade barriers between provinces should be eased — but cautiously.
Some business owners, like Sebastian Manago, said it’s easier to sell their products to Americans than it is to break into other provinces.
“There are many, many hurdles… in order to get listed anywhere in Quebec,” said Manago, who owns Double Hill Cidery in Caledonia, P.E.I.
“It’s not because Quebecers don’t like our product. Whenever they come here, they say, ‘Why can’t we get this in Quebec?’ So there is a market there, but in between me and my consumers are various barriers in order to get into other provinces.”
With Canada and the United States in the midst of a trade war, talk of removing barriers to interprovincial trade has been renewed. CBC’s Wayne Thibodeau found out that could mean both benefits and drawbacks for businesses on Prince Edward Island.
U.S. President Donald Trump’s threat to place punishing tariffs on virtually all Canadian goods shipped south of the border is looming large over both countries.
Trump has promised at least a 30-day pause before putting those tariffs into effect, leaving the deadline at early next month.
But despite the promised reprieve, on Monday evening the president went ahead and signed an executive order imposing 25 per cent tariffs on imported steel and aluminum products from countries including Canada.
It’s all opened up a lot of talk on this side of the 49th parallel about removing interprovincial trade barriers.
A 2019 International Monetary Fund report showed that Canada as a whole was leaving money on the table by keeping these barriers in place. In today’s dollars, removing them would pump $245 billion into the economy, the report’s co-author said recently.
Chief political correspondent Rosemary Barton speaks with Internal Trade Minister Anita Anand on internal trade barriers and the government’s efforts on tariffs during this 30-day pause. Plus, Rosemary also speaks with Marilyn Dib of Cedars and Co. Food Market about customers choosing to buy Canadian and how she’s prioritizing Canadian inventory at the store.
Manago said that could provide a golden opportunity for P.E.I. producers to tap into a larger market.
“We should be the loudest at the table saying, ‘Bring down those barriers,’ because [as] the smallest province we’re locked into the smallest market,” he said.
“It’s not because we’re stupid, it’s not because we’re not creative, but we’re just locked into those little markets.”
Unintended consequences?
In the case of alcohol, most Canadian wineries, breweries and distilleries can’t sell or ship directly to consumers in other parts of the country. Most provinces have their own liquor retailers, like the P.E.I. Liquor Control Commission, that have different rules related to selling, storing and labelling alcohol.
But there is some concern about removing interprovincial trade barriers completely on things like alcohol. Part of the reason provincial liquor commissions were established in the first place was to make sure smaller booze makers wouldn’t get squeezed out by competition from other provinces.
“I’m not sure if it’s a concern. I wonder how other markets or other suppliers would view this [P.E.I.] market,” said Dave McGuire of Bogside Brewing in Montague.
There is a lot more to it than just ‘open it up and let’s go to it.’— Cory Deagle, P.E.I. trade minister
“Maybe the opportunity’s bigger outside [the province] for us but… there may be unintended consequences that may need some sober second thought,” McGuire told CBC News.
Trade ministers from across Canada met in Toronto last week to discuss strategies to counteract potential U.S. tariffs.
Cory Deagle, P.E.I.’s minister of economic development, innovation and trade, said there are a lot more factors at play than just restrictions on alcohol and cannabis sales.
Land ownership and labour mobility restrictions are some examples of interprovincial trade barriers that likely still have merit, he said.
Still, Deagle said there’s “huge potential” in removing some obstacles where it makes sense, but he said that will take a lot of conversations at the provincial level.
“It might be great if they can sell [products] in Ontario, but does that mean that a big company in Ontario can come to P.E.I. and sell here and perhaps eat up a lot of the market space?” he said. “There is a lot more to it than just ‘open it up and let’s go to it.'”
Deagle said the province is launching an online survey this week to hear directly from Island exporters about what barriers they face and what the government might be able to do to help diversify their markets. He said there will be money in the upcoming budget to help make that diversification happen.
