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  • Ontario's middle and working class families are losing ground August 15, 2017
    Ontario is becoming more polarized as middle and working class families see their share of the income pie shrinking while upper middle and rich families take home even more. New research from CCPA-Ontario Senior Economist Sheila Block reveals a staggering divide between two labour markets in the province: the top half of families continue to pile […]
    Canadian Centre for Policy Alternatives
  • Join us in October for the CCPA-BC fundraising gala, featuring Senator Murray Sinclair August 14, 2017
    We are incredibly honoured to announce that Senator Murray Sinclair will address our 2017 Annual Gala as keynote speaker, on Thursday, October 19 in Vancouver. Tickets are now on sale. Will you join us? Senator Sinclair has served as chair of the Truth and Reconciliation Commission (TRC), was the first Indigenous judge appointed in Manitoba, […]
    Canadian Centre for Policy Alternatives
  • How to make NAFTA sustainable, equitable July 19, 2017
    Global Affairs Canada is consulting Canadians on their priorities for, and concerns about, the planned renegotiation of the North American Free Trade Agreement (NAFTA). In CCPA’s submission to this process, Scott Sinclair, Stuart Trew and Hadrian Mertins-Kirkwood point out how NAFTA has failed to live up to its promise with respect to job and productivity […]
    Canadian Centre for Policy Alternatives
  • What’s next for BC? July 4, 2017
    Five weeks ago the CCPA-BC began a letter to our supporters with this statement: “What an interesting and exciting moment in BC politics! For a bunch of policy nerds like us at the CCPA, it doesn’t get much better than this.” At the time, we were writing about the just-announced agreement between the BC NDP […]
    Canadian Centre for Policy Alternatives
  • Could skyrocketing private sector debt spell economic crisis? June 21, 2017
    Our latest report finds that Canada is racking up private sector debt faster than any other advanced economy in the world, putting the country at risk of serious economic consequences. The report, Addicted to Debt, reveals that Canada has added $1 trillion in private sector debt over the past five years, with the corporate sector […]
    Canadian Centre for Policy Alternatives
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The Financial Crisis and Interprovincial Trade

In Saturday’s Globe, Gordon Campbell ridiculously presented eliminating inter-provincial barriers as a response to the global financial crisis. Although Marc beat me to the punch in replying, I have a few further thoughts.

Several months ago, TILMA boosters said that removing alleged barriers to labour mobility was particularly pressing given a “tight” labour market. Today, the same people say that removing barriers is particularly pressing given an economic downturn and rising unemployment. These contradictory arguments confirm that TILMA is a solution in search of a problem.

The notion of eliminating inter-provincial barriers as a response to the financial crisis reminds me of a point that J. K. Galbraith made in The Affluent Society: the economic losses caused by microeconomic inefficiencies are very small compared to those caused by macroeconomic problems. Even wildly excessive estimates of supposed inter-provincial barriers suggest that these cost 0.25% of GDP. Even the most conservative estimates of how much the financial crisis is reducing annual GDP relative to normal growth are at least ten times larger. Stimulating the overall economy is far more important than ironing out tiny inefficiencies.

The renewed attack on supposed inter-provincial barriers is especially bizarre because, this past summer, Quebec dismantled its famous restriction on coloured margarine and all Premiers agreed to mutual recognition of occupational credentials as well as financial penalties for AIT disputes.  It’s hard to imagine what “barriers” could remain. The Throne Speech’s tough talk on inter-provincial trade may well just position the federal government to claim credit for what provincial governments were already doing.

I think that there is an opportunity to counterattack on this front. Provincial opposition parties should expose governments that publicly rejected TILMA but are now introducing some of that deal’s worst features through the back door.

For example, during the 2007 provincial election, Dalton McGuinty wrote, “We will not sign an agreement that would lower or would allow for the lowering of environmental, labour, health and safety standards for Ontario workers.” But by agreeing to “mutual recognition of occupational credentials between all provinces and territories,” he is indeed committing to lower Ontario’s standards to permit the minimum standard maintained by any other province or territory.

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