Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue No. 3 - Evidence - March 10, 2016
OTTAWA, Thursday, March 10, 2016
The Standing Senate Committee on Banking, Trade and Commerce met this day at 10:32 a.m. to study the issues pertaining to internal barriers to trade.
Senator David Tkachuk (Chair) in the chair.
[English]
The Chair: Good morning and welcome to the Standing Senate Committee on Banking, Trade and Commerce. My name is David Tkachuk, and I'm the chair of this committee.
Today is our third meeting of our special study on issues pertaining to internal barriers to trade. It is my pleasure to welcome today as individuals Dan Albas, M.P. for Central Okanagan—Similkameen—Nicola; and Jack Mintz, President's Fellow, The School of Public Policy, University of Calgary. He joins us today by video conference from New York City. Dr. Mintz is also a scholar-in-residence at the Columbia Law School.
Gentlemen, thank you for being with us today. I want to note that there were other witnesses invited. We are having some problems with Environment Canada, who are not interested in testifying on environmental issues being part of a province's attempt to regulate trade. Nonetheless, they declined.
We also had consultation with the co-chairs of the Forum of Labour Market Ministers. They declined an invitation to appear, as did a council of ministers responsible for transportation and highway safety, but that's because it was not possible at this time, so we're going to be going after them again. We are also going after environmental officials again.
I am glad that we were successful today on our budget. It was passed by Internal Economy, so we are going on the road. We're going to have some options, which we will probably email about, because the sooner we get on this thing, the better.
I will table the motion today.
Now I will ask the two witnesses to make their representations individually, to be followed by questions and answers. We will start with Mr. Albas, who is a Member of Parliament and also brought forward a private member's bill. He will tell you the whole story.
Dan Albas, Member of Parliament for Central Okanagan—Similkameen—Nicola: Thank you, Mr. Chair. I would like to begin by thanking all of you sincerely, not only for inviting me to be here with you today, but more importantly for your study into Canadian internal trade at this critically important time. I do not say "critically important'' lightly, as I have very serious concerns that the subject of internal trade is on the verge of taking several steps backward after recent encouraging progress.
First let me quickly revisit the recent progress. Thanks in part to the passionate efforts of the former Minister of Industry James Moore, the subject of internal trade was a prominent one by the former government. This hard work culminated on August 29, 2014, when Canada's premiers at the Council of the Federation conference in P.E.I. announced that a new agreement on internal trade would be "directly concluded by March of 2016.''
Obviously, we are now at the eleventh hour, as the clock keeps ticking. Even by the premiers' own estimation, internal trade represents 20 per cent of Canada's GDP, at $366 billion annually.
Let us not overlook that we are also poised to sign off on CETA, the Comprehensive Economic Trade Agreement with the European Union, and maybe — or maybe not, depending who you talk to in Ottawa — the Trans-Pacific Partnership.
We are looking at creating a situation where, in some cases, businesses in other countries will have better access to our Canadian market than some Canadian businesses or individuals will. I think we would all agree that is unacceptable.
So why am I worried? I will use my wine bill — which the good senator had mentioned at the beginning — to end the Prohibition-era blockade against direct-to-consumer shipping of Canadian wine as an example. My bill received unanimous all-party support in the House of Commons and in the Senate, back when there was more than one party in the Senate, in the summer of 2012. It was further encouraging to see a subsequent economic action plan budget also expand my bill to include direct-to-consumer shipping of craft ales and Canadian spirits right across this great country.
However, in the years since that occurred, only British Columbia, Manitoba and Nova Scotia have fully adopted free internal trade in Canadian wine. Alberta actually made a policy to make it more difficult to ship Canadian wine. Newfoundland and Labrador spent tens of thousands of dollars attempting to prosecute FedEx Canada for shipping just a single case of Naramata Bench wine.
The Chair: That's because they grow such great wine in Newfoundland and Alberta.
Mr. Albas: This, despite the fact that seven out of 10 bottles of wine sold in Canada are made in countries outside of Canada. That's a fact I want to reiterate: Seven out of every 10 bottles of wine sold and consumed in this country are not from this country, despite us having some of the greatest wines, I would say, in the world.
To this very day, Ontario and Quebec have consistently refused to embrace free trade in Canadian wine.
Here is where I am more concerned: Last week, Canadian premiers met with the Prime Minister in Vancouver to hammer out an agreement on a variety of things, particularly a national carbon price. As we all know, an agreement failed to emerge.
I mention the Vancouver meetings because the Prime Minister stained these national carbon-pricing discussions right smack in the middle of what should be discussions on how we should be finalizing the new agreement on internal trade, something that all provinces have already agreed to do, working in partnership with the leadership of the federal government. But now that leadership has moved in a different direction.
We all know there was agreement between the provinces on a new agreement on internal trade. There was no agreement in Vancouver on a national carbon-pricing framework. Thus, the disagreement that occurred in Vancouver last week, and I question what level of commitment there will be in the remaining weeks of March for the premiers to agree on a new agreement on internal trade. That is even more pressing as Saskatchewan has an election in less than a month and Manitoba not so long after that.
I should also add that no Liberal cabinet minister had internal trade mentioned in their mandate letter.
With the exception of the good work that this committee is doing, the only other time that the subject of internal trade is raised in this place is when I have raised it in the House of Commons during Question Period.
It is for these reasons I'm concerned that we may not see a promised new agreement on internal trade that is desperately needed. That is why the work you are doing here is so critically important, and I look forward to answering questions and assisting you in any way that I can.
Internal trade, from my experience, is not a partisan issue, and unlike international trade, which is sometimes left versus right, I would argue that internal trade is right versus wrong. Canadians agree that eliminating interprovincial trade barriers and increasing internal trade is the right thing for us to do. Let's hope we can find some solutions on how to achieve that.
The Chair: Thank you, Mr. Albas.
Dr. Jack Mintz, President's Fellow at The School of Public Policy with the University of Calgary, from New York, I understand you have a presentation.
Jack Mintz, President's Fellow, The School of Public Policy, University of Calgary, as an individual: That's correct. Thank you very much, senators, for having me to appear in this manner. I was able to walk from my place this morning over here, and it is above 70 degrees Fahrenheit in New York today. It is exceptional weather.
The ongoing decades-old discussion, going back to the 1985 Macdonald Commission report, has been focused on whether Canada should pursue with more gusto any economic gains arising from reducing barriers to trade and mobility that would be found in a stronger economic union.
It is a difficult issue for a variety of reasons. First, many studies have shown that the gains from more economic integration are relatively small, which does not impel policy-makers to put internal trade matters on the front burner for legislative action. The largest estimate was 1.5 per cent of GDP from an early study, which was likely on the high side. Other estimates have been as low as 0.1 per cent, which would suggest gains of no more than $2 billion a year. Although positive, this seems relatively small in an almost $2-trillion economy.
However, these studies have been based on an economic analysis assuming competitive economies and frictionless trade in the absence of institutional factors. Allowing for relevant institutional features, higher gains from trade evolve. For example, early studies on NAFTA suggested similar economic gains for internal trade. However, by incorporating more complex features, such as non-competitive or oligopolistic industries, estimates of economic gains rose as high as 6.5 per cent of GDP.
A 2013 study by my colleagues at the University of Calgary, Trevor Tombe and Jennifer Winter, take into account distance and differences in costs of production across provinces. They found that relaxing barriers to trade within Canada could raise output per worker by as much as 8 per cent. That's actually quite significant.
We still need more convincing studies as a result.
Second, Canada has had weak jurisprudence in favour of removing barriers to trade. Section 121 of the Constitution Act states:
All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.
From what I understand as a non-lawyer — let me emphasize that even though I'm at the Columbia Law School right now, I'm not a lawyer — this clause has been interpreted to narrowly restrict provinces from imposing tariffs, although some legal experts argue that it could be more widely interpreted to include other barriers to trade. In contrast, the U.S. Commerce Clause allows congress to override state regulations that interfere with commerce among states and with foreign countries. The European Union incorporates two principles: free trade of goods and services; and freedom of establishment and to provide services that has put a number of constraints on member states, such as the application of tax law.
Our legal constraints on provinces to interfere with trade, mobility and freedom of establishment are much weaker by comparison.
Third, Canada is a relatively decentralized country compared to many federal countries. Provinces and territories spend more on programs than the federal government. They also now have more own-source revenues than the federal government, in contrast to countries like the United States and Mexico, where taxes are collected centrally.
So it is not surprising that provinces are much more independent in decision-making and have greater opportunities to impose barriers to trade and mobility in their own interest. This is not necessarily a bad thing. Regional differences in preferences and economic capacity require policies to vary so they are sensitive to the needs of the population. Provincial variation can also lead to more policy innovation as provinces learn from each other.
Nonetheless, there are economic gains for provinces to remove economic barriers to trade and movement of people, just like in the international context, without giving up sovereignty. In fact, trade and other agreements are an exercise of sovereignty itself.
As is typical for Canada, we have not used fiat at the federal level to force provinces to reduce barriers to trade. Instead, agreements on internal trade, beginning in 1995, have been developed to reduce selective barriers. Some provinces have also adopted agreements to reduce trade and mobility frictions in the interests of growing their economies. The Tombe-Winter analysis suggests that internal trade costs have fallen by 10 per cent as a result of these agreements.
However, much more can be done. Here are a few examples. Restrictions make it difficult for some professionals to move across provinces, despite some recent improvements. Provincial marketing boards restrict trade in certain food products, including milk. There are also restrictions, as we just heard, in wine and beer. We still do not have a harmonized capital market with a single regulator; businesses have to deal with a myriad of financial, insurance and pension regulations.
Also, even though the federal government is responsible for transportation policy, we cannot seem to get electricity transmission lines and pipelines built across provincial boundaries. Additionally, unlike some other countries, Canada has lacked building corridors for highways, rail, transmission and pipelines to move products to tidewater.
Provincial procurement policies continue to favour domestic over out-of-province businesses, and out-of-province students pay higher tuition fees in Quebec, while Ontario has introduced a new financial aid system that supports students studying only in Ontario universities, not unlike other provinces.
If someone works and lives in different provinces, it is impossible for them to own automobiles in separate jurisdictions under current licensing and insurance practices. But, as I know from some friends, if someone lives in a winter home in Arizona, they can use their Canadian driver's licence to own a car there.
The current approach to reducing internal barriers is on a case-by-case basis. This is not only slow but has been much less comprehensive, resulting in only marginal changes.
Instead, Canada could consider a broader approach that would lead to a stronger economic union. For example, the federal and provincial governments could agree to a negative list that would provide explicit exclusions from policies that would otherwise be based on the principles of free trade and mobility. The provinces could also agree to mutual recognition, similar to the European Union, where one province would recognize the standards of another even though they might differ, often just marginally. Also, free trade agreements like the Canada-European economic agreement and Trans-Pacific Partnership can include clauses that include provincial policies that would not only reduce barriers to trade with other countries but also among the provinces, as well.
Overall, Canada has made only some progress to improving the economic union in Canada and reducing barriers to trade and mobility. It can do much more, and it is good to hear that the Senate is willing to take up this important task.
The Chair: Thank you very much, Dr. Mintz.
We will begin questions.
Senator Black: It sounds like New York is almost as warm as Calgary.
Mr. Mintz: That's what I hear.
Senator Black: Are you able to comment on what Australia, the U.S. or the European Union do in respect of internal trade that might give us any guidance and might be a model here?
Mr. Mintz: I'm not as aware of Australia in terms of what they do in internal trade. It is not a country I have looked at particularly, although I know they have developed corridors for pipelines, transmission, rail and other things. If you want to get approval for projects, it is much faster in Australia compared to Canada. As a result, a lot of companies are putting money into Australia as opposed to Canada because of the fact that we have such a slow regulatory system.
This is an example where I think internal trade issues have interfered with what we could achieve in Canada.
As I mentioned in my comments, the United States has constitutional roles for the federal government, as does Europe at the European level, that do put some constraints on what state members can do. Let me give you an example of the European one, which I'm very familiar with, that's with respect to taxation.
What happened in Europe is that there were several European courts of justice decisions that virtually undid what are called the imputation systems in Europe, under the corporate and personal tax. These were systems that allowed for the full integration of corporate and personal tax. The reason they were undone by the European courts of justice was that the various countries would put a minimum tax on dividends before the dividends were paid out to shareholders, but they only gave a refund to domestic shareholders in their country and not to shareholders in other states.
That was argued in the European courts of justice as interfering with the free flow of capital across jurisdictions throughout that kind of approach. They told the member states that they would have to use an approach which recognizes individuals in other states as a result.
There have been a number of court decisions in Europe that are very similar and have put some limits on what countries can do. That's because of the strength of the principles under the European Union with regard to trade in goods and services and freedom of establishment.
Senator Black: May I ask one other question?
Dr. Mintz, would you support a regime in Canada that would provide that free trade amongst the provinces and territories of Canada is a given on all items unless specifically exempted?
Mr. Mintz: Yes, that was the comment I had at the end. I did pick up this proposal — it wasn't my original one — but I think it makes a lot of sense to think about having negative lists. In other words, the provinces agree to some principles and then if they want some specific exclusions, then the exclusions could be provided under the principles. That would mean that a lot of other things that I don't think the provinces even think that much about would then get covered.
There is some thought that should be given to that.
Senator Tannas: The negative list idea is certainly one that the current minister has seized upon. In his testimony, he talked about that as being his hope of a way forward in this. We have talked about this issue for decades as both of you mentioned. We have been through an era of free trade agreements internationally that now have put us in a situation where Canadians don't have the same access to the markets of Canada that people and companies in other countries do.
Mr. Albas and I just had a discussion on this. To me this becomes an issue of rights for Canadians. Given that we have seen time and again that it is hard in almost any situation, and even harder in politics, to get 12 people to agree to anything, I wonder what both of you would think about the nuclear option of a Supreme Court reference with respect to Section 121 around this.
After a suitable amount of time, or even a suitable amount of time under the threat of a Supreme Court reference, to try and get the negative list option through, if that can't be done, is there a point at which somebody needs to blow the whistle, clear the pool and have the Supreme Court weigh in on this and compel provinces to deal properly?
Mr. Albas: I will confirm that also, like Dr. Mintz, I'm not a constitutional lawyer. Given that, I gave an interview a while ago where a reporter asked the question, "Well, if there cannot be an agreement with the provinces and territories with the federal leadership, can federal government not impose itself?'' You rightly, senator, raised section 121, and if you look at it in Dr. Mintz's presentation, he speaks to it on the first page.
There was a case called the Gold Seal case in the early part of the 20th century where a particular court had narrowed the scope. Many constitutional scholars, for example, constitutional lawyer Ian Blue, have pointed out that it was a very narrow definition and, again, if this does, as you say, senator, become more of a question of rights, perhaps that could be an alternative if we can't find some way of collaborating.
I should say this again: I go back to Dr. Mintz's point that the European Union, where they have a single market, a collective history of fighting wars, cultural differences, different languages and legal traditions, can create a single market. Certainly, in Canada, we can apply our collective wits and do that.
Perhaps this committee might want to call in witnesses who have that expertise. The danger, in my mind, would be if you ended up with something as narrow, or more narrow. On the flip side, with the Supreme Court, a thorough process would be done and you would have leadership from both the federal — and many provincial governments may oppose — I imagine some provinces would actually argue in favour.
If those points are raised in a legitimate and fair way — not just historical arguments of confederation, but economic arguments and ultimately the rights issue — I think we may see progress. That would be a legitimate alternative, though I would imagine, in our current context, an agreement with a full negative list with a proper trade dispute resolution process would be welcome.
Mr. Mintz: Let me echo that it would be preferable to get an agreement as opposed to using a Supreme Court reference, which is like a nuclear option.
There is nothing preventing people, in the private sector, from making the same case. I'm surprised it isn't happening, and in fact, maybe someone really should. When you read section 121 it doesn't talk about tariffs, but it does talk about goods. I'm not sure it would apply to labour mobility, for example, because it doesn't say anything about service. It talks about the manufacture of goods, et cetera.
I'm not a lawyer, but just in reading it, I'm not sure it would give you the full scale of what an agreement could achieve.
Certainly, there are things that would suggest that it could have a broader application when it comes to non-tariff barriers for goods being sold across the country. I'm surprised that someone in the private sector, who has been finding that being blocked in Ontario over wine, for example, if this is hurting their trade, hasn't already taken this to court.
Senator Enverga: Thank you for your presentation. In spite of the global economy, we are concerned there are still internal barriers, and it is very hard for us.
I know that you have acted to make liquor flow more smoothly and freely across the country. Can you tell me, Mr. Albas, what is the result of that? Have we increased our GDP or any provincial GDP? How does that stand?
Mr. Albas: I believe Statscan came in, and again, different provinces will take different statistics and make them publicly available in different ways.
I will say that since Bill C-311 was passed and received Royal Assent, it created a personal exemption for people — for individuals — to be able to order wine by phone or mail, or to carry it on their person.
What has happened in British Columbia — I'm happy my province supported the bill — Premier Clark obviously sees free trade as being good not only for Canada, but in terms of seeing B.C. wine in different areas of the country, and that is a good thing.
In the years since the introduction of these measures, we have seen the sales of B.C.-made wine go up in British Columbia. Right now, someone from B.C. can order directly from a winery in Ontario, but the reciprocity is not there. That's where we end up with a very uneven playing field. Certain provinces have decided that they will protect their liquor monopolies, despite the fact that, if you look at the example of British Columbia, there are more domestic sales of B.C. wine than ever, and that's with this being out.
I would simply point out that direct to consumer, particularly if you start talking about beer, it's going to be almost negligible because of the cost of shipping. When someone says, "I would like to order a bottle of wine for a special event or a special occasion,'' or to send some home to their families — the same as if someone was visiting some of the Maritime Provinces and they wanted to send lobster back home — why would we want to stop that?
So, I don't have specific numbers, senator, but I would say the direct-to-consumer market would be very, very small. Again, for small family wineries that do not produce enough to be able to sell to large liquor monopolies, opening up their market like this is incredible. I do know we have a senator from Nova Scotia. I'll give you a good example. Nova Scotia has some of the lowest consumption rates of wine in the country, yet they have some of the most arable land for growing grapes. Nova Scotia sees this as a great way not only to augment their production of wine, but also to increase tourism. And that's one of the reasons why Nova Scotia has introduced regulation that would allow for the free trade of wine within Canada.
[Translation]
Senator Bellemare: My question is mainly addressed to Mr. Mintz. However, Mr. Albas, if you have any comments to add, please do not hesitate to make them.
Yesterday, we heard economists or statisticians from Statistics Canada, who showed us that lately there has been good progress in the interprovincial trade in services. This fact is also related to labour mobility.
In your experience of markets and mobility in Europe and the United States, how does Canada compare with regard to labour mobility? Do you have any recommendations to make as to how to improve that aspect?
[English]
Mr. Mintz: Let me say a couple of things. As I have noted in my earlier comments, some of the work that I have seen suggests that, first of all, there has been a significant increase in interprovincial trade over the years. That's been a good thing, and certainly that's been important. And as the Tombe-Winter analysis has shown, the agreements that have come in since 1995, by their prediction using the 1990s data, actually reduced costs by 10 per cent for trade. There has been some positive movement in that regard and that gets to the point about labour mobility.
Certainly, there is more recognition of standards in other provinces, for example, in the apprenticeship programs. I have noticed some of the provinces are now recognizing the training that you might get in another province.
Certainly, if I want to have a doctor, it doesn't matter whether they are educated in Ontario or Alberta, you get the same very good education. There are still impediments that apply in a number of the services. If you're trying to move across provinces, you might have to agree to certain types of requirements in terms of passing examinations or getting certain types of schooling. That still applies in certain situations. That's where I think things like mutual recognition would make a lot of sense, where you say that, for example, if you have been working as a resident doctor in Ontario and you come to Alberta, that you will get exactly the same privileges as any other doctor will. I know of one particular case of a doctor — a breast surgeon, and a very highly qualified one — who moved with his spouse to Alberta and had a lot of difficulty practising there. It wasn't easy. It wasn't that his qualifications were not being recognized; it was the lack of ability to get operating time and similar privileges that other doctors had who were residents in Alberta.
Senator Bellemare: Would you consider establishing a national standard for occupational skills for Canada as they do in U.K.?
Mr. Mintz: The U.K., of course, isn't a federal country. It does have a more top-down approach to things, although certainly it is, I think, something that we should think about a little more clearly in terms of why I like this negative list concept. If you say, "Yes, we're going to recognize these things and okay, now, state where the exclusions are,'' I think it's more embarrassing for a province to do that, because they would then be forced to say why somebody else's training or experience isn't good enough for their province. I think that would be a much harder case to make.
Mr. Albas: If I may, Mr. Chair. I'll make a couple of comments on this. First of all, Dr. Mintz raises, again, federation. It's the college of physicians that actually regulates that, not the provinces. Even though it's a provincial jurisdiction, they have given that credentialing process over to the college of physicians. Here is a good example: We may have experts in a particular field of medicine that may be available for teleconference when someone in another province may not be able to see timely access, just because of labour shortages. We have to be able to square the circle, so to speak, and have a very honest discussion about labour mobility, both in person and also through teleconference.
I spoke to a surgeon recently who makes himself very much available to rural British Columbia through teleconferencing. If you can do that with an expert in his field in an urban centre to the rural areas, you also would probably be able to do that interprovincially. Again, however, that would interfere with some of the credentialing processes that colleges of physicians across the country have set up. We need to have a very honest discussion about how this will work given what the technology and changes have done.
Again, going back to the European Union, the E.U. has said they want to see similar joint regulation for the shared economy — Uber, Air BnB, and all these new technologies that are rather disruptive — to see that there is a common approach throughout the European Union. We're seeing right now in Canada that, on a province-by-province basis or even, in some cases, municipality-by-municipality, there is a much different approach. Again, these are the challenges we have. We also have to remind ourselves that the more advanced an economy is, the more services they have. If we want to see further development into these things, a good example is the free trade agreement we have with South Korea. Businesses that want to expand from Canada to Korea will probably have professionals from Canada, and vice versa, that they can hire and they can work on either side. To me, that's how you grow your businesses: You allow them to scale up and to reach for the sky. Services are going to be a huge part of that and we need to square these circles.
The Chair: Senator Wallin.
Senator Wallin: Thank you. We have been talking about inhibitors to trade, but you have raised, Dr. Mintz, the question of inhibitors to investment. This is an issue that has been on the Canada-U.S. file for a long time, and an issue I worked on when I lived stateside.
The capital market single regulator makes great sense to me, personally, and it certainly helps the flow of cross- border investment. How would it help domestically?
Mr. Mintz: First, I think we have landed in not a bad place terms of the capital market regulator model. A number of years ago, I wrote a piece saying that I actually think the best approach is something we have done in our tax harmonization agreements. That is, the federal government would have agreements with those provinces that would like to be part of a capital market regulator.
The provinces would get compensated for lost revenue, and maybe there are some other carrots that would get them into the agreement. Those provinces that are absolutely adamant about not being part of the capital market regulator would continue doing what they do, but we would also, at least, have some sort of passport mechanism to operate with them.
I think, for sure, Quebec would never go into a capital market regulator. I think we have to be realistic about that. We also may see Alberta, or maybe not. There is a split in the business community in Alberta over whether it should be part of the capital market regulator, but I think most of the other provinces would join. We would accomplish what I think would be a good thing domestically, which is potentially stronger enforcement mechanisms that are important for investor protection. But also it would reduce costs for people when they are trying to raise capital across Canada, and, of course, a more integrated capital market would be better.
The big issue is around governance. This is where Alberta, and particularly Quebec, have been concerned about whether Ontario would end up running the shop. But let's be honest, in the world today, when it comes to large companies, they are raising capital all over the world, not only in Canada. When they deal with Canada, they deal with the Ontario Securities Commission, anyway.
I hope, actually, the federal government moves soon on this. In fact, I was talking to a very senior person with the Ontario Securities Commission who feels it's really important that the federal government start moving on this file and complete it, because they are already starting to find that some of the people working at the Ontario Securities Commission don't know what is happening to their future and are looking at alternatives. I think the federal government needs to get moving on this particular file.
Senator Wallin: Thank you. I have a separate question on another one of the points that you raised. You're speaking to a room full of people who live and work in different provinces. Your example of the current licensing and insurance policies, we know it's there, and we know it's bizarre. What was the initial rationale for this? What is the defence that is mounted for it, even though it seems ludicrous?
Mr. Mintz: I'm laughing because this is one that has affected me personally.
Senator Wallin: And all of us.
Mr. Mintz: I have a place in Calgary and a place in Toronto and I needed a car in both places. It turns out that, of course, in Canada, if you go to one province, they rip up the driver's licence of the other province. You can only have one driver's licence, which I think makes sense because these things are connected to health care and the tax system and a number of other things. You're establishing residency, but if you don't have the driver's licence for the other province, then you cannot get insurance for a car. You need to have it. I found it very striking.
A friend of mine has a place Tucson, Arizona, and I know other friends in Phoenix. Arizona is very liberal on this. If you're a Canadian and you're down in Arizona, you can use your Canadian driver's licence to get insurance and buy a car to have while you're spending the winter there, and a number of people do.
I started talking to a lot of friends who go south to Florida. Florida has been going back and forth on this issue for Canadians with different types of requirements every several years. They have been changing the rules, from what I understand. I think it's bizarre, in Canada, to do this. I did talk to a very senior person in the Ontario Government and asked, "Why do they do this? I don't understand it.'' He had no answer. I have a feeling this is one of those things where not much thought has been given to it.
When you talk about labour mobility, we often think of people moving from one province to another with their families, and it's a matter of changing residence. As we have seen over the years, with mining and oil and gas, but also in other areas of the economy, you could have somebody who ends up working in one province but lives in another one with their family, and they do need a car, potentially, in their place. It's not a huge barrier to labour mobility, but it is one. I think it's bizarre that our provinces are doing that.
Senator Wallin: Is this strictly a provincial jurisdiction? Is there nothing the federal government can do on that file?
Mr. Mintz: No, but it's an example. If you had an agreement and if you talked about labour mobility, I would love to see a province try to say why they need to put this on the negative list.
Senator Wallin: Did you have any comment?
Mr. Albas: There are other things like transportation regulation. For example, I have a company in my riding that purchased, in good faith, 20 different kinds of large trucks and snowplows, et cetera, from a Quebec auction, and I believe 15 of them are still — this was last year— being stored in Quebec because of different road standards. The owner of the company was told, "Listen, if you want to drive those trucks through our province, you will have to pay for individual engineering reports saying they are safe.''
Another quirk of the system is that in some cases he was told he would have to have certain permits and there was a question of whether or not those offices were open in time for him to be able to transport something that he thought would take six to eight days, tops. It took two and a half weeks. Again, to Dr. Mintz's points, we don't know why provinces do it this way. They all cite safety, but by the same token, how can you have that many different safety standards across the country? It's not top of mind because it's literally an ounce on every Canadian shoulder. A lot of these trade barriers are not felt hard enough for governments to act.
Sen. Wallin: It's true for individuals. I had friends move from Saskatchewan to Alberta. It was the same thing. They actually ended up having to sell their Saskatchewan car and buy an Alberta car. It was quite bizarre. Anyway, thank you.
The Chair: Quite the deal if you do that, if you buy an Alberta car, and you live in Saskatchewan, you have to go through a whole thing about getting insurance, and it's just nuts. That happened to a friend of mine. His car broke down and he actually needed a new car, so he bought it in Calgary and he had one heck of a time getting insurance because it had to be done in Saskatchewan, so now you can't drive anywhere. Anyway, it's quite odd.
I have Senator Tannas.
Senator Tannas: Thank you.
Dr. Mintz, you mentioned something that some of us in Alberta have heard before: this idea of corridors, and the Australian example. I recall this was something that some of the ex-political leaders in Alberta, particularly Danielle Smith when she was leading the Wildrose Party, talked about: a need for a national corridor that would incorporate pipelines, rail, roads, electricity and fibre optics — all of the things that the country needs. This touches a little bit on what this committee is talking about. Do you think it is time that a Senate committee or somebody like that studied this idea of a national corridor? Is it a way out of our current problem?
Mr. Mintz: I think we really do need to do it. I would encourage the Senate's doing it, but let me mention that the School of Public Policy, University of Calgary, and CIRANO in Montreal, Quebec, we are doing a joint study on the northern corridor concept. The idea is to establish a nationwide corridor. When you think of the way Canada got started in 1867, we created in a sense a corridor, which was rail at that time, across the country, but at a level relatively close to the U.S. border. We then created grids going up.
We could actually think of having a corridor across the country going from B.C. through northern Alberta to the Ring of Fire in Ontario, to Quebec's northern parts, and even to Boise Bay, potentially. You could think of having a national corridor that would allow for the transportation of goods and services to tidewater, and it could be all the different mechanisms that would be allowed. Another part of this — I know this is a discussion that is going on in Ontario right now — is potentially moving more commercial rail activity out of the urban centres, which is conflicting with the transit of people. I had a long discussion about this with somebody a couple months ago. In the Toronto area right now, there is a debate where one proposal is to move commercial rail activity going through the heart of Toronto. It would be relatively expensive, but not completely out of whack, because you're doing something for a very long time. Put it more north, and at the same time develop more transit with Waterloo and Milton as areas.
A much cheaper proposal is simply to deal with the transit between the Toronto GTA and Milton, Waterloo and Kitchener instead. Now, certainly when I look at these things, especially when it comes to infrastructure, these are long-term capacity situations. There is a lot of value to looking at that. I should mention that the School of Public Policy in CIRANO will be issuing our issues paper very soon. In fact, I got a copy of the final version of it; it will be going into French translation.
We will be issuing this paper very soon. It's going to lay out a whole bunch of questions to be asked. We plan to get a number of researchers to do what academics do, which is to provide detailed analysis of these different issues. There are a number of complex issues.
When you look around the world, and it's not just Australia, but a number of countries have been putting in corridors. I met an interesting individual, a Canadian, who has been doing this around the world. Why aren't we doing this in Canada? I think it's time we wake up and smell the coffee.
Senator Tannas: The national dream 2.0, right?
Mr. Mintz: Exactly.
The Chair: Dr. Mintz and Mr. Albas, thank you very much for a very interesting session.
(The committee continued in camera.)