Owls and Roosters: TILMA: Canadian Chamber of Commerce survey garners 106 responses; only 37 companies report experiencing barriers to trade within Canada

The Canadian Chamber of Commerce bills itself as “the only national business group with a membership that covers a broad spectrum of private enterprise” and “is the only non-political, not-for-profit organization with an organized grassroots business network in every single federal riding.”

The organization represents over 350 chambers, close to 70 business associations, and many corporate members. According to the Chamber “it speaks with a voice that is 170,000 businesses strong.”

In the Canada West Foundation publication Dialogues (Winter 2007), Nancy Hughes Anthony, the former President and CEO of the Canadian Chamber of Commerce, stated in her pro-TILMA article Canada Should Learn a Lesson From BC and Alberta that “Canadians are among the world’s most successful traders…But when it comes to trading across Canada…we are classic protectionists.”

“A few years ago,” said Hughes Anthony “the Canadian Chamber of Commerce conducted an information gathering exercise with its members, who represent large and small businesses in every sector and region of the country, to identify barriers to trade. In part, this was done because, too often, federal, provincial and territorial governments cite a lack of information regarding trade barriers as an excuse for inaction.”

“What our members told us is that they face a plethora of barriers,” she said.

The report in question is the 22-page Obstacles to Free Trade in Canada: A Study on Internal Trade Barriers that was released in November 2004.

Upon further investigation, however, it appears that the Chamber’s claim is largely unfounded. It seems the voice that speaks for 170,000 businesses across Canada could barely muster a hundred responses to its national survey.

The study methodology is described as follows:

“The Internal Trade Questionnaire targeted businesses operating in Canada. The questionnaire was distributed on July 17, 2004 to Canadian Chamber of Commerce corporate members, associations and local chambers that are members of the Canadian Chamber. The Canadian Chamber requested that the association and local chamber members distribute the questionnaire to their respective memberships. The questionnaire closed on September 3, 2004. Completed questionnaires were received from companies ranging in size from self-employed to over 500 employees.”

(It should be noted that the study available for download at the Chamber’s website does not include a copy of the four-page Internal Trade Questionnaire. Fortunately, one is currently still available at the Ottawa Chamber of Commerce website.)

The questionnaire is interesting in that the respondent is provided with seven examples of the types of barriers that a business might encounter. It is curious the Chamber would do this given the fact that for years the public has been led to believe that barriers are so prevalent and onerous to business that one would think companies would already be familiar with them and not require this kind of coaching to answer a survey.

At any rate, of the many thousands of businesses across Canada that the questionnaire likely reached the Chamber received just 106 responses. Of those only 37 companies (or 34.9%) said they experienced barriers to trade within Canada, seven of which said they “worked with the provincial or territorial government to resolve the barrier.”

The abysmal response to the Chamber’s questionnaire far surpasses the poor response rate the Conference Board of Canada received for the surveys it conducted for the governments of British Columbia (30.7%) and Saskatchewan (21.7%) as part of their impact assessments of TILMA for those provinces.

That so few companies could be bothered to respond to the Chamber’s national survey suggests that alleged interprovincial trade barriers are not a particularly important issue for Canadian business. It begs the question who is TILMA really serving?

Results of the Chamber’s study also show that 20 of the 37 companies that experienced barriers in another jurisdiction “accommodated the provincial or territorial requirements and proceeded to operate in the province or territory” anyway.

Furthermore, it appears that 24 of the 37 companies that experienced barriers did not provide an answer to Question #8 that asked: “In your estimation, how much do barriers between provinces or territories cost your company on a yearly basis?” This may indicate the cost was negligible and did not warrant much of a concern.

To be fair the survey did show that “over half of the companies that have encountered a trade barrier did not proceed to operate in that jurisdiction.” For some the estimated yearly cost of the barriers they encountered ranged from $1,500 to $200,000 for small companies up to $10-million or more for two businesses that reported having more than 500 employees.

Among its conclusions the Chamber stated that its questionnaire “demonstrated that the most common barriers to trade were overlapping of regulations between jurisdictions, multiple licensing requirements, and local preferences in awarding government contracts.”

While frustrating for some these areas of concern do not appear to be insurmountable and certainly would not require something as far-reaching and intrusive as TILMA. If anything the Chamber’s survey illustrates that some companies are able to work with government to resolve barriers while others choose to accommodate them and proceed to work in the jurisdiction anyway.

As Steven Shrybman of Sack Goldblatt Mitchell noted in his analysis of TILMA for the Ontario Federation of Labour:

“The overwhelming majority of government measures that are subject to TILMA have little if anything to do with inter-provincial trade, investment or labour mobility, per se. Rather, these measures, which run the gamut from environmental controls to health care insurance plans, were established to serve broad public or societal purposes and apply equally to persons or companies whatever their respective province of origin. While such measures may impact investment, trade and labour mobility, these effects are indirect or tangential to their essential purpose.”

Additionally, Kathleen Macmillan and Patrick Grady, in their report for Industry Canada and Human Resources and Social Development Canada, Inter-Provincial Barriers to Internal Trade in Goods, Services and Flows of Capital: Policy, Knowledge Gaps and Research Issue (March 31, 2007), wrote:

“There is a widespread belief, especially among members of the business community, that internal barriers to trade in goods, services and flows of capital are undermining the Canadian economy and jeopardizing the competitiveness of Canadian industry. This view has been given a thorough airing in ongoing hearings into the internal market being held by the Standing Senate Committee on Banking, Trade and Commerce. Yet there remains a scarcity of hard data and good research to substantiate the impression that barriers do, in fact, impose a significant cost on our economy.”

Regardless of that and the embarrassing results to its national survey the Chamber remains a big booster of the Trade, Investment and Labour Mobility Agreement (TILMA). A May 25, 2006, newsletter noted that it sent “a letter to Premiers Klein and Campbell congratulating them on the signing of the agreement at the 4th annual joint Alberta-British Columbia cabinet meeting in Edmonton on April 28th.”

To understand why the Chamber might find TILMA so appealing can perhaps be found in the study’s introduction that states:

“Barriers to internal trade exist due to the nature of Canadian federalism, which assigns economic and regulatory powers to federal, provincial and territorial jurisdictions. In many cases, barriers are a result of provincial jurisdictions exerting their autonomy over economic and social policies.”

TILMA would appear to deliver much of what the Chamber seems to desire and that is changing the nature of Canadian federalism by curtailing economic and regulatory powers to provincial and territorial jurisdictions and lessening their autonomy over economic and social policies. It would mean erasing borders between provinces and territories and, as former Alberta Minister of Intergovernmental Relations Gary Mar said in a June 6, 2006, speech to the Richmond Chamber of Commerce, the enforceable dispute resolution process provides “everything Canadian business asked for.”

On June 5, 2007, the Chamber issued a news release renewing its Board of directors “plea for the liberalization of trade among Canada’s provinces and territories.”

The news release went on to praise TILMA and shamelessly appeared to cite the Conference Board of Canada’s discredited claim that the trade agreement “will add $4.8 billion to the GDP and will result in the creation of 78,000 jobs between the two provinces.” The Canadian Chamber of Commerce should be ashamed.