Inside Logistics

Ontario supports amendments to internal trade rules

Seeks to modify the Canadian Free Trade Agreement (CFTA) to allow federal, provincial and territorial governments (Parties) to independently remove restrictions to internal trade


September 6, 2019
by

TORONTO — Ontario has formally signalled its support to modify the Canadian Free Trade Agreement (CFTA) to allow federal, provincial and territorial governments (Parties) to independently remove unnecessary restrictions to internal trade. The CFTA has over 100 pages of exceptions  that distort and block the flow of trade across the country. Many of these exceptions are outdated and act as unnecessary barriers for businesses.

The CFTA is a pan-Canadian agreement between the federal government, provinces and territories. It entered into force on July 1, 2017. It requires all parties to provide non-discriminatory treatment for goods, services, workers and investments from other Canadian jurisdictions.

Under the current CFTA, each Party to the Agreement must receive written approval from all others each time they wish to remove or narrow an existing exception. By allowing Parties to liberalize their own exceptions faster, the amendment seeks to give each jurisdiction more independence and flexibility in their decision-making while reducing burdens on business.

“To compete and succeed in today’s fast-paced economy, government must move at the speed of business – that means having the ability to quickly and effectively remove unnecessary burdens and barriers for business,” said Vic Fedeli, Ontario’s Minister of Economic Development, Job Creation and Trade.

“This amendment to the CFTA will give federal, provincial and territorial partners the autonomy they need to save time, save money and honour the true intention of the Agreement.”

The proposed amendment to the CFTA contains safeguards to ensure that any modifications made to existing exceptions do not result in new barriers or restrictions for businesses from other Parties.

Ontario, Alberta and Saskatchewan continue to encourage other jurisdictions to join efforts to make Canada Open for Business and take concrete steps to further reduce or remove barriers that obstruct the flow of trade nationwide.

The CFTA applies to all government laws, regulations and other measures unless they are excluded under general and Party-specific exceptions that allow each Party to maintain certain measures that may be inconsistent with the rules of the CFTA.

In 2017, Ontario exported $144.6 billion of goods and services to other provinces and territories and imported $108.1 billion, resulting in two-way trade of $252.7 billion and a trade surplus of $36.5 billion.

In the 2018 Ontario Economic Outlook and Fiscal Review, the government promised that it would not stand in the way of a pipeline project that transports oil within Ontario’s borders. To that end, Ontario is moving forward with plans to eliminate restrictions on pipeline development in Ontario under the Canadian Free Trade Agreement that were negotiated by the previous government and is actively working with the Parties to the Agreement to implement these changes.