Greg Quinn: Let's talk about Canada's obvious free-trade hypocrisy

The fact that Canada is essentially captured by its dairy and agricultural special interests doesn't just hurt overseas companies who want to trade there.

By: Greg Quinn

Let me say this upfront, and clearly: when it comes to international trade, Canada is protectionist to an astonishing degree whilst at the same time claiming it is a supporter of global free trade. It wants every other country to open up (and complains when they don’t, or when they stand their ground) whilst ensuring access to the Canadian market is more difficult. This is a result of federal policy, inter-provincial restrictions, and vested interests. And it is flagrantly hypocritical.

When it comes to dairy, beef and the mutual recognition of professional qualifications, for example, Canada’s claim to openness is simply a lie. Agricultural groups and businesses dominate and control the local landscape and attempts to either overcome that (or bring external companies in) have failed on many occasions over the years. This could well get worse if the Liberals agree to what the Bloc Québécois has demanded — even more dairy protections — in a desperate attempt to remain in power for a little while longer.

Some of these issues are well known to Canadians — particularly the domestic ones, or the ones that touch on national unity frictions. But I’m not sure Canadians understand how this is perceived globally, including by Canada’s allies. Readers may recall that there was a mild furore a while back when the U.K. dared to pause trade negotiations as Canada refused to move on access for British cheese. There were accusations of the U.K. not playing fair and such like.

In reality the Brits had simply had enough of Canadian posturing and demands for special access for its cherished products whilst giving nothing in return. Don’t get me wrong — I love a bit of Canadian cheese. But every now and again people should be able to have a nice British cheddar, or smelly blue cheese! British negotiators, and I knew some of them, simply concluded that Canada wasn’t interested in coming to a solution, and that their effort was better invested elsewhere. So they moved on.

There are other examples, but that’s one where I have a particular insight. Overall, I can safely say Canada’s friends have drawn some conclusions that Canadians may not find flattering. Canada is a country which claims to lead the world in areas such as human rights, democracy, and trade liberalization, punching above its weight all the while. But it falls down in many of those areas — and don’t get me started on defence. (Or, if you prefer, simply see my last essay here at The Line.)

The fact that Canada is essentially captured by its dairy and agricultural special interests doesn't just hit overseas companies who want to trade there, it hits Canadians as well. A litre of milk in the U.K. (London) costs about C$2.40. In Toronto, it costs about C$4.40. There is no good reason why that should be.

Oligarchies also impact Canadians’ quality of life in telecoms, grocery stores, TV and the internet. In April this year there was much brouhaha when it was confirmed that Canada’s federal government continues to court foreign grocery stores in an attempt to get them to come to Canada, all with the goal of increasing competition and lowering prices. This was started in the fall of 2023 when François-Philippe Champagne, minister of innovation, science and industry, started to explore the option of bringing external retailers into Canada to address the issue of food-price inflation. I doubt many would say Canada is not an expensive place to buy food. Companies from across Europe and the U.S. (including leading European discount stores and disruptors such as Aldi and Lidl) were apparently being approached and encouraged to look to open in Canada.

Champagne seems to have discovered, however, that making the case for such companies to come to Canada is difficult. Problems include: the inherent advantages the existing players have, the significant investment that would be required, and regulatory inconsistencies across provinces.

And these are clearly not problems that the federal government has much interest in. The minister’s efforts seem to be little more than federal tinkering, or frankly, an attempt to be seen to be doing something, without any real desire to upset the vested interests in Canada who are the cause of many of the problems.

I wouldn’t assume a Conservative government would be any more free-market oriented. Whilst economically you might think they would be, in many ways they are the strongest supporters of those big businesses who benefit from the system as it currently is. I would be delighted to be proven wrong about this, but one need not know too much Canadian political history to know that Tory prime ministers have been as comfortable with protectionism as Liberal ones.

Then we have interprovincial trade barriers. According to the Business Council of Alberta in a 2021 report, these barriers are tantamount to a 6.9 per cent tariff on Canadian goods. They also noted that removal of these could boost Canada’s GDP by some 3.8 per cent (or C$80 billion), increase average wages by some C$1,800 per person, and increase government revenues for social programming by some 4.4 per cent.These barriers hinder internal trade between the provinces, including the work of those companies that import goods from other countries.

A freer market, at home or globally, would not solve all the issues that exist with prices, but it would certainly increase competition and give consumers more choice. What exists at the minute is a pretence of choice.

Opening up the Canadian market would certainly benefit other countries, including my own United Kingdom, and there would be some impact on local business and producers. This is true, and acknowledged. But opening itself up to more global trade and dismantling internal trade barriers — and these are things all the politicians insist they like the sound of in theory — would be a win-win for Canadian consumers and Canadian society as a whole. Some big companies and carefully coddled special interests would be upset, but they aren’t supposed to be the ones making decisions in a democracy, or in a free market.

Finally, and not least importantly, smashing these barriers and the political culture that sustains them would also allow Canada to proudly claim to be a truly free-market economy, and mean it. Because when Canadian officials say that now, or brag about how Canada values free trade and ever-closer international ties with like-minded nations, they’re engaging in what we can politely call “spin.”

And there are other, less polite terms we could use, instead.

Greg Quinn is a former British diplomat who has served in Estonia, Ghana, Belarus, Iraq, Washington, D.C., Kazakhstan, Guyana, Suriname, The Bahamas, Canada, and Antigua and Barbuda in addition to stints in London. He now runs Aodhan Consultancy.

---

The Line is entirely reader and advertiser funded — no federal subsidy for us! If you value our work, have already subscribed, and still worry about what will happen when the conventional media finishes collapsing, please make a donation today.

---

The Line is Canada’s last, best hope for irreverent commentary. We reject bullshit. We love lively writing. Please consider supporting us by subscribing. Follow us on Twitter @the_lineca. Fight with us on Facebook. Pitch us something:  lineeditor@protonmail.com