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Breakenridge: Tariffs should mean Canada now gets serious about opening interprovincial trade

Hopefully, this is what a true Team Canada approach can look like — not just opposing Trump, but creating a stronger Canada

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Barring some 11th-hour deal or climbdown, today marks the imposition of massive new U.S. tariffs on Canadian imports and retaliatory Canadian counter-tariffs. It is a trade war that is both unfortunate and completely unnecessary.

Alberta’s premier has taken some flack over her approach to this situation, but it was hardly unreasonable to at least make the case directly that we needn’t go down this path. If there happen to be irritants, trade or otherwise, that the Americans want addressed, we should be willing to have that conversation. Unfortunately, we seem to be dealing with a rather capricious U.S. president.

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In that sense, it’s a win and a loss for the premier. We didn’t avoid the tariffs, although we did get a concession with the lower rate on Canadian oil. But Trump’s arbitrary and aggressive approach certainly begs a response, and Smith will need to fall in line with the other first ministers.

On the other hand, though, the premier has also correctly identified our overreliance on the U.S. economy as a particular vulnerability at this pivotal moment. This awful situation is at least an opportunity to finally address that overreliance — not just by opening new markets, but by unshackling the Canadian economy.

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As Smith noted in her weekend statement, “We can no longer afford to be so heavily reliant on one primary customer. We must stop limiting our prosperity and inflicting economic wounds on ourselves.”

Hopefully, this is what a true Team Canada approach can look like — not just opposing Trump, but creating a stronger Canada. We rightly bristle at the notion of being converted into the 51st state, and so it shouldn’t be easier for a province to do business with its southern neighbour than its fellow provinces.

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Alberta has led before on the push to reduce and eliminate interprovincial trade barriers and there’s an opportunity for us to be leaders once again. One of the long-standing challenges in addressing these barriers is the inability to achieve consensus and co-ordination. No one wants to act unilaterally and, as a result, everyone waits for everyone else — and nothing happens.

That inaction comes at a considerable cost. A 2021 study by University of Calgary economists Jennifer Winter and Trevor Tombe estimated that Canada’s GDP is anywhere from 3.2 to 7.3 per cent smaller as a direct result of these internal trade costs. A report last year from the Canadian Federation of Independent Business concluded that removing these barriers could boost the Canadian economy by as much as $200 billion annually.

As noted, Alberta has previously tried to rectify this situation. Fifteen years ago, Alberta spearheaded what eventually became a free-trade agreement between the western provinces known as the New West Partnership. In 2019, then-premier Jason Kenney unilaterally gave up most of Alberta’s exemptions under the 2017 Canada Free Trade Agreement.

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There’s no guarantee that other provinces will follow suit if Alberta takes further steps. Ultimately, though, fewer trade barriers is still a net positive, and it puts the onus on Ottawa and other provinces to demonstrate that they mean what they say when they talk about the importance of removing such barriers and uniting as Canadians.

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  1. Conservative Leader Pierre Poilievre speaks during a news conference in Vancouver, on Monday, February 3, 2025.
    Poilievre says he'll tear down provincial trade barriers after U.S. tariff havoc
  2. Alberta premier Danielle Smith, left, talks with colleagues during the fall meetings of Canada's premiers, in Toronto, Monday, Dec. 16, 2024. THE CANADIAN PRESS/Nathan Denette
    Danielle Smith: How Team Canada can overcome Trump tariffs

Alberta’s public safety minister invoked an old proverb last week when discussing new measures to address border security: “The best time to plant a tree was 20 years ago, the second best time is now.” That sentiment probably applies to many of the steps we’re now taking and pondering as we scramble to respond to whatever Trump throws at us.

But it certainly applies to the issue of interprovincial trade barriers. We should have dealt with this long ago, but now is a perfect opportunity to finally take some meaningful steps.

Alberta should lead the way.

Rob Breakenridge is a Calgary-based broadcaster and writer. He can be found at?x.com/RobBreakenridge?and reached at?rob.breakenridge@gmail.com

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