Ryan Manucha joins Counterfactual host Julia Potter of Blake, Cassels & Graydon LLP to provide insights on domestic trade barriers. They discuss the historical roots of these restrictions, the political and economic forces driving recent reform efforts, and how leadership from both Ottawa and the provinces is shaping the future of internal free trade.
In this episode of the Counterfactual Podcast, host Julia Potter sits down with Ryan Manucha, author and expert on interprovincial trade, to unpack why Canada still struggles with domestic trade barriers. They discuss the historical roots of these restrictions, the political and economic forces driving recent reform efforts, and how leadership from both Ottawa and the provinces is shaping the future of internal free trade.
CBA Counterfactual Podcast – Transcript of Episode on Interprovincial Trade Barriers
00:29
Julia Potter
Hello and welcome to Counterfactual, the official podcast of the Canadian Bar Association's Competition Law and Foreign Investment Review section. My name is Julia Potter. I'm a partner in the Competition and Foreign Investment Group at Blake, Cassels & Graydon, and I will be your host.
00:45
Julia Potter
For this episode, I will be speaking with Ryan Manucha about interprovincial trade barriers. Ryan is a leading expert on interprovincial trade in Canada who advises governments and appears regularly in major media, including CBC news, the Globe and Mail and the National Post.
01:01
Julia Potter
His award-winning book titled “Booze, Cigarettes and Constitutional Dustups: Canada's Quest for Interprovincial Free Trade” won the Donner Prize for public policy. He is a research fellow at the C.D. Howe Institute with work featured in top legal journals and by Canada's leading think tanks.
01:17
Julia Potter
He holds a JD from Harvard and a BA in economics from Yale. And now of course we can add a guest on the Counterfactual Podcast to the bio. So welcome Ryan, and thank you so much for joining me today.
01:34
Ryan Manucha
Thank you so much for having me.
01:35
Julia Potter
Our topic today is interprovincial trade barriers. And of course you are the expert in interprovincial trade. So just as part of a background and context, can you explain what we're talking about when we discuss interprovincial trade barriers and where they even came from in the first place?
01:51
Ryan Manucha
Interprovincial trade barriers are federalism in a nutshell. You know, Canada is the world's second largest country by landmass. And yet it's one nation state. So how do you achieve this? You've got to have local control.
02:05
Ryan Manucha
You've got provincial regulatory and legislative authority under the constitution. You got to be able to regulate in light of local concerns and circumstances, the Arctic of the far North, different from the temperate climate of the far West, different from the coastal shores of the East, and then different from the, you know, the prairie plains and the Canadian shield.
02:23
Ryan Manucha
That's just topography, let alone people and climate and, you know, economies and contextual histories, right? So, you have to be able to bridge this. And part of the challenge was Canada received a constitution from a unitary state, but our nation state was filled with a bunch of provinces.
02:44
Ryan Manucha
And so how do you thread this needle? And it's kind of been one of these issues we've been punting and punting. And as economies have expanded beyond, you know, your 10 mile radius of your village or whatever to these global firms that can touch and sell to anyone on the planet in a moment's notice.
03:02
Ryan Manucha
How do we connect the two dots? And that this issue was foremost, top of mind in the Cuomo case, the famous Gerard Cuomo back in 2012, bringing his booze.
03:13
Ryan Manucha
But, you know, he's from rural New Brunswick, goes into Québec. He did this four times a year, bringing his alcohol back in the trunk of his car because he was a rational economic agent. He had the time. And he had the desire to have the cheaper booze from the Québec side of the border.
03:28
Ryan Manucha
It was in this fateful fall afternoon in October 2012 when the RCMP detained him crossing back into New Brunswick for the distinctly Canadian offense of having too much booze in his trunk. He had 12, close to 12 cases when what all he should have had was close to 12 beers.
03:42
Ryan Manucha
And when you went, you know, when you read through the case and you try to figure what the New Brunswick argument was, it was essentially like hey, this is how we've chosen to regulate alcohol. And, you know, whether or not, we're better defending against the overconsumption by the inebriated or the purchasing by minors or, you know, this as a very vital revenue source. This is how we pay for schools and roads and bridges. Who are you to tell us, you know, Supreme Court, how we should be able to self-organize.
04:06
Ryan Manucha
And so it's this constant tension between the interests of the nation state and the interests of your province, of your local jurisdiction.
04:13
Julia Potter
Right, that makes sense. And so we have seen a resurgence in discussions around interprovincial trade barriers, and they've been at the forefront of the national conversation, particularly earlier this year. Can you tell us why that is?
04:26
Ryan Manucha
It's such an interesting snapshot. And also just like, if you look into the history of internal trade, history just repeats itself. Trump 2.0 was an external catalyst for us to get our house in order.
04:38
Ryan Manucha
And this isn't the first time this has happened. The fathers of confederation at 1867 were around the, you know, between 50 and 55 years of age. Twice in their adulthoods,
04:48
Ryan Manucha
They'd had their economic orders upended by a foreign trading partner. First by the Brits in the 1840s when they repealed the imperial preferences for Canadian goods. So it made it harder for Canadian lumber and wheat to get into the UK market.
05:02
Ryan Manucha
So, they had to compete on a bit more of an even playing field. And then once so by the US when they canceled an early US Canada free trade agreement in 1866, just before Confederation. Both events really forming the worldviews of the fathers’ Confederation in part. That's not the only reason for Confederation.
05:19
Ryan Manucha
But them saying we need a robust internal market for us to be able to weather the vagaries of these foreign trading partners. And we saw this once again, in a way that none of us have seen in our lifetimes with Trump 2.0.
05:31
Ryan Manucha
And he's fundamentally reshaped the trading system, right? North American trade. And he singled out Canada right at the beginning, but it takes a catalyst for this to happen. And, you know, in ordinary times,
05:44
Ryan Manucha
It would be baffling for a politician to stand up and say, let's focus on the 40 million person economy and not the 340 million person behemoth south of the border, the most vibrant economy on the planet.
05:55
Julia Potter
Right. And as you discuss in your book, discussions of breaking down these barriers was meant to be a beneficial outcome of confederation. We still have the barriers today. And so, as you mentioned, there's a new catalyst that's driving these conversations. What is different this time around, if there's anything different this time around?
06:15
Ryan Manucha
Yeah, it's so interesting to have seen what took place like and I have to remind myself, I'm in the weeds on this file every day. So sometimes I need to take a step back and say, where have we come? Going to sleep New Year's Eve 2024,
06:26
Ryan Manucha
Even after the Trump election, I never, as someone who focuses his time on internal trade, would never have predicted how far we've moved this file.
06:34
Ryan Manucha
You know, we're almost nine months into 2025. Like for a file that's, you know, sort of been an issue, gone are the days of, you know, customs agents at the border of Upper and Lower Canada monitoring the passage of goods flowing along the St. Lawrence, right?
06:49
Ryan Manucha
What we're talking about, just for the listeners here, what we're talking about with internal trade barriers isn't that. We're talking about the regulatory disharmony that occurs in a federation when you don't have provinces cooperating with one another, whether it be intentional for creating fiefdoms or unintentional, just path dependency. And I'll give you an example of this. I realize I’m getting, I think this is helpful for this question, though.
07:12
Ryan Manucha
An example of this, construction codes. Starting in the early 1900s, construction codes started ramping up in very different directions across the country. Why did this happen? Local floods, fires, accidents driving local policy change, driving insurers to demand different things from the insured, and driving construction codes in different directions.
07:31
Ryan Manucha
Suddenly you had ecosystems and community policy communities and regulatory communities within provinces who had jurisdiction over this idea of construction codes, building codes. And so suddenly when you want to unwind that and put the genie back in the bottle and create alignment across the provinces, it takes time and work.
07:48
Ryan Manucha
One, it's changing the way of doing things. And two, you know, honestly, petty fiefdoms, people sort of saying, well, that's my jurisdiction. What are you talking about? and three, like, how do you bridge that alignment and create comfort? We’re going to get into that later in the conversation, creating comfort.
08:04
Ryan Manucha
What's different here was that you had politicians like Tim Houston and Doug Ford and others who stood up and activated from the center.
08:14
Ryan Manucha
The necessary ingredient on internal trade is leadership from first ministers. That is, without a doubt, without that, you cannot have it. Jason Kenney, and you need it from a collection of them. Jason Kenney tried to go it alone and back in 2021, and he released the Labour Mobility Act, the farthest reaching piece of legislation for internal trade the country has ever seen.
08:34
Ryan Manucha
But he was the only one to do so. And no other province followed suit. And so, yes, you had leadership from the center there, but it didn't go pan-Canadian. You needed this catalyst, Trump, to help generate continued momentum. So in many ways, Alberta's forgotten.
08:47
Ryan Manucha
Jason Kenney is forgotten as the individual who really sort of kickstarted a new wave of legislating our way to internal trade. But that is supremely important. And so, looking forward to the next three, six, 10, 12 months on this file,
09:00
Ryan Manucha
The thing that cannot evaporate is leadership. And we just saw, you know, not too long ago, Minister Freeland sort of exit from government, meaning we no longer have a dedicated internal trade minister in the same way.
09:13
Ryan Manucha
And so hoping that we can regain that sort of level of visibility and that folks not only at the first premier's, first minister's level, but also their internal trade appointee on the cabinet is also similarly invigorated.
09:30
Julia Potter
Yes, you've mentioned a few of the provinces. How is that going across all of the provinces?
09:37
Ryan Manucha
There's certainly been competing interests, right? And you can kind of see it when provinces sort of release things and then maybe sort of walk things back a little bit. For example, the LCBO and the SAQ and the liquor in Québec and Ontario really sort of, I think is a big factor in the pace at which we can get direct to consumer for alcohol.
09:58
Ryan Manucha
I know that's not going to move the needle, but this is a sort of an... Canadians, like for whatever reason, like the barometer of how we can trade booze seems to be the barometer of how we perceive internal trade to some extent. And I think that's not necessarily... That's not very helpful or very accurate. Just in my conversations with many, many people, that seems to be how they connect the dots.
10:15
Ryan Manucha
And so when you say, oh, by May 2026, we're going to have a framework for direct-to-consumer alcohol. You know, it's keeping feet to the fire, making sure this comes out. There's the policy issue about markups.
10:28
Ryan Manucha
It's not just the simple act of being able to buy and sell. It's about where can I extract my rents, you know, my billions in profits that go towards paying for my roads and schools. How do I make sure I don't see seepage like that? And so, I think you have Nova Scotia, who's setting up an excellent framework. So, you have some provinces who are a little bit more, and Manitoba's already come to the table with direct to consumer for alcohol.
10:48
Ryan Manucha
We're getting into the weeds on some files here. But I think Canadians are ready for in the weeds on internal trade. We're tired of the 800 word cover notes, Globe & Mail op-eds. Manitoba's already been a direct-to-consumer for ages and BC and Alberta have had a direct-to-consumer agreement for years at this point. So it's about the incremental work of pulling everyone forward. And I think a bigger question sort of in a federation, do we all have to be doing things on a pan-Canadian basis? Or if you get a coalition of the willing, like we have seen between some standout provinces, maybe they just go keep going further and further forward and let them reap the benefits of invigorated economies.
11:25
Julia Potter
Yeah, that's very interesting. And so what are the impacts of the barriers on the Canadian economy? We talked about how they are there. What is the case for removing them?
11:35
Ryan Manucha
I co-authored a piece with Trevor Tombe, Professor Trevor Tombe at the University of Calgary, where we estimated up to 200 billion GDP unlock for the Canadian economy, 7.9% growth to the GDP, annualized, annual, right? So you think about the compounding effect of that.
11:49
Ryan Manucha
And that was in a paper we released a couple years ago. There's been some feedback. There's been some parties who have come forward with different numbers who critique the methods. Whether it's 200, 150, I think there's case to say that the model doesn't account for a lot. That it could be 250, 300.
12:03
Ryan Manucha
It's like throwing paint on the wall and it's educated paint. But I think all of us know intuitively what, you know, things like NAFTA have done for the Canadian economy, and applying that same logic to the internal economy.
12:14
Ryan Manucha
Sure, we do not have the consumer base of China. Like we can't just say, oh, we've got a billion people. If we unlock domestic trade, we have a billion consumers we can sort of leverage. No, we have 40 million consumers. What we're trying to drive towards with internal trade is creating best in class, fostering prosperity and competitiveness.
12:31
Ryan Manucha
I think this is something that dovetails very well with what you and your team and your community does. Like internal trade is one stool in the leg of prosperity in Canada, one being one big one being competition.
12:41
Ryan Manucha
in Canada, but I think internal trade is a derivative of that, right? It's like we've constitutionally enshrined monopolies in the form of provincial jurisdiction under the constitution.
12:52
Ryan Manucha
Now it's about ensuring that provinces are still competing with one another and collaborating to ensure best in class companies breed, that we have global champions able to come out of Canada rather than petty fiefdoms holding, we want
13:04
Ryan Manucha
To make this more concrete, we've got different definitions of sunrise and sunset for truckers. We've got truckers having to stop at borders and change their truck configurations because the rules don't match. Different max weights for heavy-duty tow trucks.
13:16
Ryan Manucha
You know, we’ve got different definitions of high-visibility safety apparel. And this is, you know, and you can steel man the other side a lot of these regulatory pieces, right? But what I'm saying is that a lot of stuff here that is fair game for us to rationalize and streamline.
13:29
Ryan Manucha
And I think Michael Sabia and the federal government is part of that ethos. And so internal trade fits nicely with that.
13:35
Julia Potter
That’s very helpful and some useful examples. And you mentioned off the top that the reason for these trade barriers were to protect local interests and there were local considerations. If you are looking to the other side of the argument, why would anybody want to keep the trade barriers? What case are they making for the other side?
13:53
Ryan Manucha
Let me give some other examples just to add some colour and then I'll jump into that one. Right, so we talked about diverging construction codes.
13:59
Ryan Manucha
We've got clashing rules and regs on trucking costing us 1.6 billion dollars a year. And again, that’s talking about, you know, different max sizes for semi trailers, springtime, weight, thaw restrictions, different definitions of sunrise, sunset.
14:13
Ryan Manucha
But some other examples, we've got varying electrical codes. We've got varying performance. How we schedule non-prescription drugs.
14:22
Ryan Manucha
Internal trade barriers are costs on account of an internal frontier, right? And some, like the booze in Cuomo in New Brunswick. Hey, New Brunswick self-organizes the way it wants to.
14:32
Ryan Manucha
We've got to give room for them to say we want booze to be bought from our stores so that our revenue goes towards our mandates, right? We don't want any tax seepage, zero tax seepage, and we're going to maximal in on that. And then we've got instances where you say, perfect example. So labour mobility is huge, right?
14:49
Ryan Manucha
And, you know, who's pushing back against labour mobility? It's not the individual workers per se. It's their leadership groups, right? It's their leadership groups.
14:58
Ryan Manucha
So, a perfect example in the bill that came before Nova Scotia legislature on internal trade. It was publicly released by the, you know, the Professional Engineers Association of Nova Scotia, hey, 26% of our revenue comes from out of province practitioners maintaining a Nova Scotia engineering license, $900,000 a year.
15:18
Ryan Manucha
So, like on a very short term basis, that's money to, you know, keep the lights on to pay salaries, but also enforce and ensure that engineers are compliant, right? Like I get like, that’s an immediate potential existential threat to their ability to function properly, right? But then you realize that internal trade, internal labour mobility does not mean the evisceration of your funding sources.
15:38
Ryan Manucha
You can still demand registration revenue. That is not off the table. So once you get the money argument out of the way, what's left? It's usually this public interest argument. There's already 170,000 real estate agents in Ontario.
15:51
Ryan Manucha
We don't need another coming in with their nefarious, bad. We don't need a bad actor coming in. We want to make sure that they're up to snuff. It's like, well, you already heard it. I think part of it is like not making sure there's another one, 170,001 real estate agents, right? There's like a lot of, there’s perhaps a glut and that's part of a market issue.
16:06
Ryan Manucha
But to hide behind the consumer protection argument. That’s, you can, again, launch the consumer protection argument, but you've got to tether it to the gap. If real estate agents in Manitoba are fundamentally trained differently than real estate agents in Ontario, that is fine.
16:22
Ryan Manucha
I'm not saying that they aren't, but you've got to explain that gap. You've got to reason it, and we've got to create the bridging mechanism that is the least invasive. It's like the Oakes test, you know, it's got to be proportionate to the gap that you have between two jurisdictions. That's what I'm calling for.
16:40
Ryan Manucha
I'm not saying it’s, you know, we're freewheeling and, there's no critical insight into who's coming in from another province, right? But I also ask you this, like I go break my leg in Jasper.
16:53
Ryan Manucha
I don't ask for a medevac back to Ontario. Like I'm going to trust a doctor out there. There's something, but the fact that we're all governed by the same constitution, the same principles of common law apply to us wherever we are. When, if we want to launch a claim in court, that binds us in a way that international trade analogies don't map onto
17:10
Julia Potter
Yeah, that that makes sense. There is quite a difference between certain industries and what is federal versus what is provincial. And there is quite a distinction there for sure. So, if we turn to the recent developments on removing trade barriers, as a Prime Minister, Carney has committed to eliminate trade barriers, including through the passage of the One Canadian Economy Act, which he has said will remove trade barriers. Can you help us understand what the federal government is trying to do and how it's trying to achieve those goals?
17:37
Ryan Manucha
Yeah, the federal government and a number of other provincial governments. So there's been a lot that's happened.
17:42
Ryan Manucha
So let's unpack it. I'll kind of tick through it. The first one I'd say is legislation and labour mobility like we'll call it because of the audience of this podcast is sort of in the weeds on law. Look, it's mutual recognition legislation, you know
17:56
Ryan Manucha
The basic premise of it, if the good, service or labour was certified in another province, that's good enough. If it was certified for sale and use in province A, it's good enough for province B.
18:07
Ryan Manucha
It's kind of like streamlining, deduplication, and it's allowing for free flow. A perfect example, you've got a small, and we're talking about, who are we really thinking about here? Small, medium-sized businesses, individual workers, right?
18:19
Ryan Manucha
If you're a big business, you have the cash flow and the resources to deal with regulatory disharmony.
18:24
Ryan Manucha
In fact, that's probably a competitive moat for you. I'll give you a perfect example, Julia. So right now, there's the lack of a, and this is where we get into murky definitions about internal trade barriers, but I think a lot is more fair game than people give it credit for.
18:36
Ryan Manucha
There is a lack of a federal excise tax stamp for cannabis products and physical stamps.
18:42
Ryan Manucha
So if I'm a manufacturer in Ontario, I have to affix a stamp for the province of destination for that good. And as normally happens in the course of ordinary business,
18:53
Ryan Manucha
You get order cancellations, you get surge orders from a different province. So if I have a bundle ready to go to Nova Scotia to restock and all of a sudden they cancel, they trim, or I get a surge in purchasing from Manitoba, I have to have a group of folks whose job is to scrape the stamp off, glue it back together, show it to a CRA auditor and burn it, right?
19:13
Ryan Manucha
And who do you think that sort of system helps. It's a larger enterprise, right, who's got a competitive advantage compared to a smaller group that can't, that really hurts, right?
19:23
Ryan Manucha
So the genesis of the legislation is mutual recognition. This has been battle-tested 70 years of experience between the EU and Australia.
19:32
Ryan Manucha
Australia went through this in the 90s after they learned from the EU in the late 70s and 80s. Hey, harmonization would love to get there. Really hard to get there, right? It's nice to be on common platforms. It is very hard for the reasons we talked about at the beginning. Turf wars, jurisdiction, petty petty, you know, personal, honestly, a lot of like, there's a lot of personalities that get involved and there's a lot of line ministries that got to get aligned. It's easier to start off by saying, hey, we're going to recognize the way you do it.
19:58
Ryan Manucha
What is that underpinned by? Trust. You need your regulators to be going and to be in communication, exchanging information with them and understanding how they do it. I'll give an example. There's a type of pressure system, like it's a physical pressure good that was for a while only allowed into PEI because the regulator from PEI was the only one to go over to Europe to say, hey, I've seen it. I understand it. OK, it's good enough for us.
20:22
Ryan Manucha
versus the way that it's done in other provinces and there's the degrees of comfort. You need, if you're a social worker, if you're the college of social workers in Ontario and you reject an incoming Albertan social worker you like, we want, if you're gonna reject, you've got to engage with how Alberta certifies.
20:39
Ryan Manucha
and you're gonna have to understand why they certify the way they do, what the gap is, write it out, you know, reason giving notifications, giving those are the hallmarks of a good mutual recognition law, and that bridges the divide.
20:51
Ryan Manucha
And then over time, this is what happened in Australia, over the first five years of Australia implementing mutual recognition, 20 occupations went to a national licensing standard because these regulators were in such fruitful conversations with one another.
21:05
Ryan Manucha
They understand their differences and they honestly get tired of the friction. They say, OK, I think we can get to a common platform here. And I'll tell you on the Australian one, too, within the first two years, 15,000 Australians engaged in that apparatus to get to the other side of an Australian border.
21:20
Ryan Manucha
So what we have right now is an evolving ecosystem of mutual recognition legislation, forcing functions by governments on their regulatory bodies, and presumably their colleges, to be time bound and how long it takes for them to review and revert on an application from incoming labour. I think labour is the chief mischief with these. I mean, goods are there too, but let's focus on labour because I think Canada is very much a services economy and I think that's something that we get a lot of fiefdoms coming out of, right? The college system, right?
21:53
Ryan Manucha
And there we've got another tension between labour and the interests of prosperity.
21:59
Ryan Manucha
Right, you can go too far in one direction in breaking down the rights of labour to self-organize and establish rules and protections and systems. But you also have to counterbalance that with a thriving competitive domestic economy. So it's very careful but mutual recognition has been shown to work abroad and that's what we're domesticating internally and takes time. You got it, you know as much as groups might say they're all for internal trade liberalization once you get into it they push back pretty hard right and it’s, you know, that I'm speaking more to some of the colleges who may not have their members interested. Their members may love the idea of being able to mobilize and
22:33
Ryan Manucha
easily take on a contract or move. But it's a certain suite where it's a little bit more difficult to get them to rally because that's kind of their mandate, right? To protect that sleeve.
22:45
Ryan Manucha
So legislation has been one. And then I'm going to talk about one more thing on this question, because you've just to recap your best, what's been going on and what Carney has done. So Carney's government introduced Bill C-5, half of it being the internal trade piece, the other half of it being the major projects office.
22:59
Ryan Manucha
That's your project office, is very fundamental, but I think I’m putting that to the side for now.
23:03
Ryan Manucha
We're talking about the internal trade stuff. The other thing they've done is remove exceptions from this Canadian Free Trade Agreement. I personally view those as a little bit more performative, right? Like, I don't think that they drive a whole lot of change. One of the exceptions that was removed was, you know, the fact that Canada Post has a monopoly over the delivery of letters. Like, that's not something that, you know, Ontario is jumping up to do.
23:22
Ryan Manucha
Some of it, you know again, the question is, you remove the exception, but did you remove the underlying policy that you were protecting with that exception? Often not. So it's almost what they're doing is get rid of the exception and then invite an internal trade lawsuit under the Canadian Free Trade Agreement.
23:39
Ryan Manucha
And for reasons we can get into, it is politically fraught for Ontario to take Alberta or Alberta to take Manitoba to internal trade court. So it's kind of honestly, in my mind, a little bit of a bluff, right?
23:51
Ryan Manucha
or not bluff, but, you know, it's a calculated bet that no one's going to take them to the internal trade court with the removal of the exception.
23:58
Julia Potter
Yeah, so effectively removing an exception creates a pathway to bring a court case, but that doesn't necessarily address the will, anybody will bring that court case, anybody want to bring that court case, it does take away a barrier in a sense, but not necessarily the underlying reason that it's not a…
24:14
Ryan Manucha
And just to be clear, when we talk about court case, we mean a court case under the Canadian Free Trade Agreement, like it's a special venue. And I've researched and written on just how the number of flaws with this internal trade court, the deck stacked against an applicant or a claimant.
24:30
Ryan Manucha
So they're saying not only come and launch a lawsuit against me, but oh, by the way, the venue that you're coming to, you know, there's some issues for you that you're going to realize once you get there. So that's why and this is to say, I've advocated for reforms to this internal trade court. It's called the dispute resolution mechanism modeled a little bit after the WTO (World Trade Organization).
24:49
Ryan Manucha
But putting that to the side, it's a risk calculated bet. So that's why I say and removal of exceptions is a little bit you know, it can be a little bit smoke and mirrors. And then the third thing is the Canadian Free Trade Agreement itself.
25:00
Ryan Manucha
It's a political agreement and we battle-tested the heck out of it for the past nine months. And specifically, this institution under the Canadian Free Trade Agreement called the regulatory cooperation table.
25:13
Ryan Manucha
It's where regulators from across the country get together and are hashing out things like trucking, things like electrical codes, things like construction codes. That's the, you know, the subject matter expert table.
25:24
Ryan Manucha
And so that has been battle tested. And we've also seen some shortcomings there. So I think the next six to eight to 12 months is understanding the strain we put our own system under and learning from it to strengthen for go forward.
25:37
Ryan Manucha
But Carney specifically, and I have to give them credit, right? Like we were not moving on trucking. Like as late as like September of last year, there was this announcement, hey, we're going to come out with a trucking pilot project to, you know, tackle some of those trucking regulations that I kind of have spoken to already.
25:55
Ryan Manucha
Nothing was moving fast enough. So to our credit, Freeland decided, all right, trucking regulators, we're locking you in a room for two days in Toronto July, in July 15th, 16th, come out of there with something to show.
26:07
Ryan Manucha
And, you know, that will be in the details. We saw a lot of movement from some provinces. I will shout out to Nova Scotia for its movement on trucking liberalization. We're inching forward. It is tough. It is tough.
26:19
Ryan Manucha
But that's what you need. And you need someone like Freeland and, you know, she won't be there anymore. Saying, come out of this with something. I have high expectations for you.
26:27
Julia Potter
Yeah, that's very interesting from the federal standpoint. You mentioned Nova Scotia, but what are the provincial governments doing on their end to reduce inter-provincial trade barriers and how are those efforts going in comparison?
26:38
Ryan Manucha
There's been some great legislation launched by most provinces, some more ambitious than others. And some, I'm still waiting to see how far they go.
26:48
Ryan Manucha
For example, New Brunswick's legislation on labour mobility has the potential, really devil's going to be in the details on the regs, to be some very ambitious, where they introduced the Australian concept.
27:00
Ryan Manucha
And again, I have to say, I have to couch it with, I don't know yet, because I haven't seen it in full form, where they introduced this idea of deemed recognition, meaning I come in as a licensed occupational therapist from Ontario to New Brunswick. I deposit the fee, $100 fee or whatever, my application.
27:17
Ryan Manucha
Once they acknowledge receipt of my materials, I am then deemed licensed to practice as an occupational therapist. And they then have like a 30-day window to review my application, give me a final determination.
27:30
Ryan Manucha
That is pushing the envelope. We have Ontario, which is also, they've done something different where they said, We're going to have an accelerated pathway, 10 business days.
27:41
Ryan Manucha
You come in, we'll give you an answer within 10 business days. And, but it'll only be valid for six months. So that's for 10, that's it. But so there's, we're getting, we're getting some problems coming out with very interesting things. We have Alberta who promises a 20 day turnaround plus reasons for why they reject you or curtail your license if that ends up happening.
28:02
Ryan Manucha
So we're, so you know, part of me is like, I'm a federalist, like I enjoy the lab, the labs of the provinces to create very creative legislation. And the reason I'm harping on legislation by the provinces is because you need political centers to be driving that forward at these points in time.
28:18
Ryan Manucha
And that's what I've been seeing a lot of, right? I'm seeing that they, the provinces started the year, they aligned on 30 day turnaround time for the review of incoming labour applications.
28:29
Ryan Manucha
I think it could be way more ambitious than 30 days. But having 30 days on the table is miles ahead of where we were again, New Year's Eve 2024. So things like that, I'm hopeful, but it's incremental.
28:40
Ryan Manucha
You know, things, mutual recognition on goods, right? For a while, I thought that out, yes, I go eat a roast beef sandwich in Montreal. I don't ask if that beef came from a provincially licensed or a federally licensed abattoir.
28:54
Ryan Manucha
And yet that makes all the difference whether or not that roast beef can come to the other side of the border in Cornwall, Ontario for a roast beef sandwich.
29:00
Ryan Manucha
So, you know, so where there's this retreat on bringing in meat and food from the mutual recognition agreement on goods. So there's been some advancements and then some pair backs.
29:12
Ryan Manucha
So, you know, I'm hopeful, but I'm also mindful that there, I have seen some, I'll call it retreats, to date. And I'm just mindful of that, don't want to give anyone early premature credit is what I'm doing.
29:24
Julia Potter
Of course. So, and I think you've alluded to this many times during this discussion, but, you've said before in other interviews and work that you know eliminating these barriers that exist is not simple. It's going to involve, I think there's a quote from you here that's changing the way that everyone approaches the concept of regulation and risk. And you've already discussed a little bit here about sticking points on getting rid of some of these trade barriers, but can you expand on that a little bit more?
29:51
Ryan Manucha
And I would believe that is probably something that features through and in the world of like more pure play competition as well, is the idea of the consumer interest, right?
30:01
Ryan Manucha
And how far, and the public interest, and how far can you take the protection argument to a point where you're actually harming the prosperity, like the calibration's off, right?
30:12
Ryan Manucha
When I buy a car in BC and I take it over to Alberta, do I need to get a second emissions test? Like when I, again, with that example, like with the roast beef from a provincially licensed abattoir, right? Either we're acknowledging that Québec could be on the brink of some sort of outbreak or there's something that we don't understand about how abattoirs work and you know we've got to sort that one out.
30:32
Ryan Manucha
It is never wrong, no one ever gets fired for maintaining or ratcheting up regs, right? Especially if there's been some sort of disaster or some accident. But at the same time, those same regs are what hinder us, right?
30:43
Ryan Manucha
And you know I think we're gonna get into this as well a little bit, but Industrial policy, right? I was just at this conference where the premier of Northwest Territories said, hey, you know what? Internal trade is great, but in the Northwest Territories, population of 40,000 people, one of the poorest province one of the poorest jurisdictions in Canada, hey, when there's an engineering project or there's sort of a project requiring, you know, firms to bid,
31:06
Ryan Manucha
Yeah, the Alberta firms could come up and swamp us. We want to make sure that there are contracts available for, you know, a Northwest Territories firm and its people to earn income from provincial projects.
31:19
Ryan Manucha
And so right there, you have an immediate tension between like some sort of industrial policy in the interests of the people of Northwest Territories and the idea of breaking down trade barriers and allowing for bidders from Alberta to come up and bid on those same projects, right?
31:31
Ryan Manucha
And so this is why it's so messy in a federation. And maybe you do have to have special carve outs and considerations, right?
321:37
Ryan Manucha
The North is different, right? I think we can say we can acknowledge that. And so maybe we've got to treat it differently when it comes to internal free trade. How far do we allow that argument to go? Who's on the hook for liberalization?
31:48
Ryan Manucha
Right. There's no one answer. Your version of federalism in Canada may be different from mine. So there's no one answer to this. What I'm about is tinkering, it’s not tinkering, It's more than tinkering. It's taking a look at the regulation and the duplication and the way that we govern ourselves
32:03
Ryan Manucha
on the abattoir, the roast beef example, maybe there's an exemption for small abattoirs in its cabins, like under the U.S. Farm Bill out of the early 2000s, right? Acknowledging that interstate trade and meat, yes, there's we need to balance security and safety with the ability for small operators to be able to part of a vibrant and domestic ecosystem and in the trade of goods and food.
32:21
Ryan Manucha
Like how can we accomplish everything and at once? You know, there's limits in resources and availability and all of that stuff. It's trying to bridge that.
32:32
Julia Potter
Yeah, I mean, and you've mentioned Australia and there's other examples of other places that are presumably tackled similar concerns, issues, how to protect certain populations or certain groups within the broader country. Are there any lessons to be learned from them on how to manage those different goals that we're trying to accomplish?
332:54
Ryan Manucha
Yeah, if there's a massive lesson we can learn on the way that we're trying to legislate our way to internal free trade. Let's remind ourselves because you've got a very educated audience here so we can get into the weeds in the Constitution, section 121 of the Constitution.
33:07
Ryan Manucha
Sort of, if you look at it very literally all goods and manufacturers, it's essentially suggesting it's a free trade clause, right? When we rewind the clock, what was going on back in the day in 1867? The colonies were deriving a ton of their revenue from intercolonial and, you know, international trade, right? That was what was supplying their ability to provide services.
33:27
Ryan Manucha
In the 1910s, you suddenly had the introduction of the Income Tax Act, which allowed governments more sophisticated ways to raise revenue without needing to do it on taxation and trade. Now we've got the emergence of the administrative and the regulatory state, right?
33:41
Ryan Manucha
And where you have this balance of provinces trying to do so in the interest of their own. So what did Australia do, right? Australia has this has more of a heritage.
33:49
Ryan Manucha
I've talked about how Canada's provinces and even the federal government have gone down different paths to implement mutual recognition. And I'll give you one crystal example. We don't have a uniform definition yet on what equivalent means. What is an equivalent dental hygienist from Manitoba mean to Ontario? Like, what is the test for equivalency that our regulatory bodies, that our colleges, that our adjudicators are meant to be administering?
34:15
Ryan Manucha
There's no clarity. And actually, the federal legislation doesn't even use the word equivalent. They use comparable, comparable occupations, essentially. Like compare, so is a doctor or a nurse from New Brunswick comparable?
34:31
Ryan Manucha
To that, recognized by the federal government, it's a little, the trade barriers sitting in the federal government's house are a little bit more nuanced for obvious reasons. But, you know, even using the word equivalent, the most restrictive way that governments can get involved is by starting to say, okay, yeah, you can come in, but you need to take an equivalency test.
34:48
Ryan Manucha
You need to take an aptitude test. You need to shadow someone for a year. You need to go back to school. That is the most extreme version of admitting someone in, right? The least extreme version, you know, it's a gradient, right? And that's why internal trade is so tricky because that's one version. There's another version where you have asterisk next to your name and you've got to shadow someone for six months. Then there's like the full free and clear license after a period of 30 days. Like that's a whole gradient right there of admittance of foreign, of out-of-province qualified labour.
35:18
Ryan Manucha
And when you don't have the same word for equivalent and the same framework to understand equivalent across provinces, that exercise is going to go in a bajillion directions. So in Australia in 19, they released their own mutual recognition legislation.
35:33
Ryan Manucha
They have states there. States either gave the powers, uploaded the powers to the Commonwealth to pass legislation for them or enacted mirroring legislation.
365:44
Ryan Manucha
In the 30 some odd years since then, they have understood a real need to amend this legislation over time. Now, Canada is already starting at a place where each province is enacting their own legislation. It's fitting within their home legislation in very different ways. And then you're going to introduce this idea that they're all going to get amended over the next 30 years in different ways, too?
36:05
Ryan Manucha
And so, what I think that Australia instructs us is that you need a central government and you need a leadership government. Quite frankly, it's going to be like an Ontario who reigns in the variability that we're seeing.
36:17
Ryan Manucha
And I, you know, Canadians became very familiar with seeing provincial leaders standing as if they were leaders of foreign states with one another, inking trade MOUs, memorandums of understanding with one another, in big photo ops throughout the course of summer 2025. You know, the “elbows up” environment fires you up, you're excited, great, we're seeing uniformity in a way, or you know, alignment in a way we've never seen before. But you need it more than an MOU, right? And in Australia, you had New South Wales, which is the Ontario equivalent leading.
36:48
Ryan Manucha
And you need Ontario, I think, in Canada's case, to be a big champion for reining in the variability here. In some provinces, internal trade is usually one person or a very small group of people. And they're also tasked with a bunch of other files, right? And some provinces in the federal government have teams of folks dedicated to internal trade. So, there's this resource and capacity building discrepancy that is also hindering a little bit of the progress forward.
37:18
Ryan Manucha
So I think it's like recognizing reality, recognizing that you don't necessarily always want a central government berating you. But I also think that you could see a central government stepping up and conditioning transfer payments on alignment, on internal trade objectives. Saying, hey, yeah, well, you know, in the interest of the Federation, we also need you to like work on this, this, you know, your labour mobility needs to be tightened up. We're seeing some poor results coming out of there. Let's get going. I don't think that should be off the table.
37:42
Julia Potter
Yes, and I think that leads nicely into the looking forward. I won't ask you to predict what's going on 30 years from now, but maybe in just the next few, as for about three to five year window. What do you see as really what the ideal outcome would be, on the trajectory we're headed, given all the recent push to reduce the trade barriers? And then what do you see as what the most likely outcome will be? And if those differ, what's accounting for that? Where would we have gone wrong?
38:12
Ryan Manucha
The most ideal outcome is that we have aligned our legislation. This is like pie in the sky, right? Julia, this is stuff like, okay, don't hold me to this. We've created alignment amongst the net new mutual recognition laws that have been released over the past few months and will come.
38:31
Ryan Manucha
Hopefully we get something... Yeah, so we create alignment on what that looks like. Model legislation. I think we need model, you know, we have model legislation on, I mean, you can tell me this better than anyone, on a whole host of things.
38:44
Ryan Manucha
You know, like we have like a committee that can sort of help understand, well, what is the pie in sky version of this? And what can we, so that'll take some time. The second most important thing is the machinery on government.
38:55
Ryan Manucha
It actually dovetails very neatly with Commissioner Boswell's perspective on whole of government reform. Machinery of pan-Canadian collaboration on regulatory streamlining.
39:06
Ryan Manucha
Again, you have a constitution which totally permits provinces to essentially do what they really want to do in the interests of regulating in light of local circumstances. But Canada's provinces also came together in the 90s and created our first internal trade agreement, the Agreement on Internal Trade, aptly put, because they said, hey, let's tie our hands behind our backs for the interests of prosperity of the nation state.
39:30
Ryan Manucha
and to be a competitive economy moving forward, right? We can destroy ourselves in internal and destructive and unhealthy competition internally, or we can try to build ourselves up into being better versions of ourselves, right? You know, Ontario alone could see its GDP boost by 2% on rationalization, unilaterally on internal trade barriers. That's 4% for Nova Scotia, up to 8% for Nova Scotia if other provinces align.
39:57
Ryan Manucha
We've seen other times in Canadian history where like Western provinces went farther than the Canadian, the pan-Canadian approach because they were fed up of being held back. So it was, you know, first Alberta and BC and then Saskatchewan and Manitoba joined on this new West partnership trade agreement that was more ambitious than the Canadian free trade agreement. And Professor Trevor Tombe’s research routinely shows that there are benefits to those provinces that, you know, reform even on a unitary basis.
40:27
Ryan Manucha
So this, the machinery, how do we ensure that the deputy minister and the ADM level within government are at the tables they need because they're the ones who get things across, who get shit done. Because before Trump, you had, you did not have sufficiently senior officials at pan-Canadian internal trade tables able to make the decisions. They didn't have the connectivity with their home governments.
40:54
Ryan Manucha
They didn't have the experience they needed to be able to rationalize on change. And there was no prerogative to do so because you didn't have first ministers or anyone in them is in the cabinet berating them for performance. So I would say it's the rationalization of legislation and it's
41:09
Ryan Manucha
And it's the machinery of government. Hey, pie in the sky. Those are the two things I would emphasize. And then a third thing is this internal trade court. You know, this is a podcast for lawyers. Internal trade court needs to be made more accessible to workers and small businesses. This is the only disciplining mechanism by the market to the commitments under the Canadian Free Trade Agreement. And if you can't access it, no government is going to be held account.
41:30
Ryan Manucha
And, you know, fine. If we want an ecosystem where it's sort of we trust, I think it's in a very important voice, forcing function and means of it of creating legitimacy for the Canadian Free Trade Agreement. Without this internal trade court, what is disciplining its members, our provinces and territories and federal government?
41:51
Ryan Manucha
What is actually going to come out? I think we're going to get, like, we're going to go realistically some percent of the way in each of those three. We're going to get some percent of the way on legislation, rationalization.
42:03
Ryan Manucha
We're going to get some percent of the way on reimagining the machinery of pan-Canadian regulatory collaboration. And we're gonna get some of the way on internal trade court reform. I'm least hopeful for the internal trade reform because provinces do not want claims made against them.
42:19
Ryan Manucha
They don't want to be easier to launch a claim against them. So, they have very much an incentive to not create an apparatus that's going to hold them to account. So, I'm least hopeful for that third one. But the first two, I'm more hopeful for.
42:31
Julia Potter
That's very interesting. Were there any final thoughts you wanted to say? I think otherwise we're nearing the end of our podcast here.
42:40
Ryan Manucha
I just want to say thank you so much for this opportunity. I feel like Canadians have heard a lot about internal free trade, and they've heard a lot of like Globe & Mail op-ed type pieces. And I think Canadians, I feel, I'm sensing are getting, having an appetite for like what's really going on in this file. Where are we really moving the mark and where are we falling short and what's next?
42:59
Ryan Manucha
And I've really appreciated this conversation, this opportunity to talk through some of the more nitty gritty and maybe less sexy versions of the internal trade file. But I think you and your audience, I think that there's so much overlap between internal trade and competition law. Please, my inbox is open. If you see an avenue to collaborate on something, please do ping me. And I just really enjoyed this conversation.
43:20
Julia Potter
Thank you so much for joining us. I mean, it's really great to get some of those insights on to what I would say are current events, but obviously there's a long history behind all of this. So current with the lesson on what's been leading up to all of this. And so, yeah, we very much appreciate you coming on and sharing your expertise with us and giving us some of that detail that we might be otherwise missing.
43:41
Julia Potter
And then to our listeners, of course, thank you for listening to this episode of Counterfactual. If you have questions, comments, or ideas for future episodes, please do you contact us at podcastcommitteeatcba.org. And make sure to follow us on your preferred podcast platform so that you don't miss an episode. So thanks, everyone. Have a great day. Bye.