Sask. premier wants to streamline domestic trade in response to tariffs

Saskatchewan Premier Scott Moe says he wants to streamline Canada's provincial trade regulations and amend the Canadian Free Trade Agreement in response to U.S. tariff threats.

Moe made those statements Friday, as he prepared to leave on a trade mission to Washington, D.C., where he'll discuss tariffs with American lawmakers and join other provincial leaders at the premier's Council of Federation meeting. 

On updating trade regulations, Moe said, "it's tedious work, but it's absolutely necessary."

"Whether it's the trucking industry, construction industry or mining industry, all too often regulations in one province are formed at a different time than another, and they're not aligned."

The premier said that removing these differences, which would also come with the removal of exemptions in the Canadian Free Trade Agreement, has long been a goal of his government. 

Explicit tariffs between provinces are forbidden in Canada, but many barriers exist due to differing provincial rules, regulations and licensing requirements. The CFTA, which came into effect in 2017, dictates these trade exemptions.

"We have less than most other provinces, less exemptions," said Moe. "The highest number of exemptions is the federal government. We've been assured that they are looking at their exemptions with a very critical eye to target to remove a good number of them as well." 

The idea of reducing barriers to trade between the provinces and territories has long been discussed, but has gained renewed attention in recent weeks in light of hefty tariff threats on Canadian goods by U.S. President Donald Trump, which were set to come into effect this past week but have been put on hold until March.

Earlier this week, Federal Internal Trade Minister Anita Anand said it would be possible to remove interprovincial trade barriers within a month, and that the U.S. tariff threat has brought a sense of urgency to the issue.

$20B in interprovincial exports

Saskatchewan exports over $20 billion worth of goods and services to other provinces and territories each year, according to Statistics Canada, including $13.7 billion worth of goods alone in 2021, the most recent year for which data was available.

Crude oil, cattle and other petroleum products are the largest contributors, alongside grain and canola.

In 2021, Saskatchewan exported $21.4 billion worth of products to the rest of the world, including $13.1 billion to the U.S.

But infrastructure remains an inherent challenge to Saskatchewan's trade, said Moe. The inability to build oil and gas pipelines to eastern Canada and the west coast is the country's "number 1 interprovincial regulatory challenge," he said. 

"Pipeline infrastructure is paramount. So is rail and port access."

Building new cross-country pipelines has long been a goal of Saskatchewan and Alberta. It has also been opposed by environmental groups and some provinces, including Quebec, most notably with the cancelled Energy East pipeline project.

Moe rebuffed that opposition.

"Quebec can't refuse. The federal government makes the approval," he said.

After the Council of Federation meeting in the U.S., Moe will continue on to Mexico City to discuss trade agreements with government officials there.

"We're working on a number of plans" toward diversifying the province's global trading partners, said Moe, citing Mexico, India and Japan as possible candidates for new agreements.

According to the government of Saskatchewan, nearly 55 per cent of the province's total exports went to the U.S. in 2023. While Saskatchewan has expanded its non-American trade in recent years, trade with the United States has grown even faster, increasing from a low of 44.9 per cent of total goods exports in 2016.

Moe says he wants to change that.

"We are the highest per capita exporting province in the nation, and we're the most diversified as well," he said.

"You're going to see other ministers, whether it be our minister of agriculture or minister of trade and export development in some of our key markets around the world."

'A herculean task'

Simon Enoch, who researches Saskatchewan for the Canadian Centre for Policy Alternatives, agrees with Moe's plans but is skeptical of their timelines.

"Replacing the kind of trade volumes that we give to the United States, it's going to be a herculean task," he said. "Will it be profitable for us to ship commodities to a certain country, whether it's a Pacific Rim country or Europe?"

With transportation costs factored in, "all of a sudden those margins become a lot thinner," he said.

Building new pipelines, and the political fights that would bring, would be similarly challenging, said Enoch.

He's also skeptical of Moe's internal trade regulation goals.

"I just don't think there's much there," he said. "I am very, very skeptical of the numbers that certain groups are saying that, you know, we can … energize the economy by getting rid of these [interprovincial] barriers."

Instead, Enoch envisions a new national infrastructure policy akin to prime minister John. A. Macdonald's national policy to build the Canadian Pacific Railway in the 19th century — "a modernized version of that with both energy corridors and high-speed rail," he suggests.

"Things like that would be much more effective at ensuring that  companies … could be much more effective in ensuring that Canadian provinces could access each other's markets."

'Going to be a little terrifying': agronomist

At an event in Saskatoon on Friday, Saskatchewan NDP Leader Carla Beck said she remains focused on making sure the U.S. tariff pause continues.

"Even if it's 10 per cent tariffs, that is going to have a terrible economic impact, not only on this province but on our whole country," the Opposition leader said.

She said there's a "need to diversify markets to increase east-west trade within Canada, to make sure that we are selling our world-class goods."

Anisten Thom, an agronomist from Langenburg, northeast of Regina, said her biggest concern for her family's farm is the uncertainty of the next few weeks.

"Mainly our big talk is what can happen in the future," she said. "You never know, especially with parts. I know parts are going to become hard to find and hard to come across. Hopefully nothing breaks down anytime soon."

While Thom's farm does export crops to the U.S., her larger concern is the cost of fertilizer, much of which is produced in the U.S.

"It's always going to be a little terrifying to know you're never really going to know what's coming out of this," she said.