Small Business Owners Want to Ease Trade Barriers | FBC, Canada's Farm & Small Business Tax Specialist

Small Business Owners Want to Ease Trade Barriers

Though most small business owners' clientele comes from inside the province in which they operate, there are many entrepreneurs who wouldn't be making what they are without the patronage of those who live in the nine surrounding provinces.

This may explain why they want lawmakers to start making inter province free trade a priority in the second half of 2015, based on a recent survey conducted by the Canadian Federation of Independent Business (CFIB).

Nearly 9 in 10 small businesses - 87% - believe that premiers should make the trade restrictions that lie between provinces more lenient, according to a new poll conducted by CFIB.

"The Agreement on Internal Trade (AIT) was signed into law in 1995."

In 1995, Canadian federal and provincial trade ministers across the country helped enact legislation by signing the Agreement on Internal Trade (AIT). Its charter is to reduce the red tape and barriers that prevent the flow of goods, services and investment among the provinces, furthering Canada's capitalism-based economy. All 10 provinces signed the AIT, including the Yukon and Northwest Territories.

On June 9, trade ministers from all across the country held a meeting to discuss the details of AIT and the potential of amending it to make free trade easier for companies to implement into their business model.

Laura Jones, executive vice-president at CFIB, indicated that this survey comes just as the Canadian government is about to put ink to paper on a new free trade agreement with Europe.

"It's more important than ever for the provinces to move quickly to remove internal barriers within Canada through the creation of a new trade deal," said Jones. "As things stand, there may be instances where European companies have better access to Canadian opportunities than a business in a neighboring province."

Formerly Committed to Rehashing AIT in March 2016

The AIT has been a long-simmering issue. The last time that legislators took up the bill, they pledged to establish new trade rules by 2016. But small business owners and trade groups are pushing for reform to come much sooner.

"Despite efforts over the years by governments to overcome Canada's internal trade barriers, there are still too many restrictions from province to province," said Corinne Pohlmann, CFIB senior vice-president of national affairs.

"It's time for provincial trade ministers to take the existing momentum on trading issues to seal a national deal that reflects the 21st century trading needs of Canadian small businesses."

Free trade has proven to be crucial component to the globe's economic vibrancy.Free trade has proven to be crucial component to the globe's economic vibrancy.

How to Expedite Free Trade

In its report, "Transforming Trade: Reforming our Economic Union to Remove Barriers to Internal Trade," CFIB makes several suggestions for how trade barriers can be loosened.

For example, the report suggested that provinces share some of the same rules. In other words, if a product or service is in compliance with the law in Ontario, it ought to be able to pass Alberta's legal scrutiny.

It also recommended that there ought to be a different mindset about cross border trading, where if there aren't any clearly defined rules stating otherwise, trading a particular product or service should be considered allowable.

During a press conference, federal industry minister James Moore told reporters that the best way to deal with trade legislation is through greater transparency.

"That is the path we are choosing," Moore said, according to CBC News. "There should be as much free trade within Canada as there is between Canada and the U.S. or the EU."

The next time provincial, federal and territorial ministers plan on meeting to further discuss revising the Agreement on Internal Trade rules is this fall, CBC News reported.

In the meantime, there are a lot of tax considerations for business owners that frequently trade with neighboring provinces.

Federal and provincial tax rates aren't uniform, so business owners have to take each into account as dictated by the Canada Revenue Agency. FBC has offices across Canada and can help with tax preparation and calculations, because at FBC, we're committed to making the process less taxing.

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