Premiers head home from Whitehorse with double-edged challenge: Chris Hall

Canada's premiers need to take advantage of a partner in Ottawa who's willing to engage with them again. But they also have to put up enough of a common front to keep Justin Trudeau from acting unilaterally — as so many prime ministers have done before.

How do you capitalize on a re-engaged federal partner, while making sure Ottawa can't divide and conquer?

Canada's premiers during the closing news conference following a meeting of premiers in Whitehorse, Yukon, Friday. The premiers came to terms on an agreement in principle for an internal free-trade deal. (Jonathan Hayward/Canadian Press)

The biggest deal coming out of the annual premiers' meeting, which wrapped up Friday in Whitehorse, was the one that almost didn't happen at all. But after extending their conference beyond the scheduled closing, the premiers came up with an agreement in principle for a free-trade deal within Canada.

Free trade. Within Canada. It's taken years to get to this point. Much longer than, say, negotiating the proposed free-trade deal with the European Union. Or the Trans-Pacific Partnership. And there are still issues to be ironed out, including this one: "exploring opportunities to improve trade in beer, wine and spirits across Canada."

To say that provincial laws banning the import of booze take protectionism to absurd lengths is like saying if you drink too much you'll have a hangover the next day.

Provinces decree different sizes for beer bottles. New Brunswick just lost a court case in which the province charged a retired steelworker for bringing 14 cases of beer and three bottles of liquor into the province for his personal consumption.

Booze wasn't the only obstacle. Several delegations said Alberta's Rachel Notley insisted on a carve-out that would give Alberta-based companies preference in bidding on her government's $34 billion in infrastructure projects over three years.

Other premiers objected to the protectionist element. The deal hung in the balance. But in the end the premiers did what Canadian politicians invariably do: they compromised. 

If that hadn't happened, the big news coming out of Whitehorse would have been that they failed. Or perhaps even worse. The media coverage would have focused on another deal that is sure to make wine lovers happy — but only if they live in the country's three largest provinces.

Free the grape

British Columbia, Ontario and Quebec announced that they will work together to ensure wines produced in each of their provinces can be bought online through their respective liquor control boards.

"I'm really very excited about it," Ontario Premier Kathleen Wynne told reporters on Friday. "People will be able to have that wine delivered to their home or pick up at the LCBO. It's a significant change."

B.C. Premier Christy Clark and Quebec Premier Philippe Couillard joined Wynne in calling it a victory for consumers and wine producers in their provinces. But before wine lovers in, for example Ontario prepare to raise a glass of their favourite Okanagan red, it's worth bearing this in mind.

The real winners here are the provinces' monopolistic liquor distribution systems, and for the taxes those agencies collect on the government's behalf.

Real free trade in wine or any other alcohol, which would include allowing people to buy directly from a wine producer, remains out of reach.

"We haven't freed the grape," said Clark, who got these talks going back in 2013 by presenting Wynne with a bottle of B.C. wine at the premiers' meeting in Niagara-on-the Lake, Ont., to underscore the point that it was unavailable in that province.

"But we've made it freer," Clark said.

Clark is in favour of selling direct to consumer. Her colleagues are not.

And here's why.

There's a concern that allowing unfettered online ordering would breach international trade agreements, forcing the provinces to open up direct ordering to American or French wine producers. That, a provincial official conceded, would mean the end of the LCBO and Quebec's SAQ.

Wynne said it could also harm Ontario's wine industry.

"Thirty years ago, Premier Couillard will tell you, there was no wine industry in Ontario — at least, not one that would pass the Quebec test," she said. "So we are having to work with the industry and that's what we are doing. So this is a step they are willing to take and that they see some potential in. And that's why we're working through the LCBO."

British Columbia Premier Christy Clark, left, Ontario Premier Kathleen Wynne, centre, and Quebec Premier Philippe Couillard struck a deal on the sale of wine between their respective provinces. (Jonathan Hayward/Canadian Press)

This side deal on wine will, at some point, presumably be folded into the larger free-trade deal, once the provinces and territories can agree on standard beer bottles and to harmonize a host of other regulations.

But this agreement in principle, once ratified, is a significant achievement.

Just last month, a Senate committee report said those barriers cost the Canadian economy billions of dollars each year.

Federal Industry Minister Navdeep Bains has also pushed for a deal, arguing it would enhance business activity.

"Internal trade barriers discourage foreign and Canadian companies alike from investing in Canada," Bains said earlier this month, "which means we miss out on opportunities to create good-paying jobs for Canadians and grow our economy."

To your health

The premiers also formed a united front on health care. There's the usual call for more money from Ottawa, and a meeting with Prime Minister Justin Trudeau this fall "dedicated to advancing a long-term agreement on health care funding."

But the most significant part of the communique released in Whitehorse is that the premiers overcame differences on how to approach Ottawa.

Saskatchewan Premier Brad Wall wanted funding with Ottawa to be in place before any discussion about what should be included in a new health accord.

Similarly, Quebec's Couillard insisted the federal government should butt out when it comes to setting spending priorities.

In the end, those views prevailed. The final communique calls for "an immediate increase in funding through the Canada Health Transfer" and for a first ministers' meeting this fall to finalize a new long-term accord that gives all provinces the same flexibility as Quebec to decide their own priorities.

Saskatchewan Premier Brad Wall Wall said a carbon tax would harm an energy sector already struggling with low prices. (Jonathan Hayward/Canadian Press)

So a successful meeting with one notable exception: the premiers couldn't come up with a united approach on climate change.

Saskatchewan and the territories oppose any carbon tax, with Wall insisting (again) that it would harm an energy sector already struggling with low prices. Yukon Premier Darrell Pasloski, in an interview with CBC Radio's The House, called it a ''made-in-the-south tax on northerners'' who already face a higher cost of living.

Pasloski, who chaired the meeting, has a reason to dig in. He has to go to the polls later this year, and picking a fight with the feds is a time-honoured re-election tactic employed by every sitting premier.

For the premiers as a group, there's an opposite imperative. And a rationale to keep these annual meetings going.
Ontario Premier Kathleen Wynne shakes hands with Yukon Premier Darrell Pasloski in Whitehorse. Pasloski says a carbon tax would unfairly penalize northerners. (Jonathan Hayward/Canadian Press)

When Stephen Harper became prime minister in 2006, these gatherings became a way of pushing ahead with priorities in the absence of formal meetings with Harper, who saw no reason to submit himself to an annual pounding from his provincial colleagues, or to allow Pierre Trudeau's mocking dismissal of Joe Clark as a ''headwaiter to the provinces" to be applied to him.

Justin Trudeau, on the other hand, is willing to work with the provinces. But this week he served notice that he will impose a national price on carbon if the provinces don't come up with a plan to reduce emissions by the fall.

So it's a double-edged challenge for the premiers as they head home.

They need to take advantage of a partner in Ottawa willing to engage with them. At the same time, they need to find a way to limit the number of issues on which they can't forge their own agreement, giving Justin Trudeau the convenient political excuse to act unilaterally — just as so many prime ministers have done before.

About the Author

Chris Hall

National Affairs Editor

Chris Hall is the CBC's National Affairs Editor and host of The House on CBC Radio, based in the Parliamentary Bureau in Ottawa. He began his reporting career with the Ottawa Citizen, before moving to CBC Radio in 1992, where he worked as a national radio reporter in Toronto, Halifax and St. John's. He returned to Ottawa and the Hill in 1998.


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