Similar to international free trade agreements such as the Canada-EU Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement on Trans-Pacific Partnership (CPTPP), workers, businesses, and investors can leverage many opportunities under domestic free trade agreements. These domestic trade agreements go beyond what is covered in Canada’s international free trade agreements – for example, domestic trade agreements’ coverage of labour mobility also address credential recognition for regulated occupations.
Domestic trade agreements cover trade, investment, and labour mobility within Canada, and seek to ensure that Canadian companies do not face more barriers than foreign companies when doing business in Canada. Because there are no barriers such as tariffs or border procedures within Canada, domestic trade agreements largely cover non-tariff barriers. Non-tariff trade barriers are obstacles to trade that can take the form of variations in regulatory or technical, product testing, certifications procedures, or labelling requirements or administrative divergences that inhibit the gains from trade.
British Columbia (B.C.) is part of two domestic free trade agreements: the New West Partnership Trade Agreement (NWPTA) (B.C., Alberta, Saskatchewan, and Manitoba) and the Canadian Free Trade Agreement (CFTA).
The CFTA is a trade agreement between all provinces, territories, and the federal government. It entered into force on July 1, 2017 and replaced the Agreement on Internal Trade. The CFTA created opportunities for businesses in Canada through the reduction or elimination of domestic trade barriers to the free movement of persons, goods, services, and investments within Canada, creating an open, efficient, and stable domestic market for long-term job creation, economic growth, and stability.
The CFTA also provides businesses across Canada with additional benefits such as the ability to bid on more government procurement contracts across the country and ensures B.C. and Canadian companies are competitive both domestically and internationally. Negotiations are underway to extend the coverage of the CFTA to three additional sectors: alcoholic beverages, financial services, and cannabis. Larn more about the CFTA
An important feature of the CFTA is the creation of the Regulatory Reconciliation and Cooperation Table (RCT), which has a mandate to reconcile variances in regulatory barriers to trade, investment, and labour mobility within Canada. This is done in two ways: through reconciling differing regulatory measures between the federal government, provinces, and territories that act as barriers to trade, investment, or labour mobility, and through cooperation efforts in the development of future regulatory measures to avoid the creation of new barriers to trade. B.C. was the RCT lead for the successful Construction Codes Reconciliation Agreement, a major reconciliation agreement that reduces or eliminates the variations in technical requirements in construction codes across Canada. The annual economic benefit attributable to this work is estimated to be between $750 million and $1 billion by 2028.
B.C. is leading the way
B.C., along with Alberta, was a founding member of the Trade, Investment and Labour Mobility Agreement (TILMA), which expanded to become the New West Partnership Trade Agreement
(NWPTA). The NWPTA creates a strong and competitive economic region encompassing B.C., Alberta, Saskatchewan, and Manitoba.
Through the NWPTA, the four western provinces have created the most open and competitive economy in North America, with a market of 11 million people and a gross domestic product over $720 billion. Key benefits for businesses because of the NWPTA include:
- freer movement of goods, services, capital, and workers across the NWPTA region, increasing competitiveness and making it easier for businesses to expand;
- business standards and regulations have been streamlined, allowing businesses to register their corporation in multiple provinces at the same time;
- certified workers benefit from enhanced labour mobility provisions that allow them to practice their occupation in B.C., Alberta, Saskatchewan, and Manitoba;
- required that Parties reconcile their standards and regulations; and
- greater access to government procurement for businesses in the four provinces through lower procurement thresholds. Using a new bid protest mechanism, suppliers in the four provinces can also challenge procurement decisions that they believe were not conducted according to the Agreement.
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The Trade Policy and Negotiations team
at Trade and Invest British Columbia welcomes your questions, feedback, and comments on Canada’s domestic and international trade agreements and ongoing negotiations.
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