Premiers dampen hopes of provincial trade deal ahead of meeting

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Canada's premiers are about to sit down in Yukon to discuss the largest overhaul of interprovincial trade rules in a generation, possibly opening Ontario stores to more B.C. wine and its road projects to outside bidders, but outstanding issues could prevent a final deal from being adopted this week.

Erasing trade barriers between provinces has been a fixture of national meetings for decades. Intense negotiations over the month before provincial and territorial leaders gathered in Whitehorse on Wednesday have brought the provinces close to the long-sought agreement, but Alberta Premier Rachel Notley says it is unlikely a deal will be completed in the half-hour set aside to discuss it on Thursday.

"We're fairly close to agreement," Ms. Notley said on Tuesday evening before leaving for Yukon. "I think we've come to a good deal of consensus. There are a few matters outstanding that involve several provinces.

"The roughly half an hour on the agenda is not an opportunity for us to cut a deal."

Yukon Premier Darrell Pasloski told reporters before the meeting that an agreement would tear down trade barriers between provinces, many of which are more onerous than those between Canada and other countries. B.C. Premier Christy Clark says provinces are ready to compromise to do away with rules she has called ridiculous.

Two decades after the provinces agreed to the current trade rules, John Manley, president of the Business Council of Canada, says the premiers need to show that they are ambitious.

"The time has come for them to agree and move this forward. The business community, broadly written, is going to be extremely disappointed if the premiers can't crack this. We've been negotiating for a long time," he said.

Mr. Manley, a former Liberal deputy prime minister, was federal industry minister when the Agreement on Internal Trade came into force in 1995. He said that agreement was meant to start the country on the road to breaking down trade barriers. He said he is optimistic that the long-delayed process is back on track.

Despite her skepticism, Ms. Notley said Alberta has not opposed a deal.

Many of the trade rules premiers want to ditch were erected to keep out businesses from neighbouring provinces in an attempt to protect local jobs. Atlantic Canada has measures that favour local businesses in government procurement. Quebec and Newfoundland and Labrador have a long-standing dispute over the transportation of northern hydroelectric power. Ontario has protectionist measures over who can bid on infrastructure projects.

Opening up Ontario liquor stores to more wines from B.C.'s Okanagan Valley is one of the most-often cited benefits of having fewer trade barriers.

Even Ms. Notley's government is facing criticism on the trade front this week. Saskatchewan Premier Brad Wall said he is considering retaliation against Alberta's plan to hike its tax on beers from B.C. and Saskatchewan even though the three provinces are part of a free-trade zone known as the New West Partnership.

The tax will increase in August from about 47 cents a litre to $1.25. While Alberta brewers will also pay it, the province is creating a grant program to help them compete with the now costlier imports.

The grant program is unfair, said Michael Micovcin, president of the Great Western Brewing Company, based in Saskatoon.

"It's shocking and confusing. All we've heard about of late is how the provinces are working together to create fewer barriers. This will only make things worse," Mr. Micovcin said.

More than 60 per cent of the company's brews go to Alberta, where its pilsners are ubiquitous on store shelves and are often some of the cheapest in the province.

Alberta Trade Minister Deron Bilous told The Globe on Wednesday that it will still be cheaper for Saskatchewan brewers to sell in Alberta than at home because of taxes there. "Even at $1.25, it's cheaper to sell into Alberta than their own province. Maybe they should look at their own policies," he said in a message to Saskatchewan's Premier.