Yukon will retain local business incentives in new free trade deal

Canada’s premiers announced a new interprovincial free trade deal at the end of meetings in Whitehorse last week, but it’s unclear exactly what the agreement will mean for the Yukon.

Canada’s premiers announced a new interprovincial free trade deal at the end of meetings in Whitehorse last week, but it’s unclear exactly what the agreement will mean for the Yukon.

On Friday morning, it seemed unlikely the premiers would reach an agreement on internal trade by the end of the Council of the Federation meetings, in part because of disagreements over the free trade of alcohol between jurisdictions.

But after staying late on Friday afternoon, provincial and territorial leaders finally announced an agreement in principle on a new Canadian Free Trade Agreement.

“This is something that will help businesses be more productive,” said Premier Darrell Pasloski, who chaired the meeting. “It’s going to help create jobs and increase our economy.”

The deal will replace Canada’s existing agreement on internal trade, which has been in place for the last 23 years.

It’s intended to remove trade barriers between provinces and territories and to promote labour mobility across the country.

Pasloski explained that the old agreement covered only specific sectors of the economy, while the new free trade deal will take a “negative list” approach, meaning it will cover the entire economy except for certain exemptions.

But those exemptions have yet to be released, meaning it’s hard to say just how far this agreement will reach.

The premiers have agreed to establish a working group to discuss the trade of alcohol, one of the major sticking points during negotiations.

Northwest Territories Premier Bob McLeod said he was pleased with the agreement after the meeting ended on Friday.

“Our expectation is our cost of living will go down in a number of areas,” he said, referring specifically to heating oil and building materials.

The new deal will also expand access to government contracts across the country. But Pasloski said the Yukon will retain its business incentive program, which allows the Yukon government to give rebates to contractors that hire Yukoners or use products manufactured in the Yukon.

“The provinces understand the unique circumstances that the territories are under and they support the Yukon having the same exemptions in the new agreement that they had in the old agreement,” he said.

Yukon Chamber of Commerce president Peter Turner said he’s “cautiously optimistic” about the new trade deal, but it’s difficult to say whether the agreement will improve conditions for Yukon businesses.

Turner believes that business incentive policies in the Northwest Territories and Nunavut are more protectionist than the Yukon’s, and that the New West Partnership Trade Agreement signed by British Columbia, Alberta and Saskatchewan makes it more difficult for Yukon companies to bid on contracts in those provinces.

“It’ll be interesting to see whether those protectionist strategies remain or whether they’re reduced,” he said.

But Pasloski said not everyone in the business community agrees that Yukon companies need more protection.

“We have some very good companies that are opposed to protectionist types of incentives, because they’re trying to compete in a larger scale,” he said.

Yukon NDP Leader Liz Hanson criticized Pasloski for not being more open about what he asked for that would benefit Yukoners during the negotiations.

She pointed out that Alberta Premier Rachel Notley lobbied for her province to be allowed to give preferential treatment to local companies, given its sagging economy. It’s been reported that she reached a compromise with the other provinces.

“What about what was discussed last week will create more opportunities for us to grow our economy here?” Hanson asked.

Air North president Joe Sparling said Yukon companies do have to be strong enough to compete with Outside businesses, but the public sector should still try to spend its money locally.

“If the private sector was running the government, they would be absolutely, ruthlessly sensitive to any dollar that left the territory … needlessly,” he said.

He said he doesn’t anticipate the trade deal having major impacts on Yukon companies, “so long as we don’t become indifferent to the advantages of spending our money locally.”

Yukon Brewing president Bob Baxter said his company is affected by trade barriers when it comes to exporting Yukon beer to the rest of Canada. But he said it’s difficult to know, at this point, how the new agreement will affect the trade of alcohol.

Still, he said there are steps the provinces could take to help Canadian breweries, quite apart from the new free trade deal. He’d like to see government liquor stores across the country devote a little shelf space specifically to Canadian craft beers.

“Let’s quit pandering to the big guys by carrying their whole selection of everything,” he said. “Let’s open a window and let some product in.”

Contact Maura Forrest at

maura.forrest@yukon-news.com

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