Question Period Note: ADVANCING INTERNAL TRADE AND THE TRADE OF BEVERAGE ALCOHOL

Internal Trade (General)
• The Government of Canada is strongly committed to reducing internal trade barriers and implementing its Budget 2021 commitments alongside its provincial and territorial partners.
• The pandemic has shown the importance of enhancing internal trade for the post-COVID economic recovery and future growth opportunities for all Canadians.
Trade in Beverage Alcohol
• Restrictions on the interprovincial sale and transport of alcohol are major irritants for Canadian consumers and producers.
• Even marginal changes to reduce barriers and open new sales channels in this sector can result in significant economic gains for the Canadian economy.
• In 2019, the federal government moved decisively and removed the only remaining federal restriction to the Importation of Intoxicating Liquors Act (IILA) regarding alcohol moving from one province to another.
• Our government is committed to working with provinces and territories to act and reduce their remaining barriers and liberalize trade in alcohol across the country.

• Trade within Canada increases economic growth across the country, by creating jobs, growing the middle class and helping Canadian businesses expand.
• Trade between provinces and territories accounts for just under one-fifth of Canada's annual GDP, or $370 billion. It also accounts for almost 40 per cent of all provincial and territorial exports.
• The Canadian Free Trade Agreement (CFTA) came into force on July 1, 2017, replacing the 1995 Agreement on Internal Trade, and committing governments to a comprehensive set of rules that will help achieve a modern and competitive economic union for all Canadians. It is a consensus-based agreement and requires the support of all 14 Federal, Provincial and Territorial (FPT) ministers of the Committee on Internal Trade (CIT) to amend or operationalize elements of the Agreement.
• The Government of Canada actively participated on the various CFTA working groups throughout 2020 and 2021, to work towards advancing the trade in alcohol file and negotiations on both financial services and non-medical cannabis.
• Through Budget 2021, the federal government committed to allocate $21 million to strengthen FPT capacity to reduce internal trade barriers within Canada in order to:
o enhance the capacity of the CFTA Internal Trade Secretariat;
o create a repository of open and accessible pan-Canadian internal trade data to identify barriers, including licensing and professional certification requirements, to allow FPT governments to better work together to reduce them; and,
o create a process to link the removal of internal trade barriers to the transfer of discretionary funding to PTs.
• In August 2021, the Government of Canada also enhanced its commitments in the CFTA by making:
o amendments to several federal exceptions in the CFTA, which signaled the government’s continued commitment to expand its obligations in the CFTA; and,
o commitments to PTs to continue to review remaining federal exceptions to further reduce as appropriate.
• The Government of Canada is also seeking to identify targeted efforts to engage leading stakeholders and identify top barriers to trade for FPT prioritization.

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