Ottawa, October 6, 2011 — Today, the Honourable Christian Paradis, Minister of Industry, reintroduced the Improving Trade Within Canada Act (ITCA), designed to implement enhancements to the resolution process for government-to-government disputes under the Agreement on Internal Trade (AIT).

"Strengthening Canada's economic union is a priority for the Government since it is essential to achieving our full national potential," said Minister Paradis. "Through this legislation, we will ensure accountability for compliance with the Agreement on Internal Trade."

The ITCA is consistent with the Government of Canada's internal trade priorities and AIT amendments made by the federal-provincial-territorial Committee on Internal Trade in October 2009. Non-compliance with AIT obligations could result in financial penalties of up to $5 million for the Government and the larger provinces. Provincial and territorial ministers are in the process of taking similar steps to ensure accountability for compliance across the country.

"Canadians have given our government a strong mandate to stay focused on what matters: creating jobs and economic growth," said Minister Paradis. "By removing barriers to internal trade and promoting a strong domestic market, we are living up to that commitment."

The AIT, a national agreement that commits governments to reducing barriers to the free movement of goods, services, investments and persons within Canada, was signed by Canadian first ministers in 1994.

The Government continues to work cooperatively with the provinces and territories to remove barriers to labour mobility, investment and trade by strengthening the AIT. Key improvements made in recent years include full labour mobility of regulated professions, freer trade in agricultural products, more transparent procurement practices and the reduction of transportation barriers.

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Backgrounder - Reintroduction of the Improving Trade Within Canada Act

The Improving Trade Within Canada Act (ITCA) demonstrates the Government of Canada's commitment to work collaboratively with the provinces and territories to amend the Agreement on Internal Trade (AIT) and increase compliance with its obligations.

In October 2009, federal-provincial-territorial ministers of the Committee on Internal Trade amended the enforcement mechanism for government-to-government disputes under the AIT as part of their commitment to strengthen the AIT. Those amendments allow for monetary penalties to be levied against governments for non-compliance with the AIT and provide panels presiding over disputes with the power to order a monetary penalty. The new process also sets out qualification criteria for members of such panels, and the ITCA implements these improvements.

With the passage of the ITCA, a monetary penalty against the Government of Canada will be enforceable in the same manner as an order of the Federal Court and payable from the Consolidated Revenue Fund. The magnitude of a monetary penalty depends on the population of the jurisdiction. The maximum amount for smaller provinces and territories is $250,000. The maximum penalty for the federal government and larger jurisdictions is $5 million. The ITCA will also ensure that Governor-in-Council appointments of panel and appellate members satisfy the new qualification criteria.

The ITCA includes other minor technical amendments, such as the removal of a redundant subsection in the Crown Liability and Proceedings Act,and updates to definitions and section headings in the Agreement on Internal Trade Implementation Act to reflect changes in the AIT. As the ITCA covers only the Government of Canada, provinces and territories are in the process of taking the necessary steps to implement similar amendments.

The current efforts to strengthen the enforcement of the AIT and increase government accountability address recommendations put forward by private sector stakeholders, international organizations and think tanks. Such groups have claimed the enforcement of panel rulings on non-compliance with the AIT is not strong enough. More generally, they have also called for increased federal leadership in removing internal trade barriers. These efforts are consistent with the federal priority of building a stronger economic union and working together with the provinces and territories in eliminating internal barriers to commerce and labour mobility.

The AIT, which was signed in 1994 by 13 federal, provincial and territorial governments, reduces barriers to the interprovincial movement of persons, goods, services and investments. Since 2007, the Government of Canada has worked with the provinces and territories to more broadly liberalize labour mobility, to introduce an agriculture chapter to the AIT, and to strengthen provisions within its investment and procurement chapters. Key ongoing efforts include harmonizing regulations, improving procurement practices and further strengthening the effectiveness of the AIT through its enforcement process.