Business
Trump ‘tariffs’ threat should hasten trade liberalization among provinces
From the Fraser Institute
By Jake Fuss and Grady Munro
To much fanfare, President-elect Donald Trump has threatened to impose a 25 per cent tariff on all imported products coming into the United States from Canada. The premiers will meet with Prime Minister Trudeau this week to discuss the situation and possible next steps. While the discussion will no doubt focus on trade with the U.S. and other countries, they should also consider trade reform within our national border.
Indeed, provinces and territories have considerable autonomy to set rules for trade with other Canadian jurisdictions. These rules (or barriers) include different inspection and labelling requirements for agricultural goods, different trucking regulations, different standards and certifications for professionals, provincial monopolies over alcohol distribution, and more.
As with international barriers, trade barriers within Canada inhibit the free flow of goods, services and labour between provinces, which reduces productivity and increases prices. In other words, Canadians pay the price for our interprovincial trade barriers. And the costs are significant. Research suggests that interprovincial trade barriers add between 7.8 per cent and 14.5 per cent to the price of goods and services including groceries and other necessities.
More broadly, according to a 2020 study published by the Fraser Institute, interprovincial trade barriers cost the Canadian economy more than $32 billion per year or approximately 1.4 per cent of GDP. According to a TD report released last month, a 10 per cent across-the-board tariff by the U.S. (and the subsequent retaliation by Canada on U.S. imports) would reduce Canada’s GDP by approximately 2.4 percentage points over two years, compared to current baseline projections. Therefore, if Canadian policymakers removed interprovincial trade barriers they could mitigate much of the economic harm caused by potential new U.S. tariffs.
What would those changes look like?
While the Canadian Free Trade Agreement (CFTA)—a 2017 agreement between the federal government and all provincial and territorial governments—was an important step toward greater trade liberalization in Canada, the Trudeau government should propose a policy of “mutual recognition” so that any item that meets the regulatory requirements of a single province or territory automatically satisfies the requirements of another.
And while the federal government should promote free trade within Canada, provincial and territorial governments should also reduce barriers. In addition to negotiating agreements among themselves (such as the New West Partnership Trade Agreement between British Columbia, Alberta, Saskatchewan and Manitoba) provinces can unilaterally eliminate self-imposed trade barriers (as Alberta did in 2019 with grazing permits for livestock and other reforms).
Trade is fundamental to economic activity, opportunity and prosperity for Canadians from coast to coast. In light of Trump’s aggressive trade posture, now more than ever the federal government and the provinces and territories should work together to remove interprovincial trade barriers to mitigate any economic damage from a hostile trade regime south of the border.
Business
Essential goods shouldn’t be taxed
From the Canadian Taxpayers Federation
By Jay Goldberg
The Trudeau government’s two-month GST holiday on certain items has been called many things.
Former finance minister Chrystia Freeland resignation letter suggests she thinks it’s a “gimmick.”
Conservative Leader Pierre Poilievre has called it a “tax trick.”
But here’s a more fundamental question: If the government thinks Canadians needs a sales tax holiday on certain items, why are those basics taxed in the first place?
Items like car seats, diapers, and pre-prepared foods are all taxed by the feds. They’re all also subject to the federal government’s sales tax holiday, which Prime Minister Justin Trudeau says was triggered because Canadians are having a hard time making ends meet.
“Our government can’t set prices, but we can give Canadians, and especially working Canadians, more money back in their pocket,” said Trudeau at his GST holiday announcement.
At least Trudeau seems to know it’s bad for governments to set prices. But the government does raise prices by adding sales tax on top of goods Canadians have to buy.
And you don’t need to be a parent to know that car seats and diapers are among the most essential goods on a parent’s shopping list.
Take a car seat. A mid-tier car seat costs around $250. The federal sales tax, which is currently at five per cent, adds $12.50 to the final cost of that car seat.
Parents across the country are no doubt asking why things like car seats and diapers were taxed by the feds in November, will be taxed again by the feds in March, but aren’t being taxed right now.
What justification can the government possibly give to parents on Feb. 16, 2025 – the day this sales tax holiday ends – for once again taxing things like car seats and diapers?
The same goes for pre-prepared meals. Many Canadians buy pre-prepared food at grocery stores to bring to work for lunch or to eat on the go. Why are the ingredients for that pre-prepared meal not taxed but the final meal is? And why take the tax off a grocery store deli sandwich now but not a few months from now?
There’s even more of an argument to be made on this front because many provinces don’t tax a lot of the items that are part of the feds’ sales tax holiday.
Take Ontario as an example.
Canada’s most populous province doesn’t tax things like books, children’s clothing, car seats, and diapers. Some pre-prepared foods aren’t taxed either.
If provinces don’t tax these items, why do the feds?
The Trudeau government took inspiration from the NDP when it comes to the GST break. It ought to also take inspiration from the party’s call to make relief permanent.
Trudeau’s GST announcement came just days after NDP Leader Jagmeet Singh called for the permanent removal of the federal sales tax on items like pre-prepared meals, diapers, and car seats. Singh’s proposal actually went much further, and included ending the GST on home heating, as well as internet and phone bills.
In touting his proposal, Singh argued that “those taxes never should have been there in the first place.”
Singh is right. Essential goods shouldn’t be subject to the GST. Period.
Just days after Singh’s announcement, Trudeau played copycat with one of his own.
But a two-month reprieve pales in comparison to permanent relief.
If the Trudeau government wants to deliver real relief to struggling Canadian families, essential items that most provinces already don’t tax, such as diapers, car seats, and pre-prepared meals, should be permanently exempt from the GST.
Permanent sales tax relief is more than doable. The feds could deliver on it without hiking the deficit by taking a sledgehammer to the more than $40 billion a year they hand out in corporate welfare.
Anything less than a permanent sales tax break simply won’t cut it when it comes to cutting costs for Canadians.
Business
US Expands Biometric Technology in Airports Despite Privacy Concerns
Biometric systems promise efficiency at airports, but concerns over data security and transparency persist.
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Biometric technology is being rolled out at US airports at an unprecedented pace, with plans to extend these systems to hundreds more locations in the coming years. The Transportation Security Administration (TSA) is driving a significant push toward facial recognition and other biometric tools, claiming improved efficiency and security. However, the expansion has sparked growing concerns, with privacy advocates and lawmakers voicing concerns about data security, transparency, and the potential for misuse of such technology.
US Customs and Border Protection (CBP) has already implemented its Biometric Facial Comparison system at 238 airports, including 14 international locations. This includes all CBP Preclearance sites and several major departure hubs. CBP says its Biometric Exit program is rapidly gaining traction, with new airport partners joining monthly and positive feedback reported from passengers.
Meanwhile, the TSA has equipped nearly 84 airports with its next-generation Credential Authentication Technology (CAT-2) scanners, which incorporate facial recognition. This rollout is part of a broader effort to bring biometrics to over 400 airports nationwide. These advancements are detailed in a TSA fact sheet aimed at building public awareness of the initiative.
Opposition and Privacy Concerns
Despite assurances from TSA and CBP, critics remain skeptical. Some lawmakers, led by Senator Jeff Merkley, argue that the TSA has yet to justify the need for biometric systems when previous technologies already authenticated IDs effectively. Privacy advocates warn that the widespread use of facial recognition could set a dangerous precedent, normalizing surveillance and threatening individual freedoms.
The debate is closely tied to the federal REAL ID Act, introduced two decades ago to standardize identification requirements for air travel. As of now, many states have failed to fully implement REAL ID standards, and only a portion of Americans have acquired compliant credentials. Reports indicate that fewer than half of Ohio residents and just 32 percent of Kentuckians have updated their IDs, even as the May 7, 2025, deadline approaches.
Biometric Adoption on the Global Stage
Beyond the US, biometric systems are gaining momentum worldwide. India’s Digi Yatra program has attracted 9 million active users, adding 30,000 new downloads daily. The program processes millions of flights while emphasizing privacy by storing data on users’ mobile devices rather than centralized databases. Plans are underway to expand the program further, including international pilots scheduled for mid-2025.
While biometric technology offers alleged benefits, such as faster boarding and enhanced security, it also poses serious risks. Privacy advocates caution against unchecked implementation, especially since, one day, this form of check-in is likely to be mandatory.
The TSA’s aggressive push for biometrics places the United States at the forefront of this global shift.
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