Canada-U.S. trade needs streamlining and decongestion to break regulatory barriers
July 6, 2011
by Matt Powell
TORONTO—Complex paperwork and varying regulations are the number one obstacle in cross-border trade for small and medium-sized business (SMEs), according to the Canadian Federation of Independent Business (CFIB).
Earlier this year, Canada and the U.S. issued a declaration on the countries’ shared border to streamline and decongest the Canada-U.S. border trade corridor and find ways to prevent regulatory barriers.
Improving the efficiency of the border will reduce the costs of doing business, enhance security and facilitate trade, says Corrine Pohlmann, CFIB vice-president of national affairs.
“A Canada-U.S. border that is more effective, secure and trade-friendly will increase Canadian competiveness and create jobs on both sides of the border,” she says.
CFIB’s policy brief, Border Barriers: SMEs experience with cross-border trade examined 12 small business owners: eight Canadian and four American. The report offers mixed results from Canadian small business owners about their experiences with border agencies on both sides of the border.
“Although the requirements of any one entity may not be unreasonable, it is the combined effects that impede SME participation in cross-border trade,” says Pohlmann.
Jim Milway, executive director of the Martin Prosperity Institute at the University of Toronto’s Rotman School of Management says paperwork shouldn’t impede Canadian SMEs from improving cross-border trade.
“If this is indeed a barrier, then we need to get rid of it,” he says. “I’d be pretty disappointed to know Canadian businesses are letting paperwork get in the way of growth. Successful small businesses have the fire in their bellies to not let anything stop them.”
Businesses can’t expect to become major global exporters simply because we get rid of some of the paperwork, he adds.
While Milway’s sentiment sounds reasonable, combining the current high-valued Canadian dollar, limited cash flows and economically strapped trading partners certainly reduce the incentive for Canadian businesses to navigate complex processes and regulations.