Jay: I don't know if you heard, but Canada is in a trade war with the United States. And that's led to a lot of talk about relying less on the Americans and doing more business here at home. But there's a problem. Sometimes it's easier to do business with the US than it is with another Canadian province. Take BC wine. Why is it so difficult to buy BC wines here in Ontario? The answer is interprovincial trade barriers.

And leaders have said they want to break them down. Back in July, nine premiers, including Doug Ford, signed an agreement that'll make it easier to buy alcohol from different provinces. But how far have we actually come? And what barriers still remain? Also, in July, there was another big announcement, a proposed new oil pipeline connecting Alberta oil to Ontario, bypassing the current route through the United States.

Doug Ford: It's a win-win-win. A win for Ontario, a win for Alberta, and a win for all of Canada.

Jay: Is there a solid business case for the Northern Shield Energy Corridor? Who would pay for it? And is it even necessary? I'm Jay Jagannathan. Welcome to The Rundown.

Okay, let's start with trade barriers. With the announcement in July around alcohol, that's one barrier down, but there are plenty more. As the trade war with the US heats up, what should Canada and the provinces be doing to get rid of the rest, including measures that would make it easier for professionals to work in other provinces?

Ryan, Sarah, great to have you in our studios to talk about this very important topic. Ryan, I'm going to come to you. You wrote "Booze, Cigarettes, and Constitutional Dustups: Canada's Quest for Interprovincial Free Trade". That was 5 years ago. Fast forward now, nine provinces have agreed to at least cross off one of those: loosen alcohol sales. Why do you think, what made this agreement sort of happen where we've got direct to consumer and we've got trade between provinces when it comes to alcohol?

Ryan Manucha: For whatever reason, Canadians determine the health of internal trade based on the flow of booze across provinces. The big moment that happened in 2012 was when Gerard Comeau came back from Quebec into New Brunswick with beer and was stopped by the RCMP at the New Brunswick border and fined. That made its way all the way to the Supreme Court of Canada.

And so, ever since then, the public has really associated the free flow of booze with free internal trade. And premiers know that there is that public appetite, and so they figured this is a great area where they can get a quick win, show goodwill between the provinces.

Jay: Okay. We have seen the provinces' premiers and ministers have a very busy summer with meetings trying to ease trade barriers, make it easier. I want to know, Sarah, from you, what other policies or areas would you like to see barriers being addressed?

Sarah Goldfeder: When they start to have those conversations and it becomes what's good for the country, that's really when you start to have hope that we're also going to see all of the systems that underlie doing business in Canada connect to one another.

Jay: Is there anything specific that you're seeing that you're like, you know what, this is a conversation that we should have been having perhaps before Donald Trump got involved, but it's glad that we're having it now?

Sarah Goldfeder: Sure. Well, I mean, I think probably the major project that is sort of top of mind for me is how do we get oil out of Alberta? And so as soon as you start talking about pipelines, it gets very tricky. But I think that the premiers in their meetings this summer started to establish a real understanding around major infrastructure.

And that you can't, in infrastructure, any individual province isn't going to get all of the pieces of the puzzle that they want. They're going to have to work with each other and they're going to have to work with the federal government to make things happen.

Ryan Manucha: Labor mobility, the rallying cry that we've got 30-day service standards for Canadians to move from one province to another with their credentials. Every province got behind it and now it's been a pan-Canadian commitment.

The real question is, what are those professions? And will that 30-day standard actually be met in practice?

Jay: What are we talking about in terms of professions just with those?

Ryan Manucha: We're talking about health care professionals. We're talking about skilled trade workers. Two groups that are in high, high, high demand in pretty much every single province. And so we want to make sure that those individuals can move to where they are needed.

Jay: Okay. Sarah, Polytechnics Canada is an umbrella group, and they said that almost 700,000 skilled jobs will be in demand in Canada over the next 10 years. Will Canada's workforce be able to meet that?

Sarah Goldfeder: I think that the easy answer is not as it is, right? We just don't have enough people in this country to do all of the things that we want to do. And so that's where I think that idea around labor mobility really hits the road.

If Ontario is building out massive nuclear projects, they need people to construct those.

Jay: And Alberta?

Sarah Goldfeder: And Alberta has major projects. And so when the projects are completed, people need to be able to move to where the next project is.

Jay: Don't want to put you on the spot there, but do we know the gaps in terms of private industry? In terms of gaps as well when it comes to those kinds of trades?

Sarah Goldfeder: So if you think just about pick just just one piece. So pipefitters, plumbers, electricians, people who are retiring out of those trades, there's a big gap in terms of bringing people into those trades.

And so if you've got extra electricians in Alberta and you don't have enough in Ontario, but Ontario says, well, your certification doesn't match my certification, you have to recertify. That's a huge problem.

Jay: Private industry? In terms of gaps as well when it comes to those kinds of trades?

Sarah Goldfeder: People stay in the jobs. If we think about business investment in Canada, we have productivity challenges in this country because businesses aren't necessarily investing in the kind of equipment and the kind of updates they need.

And when they don't do that, they don't necessarily demand the kind of high-skilled labor that they might otherwise. So it's not just a labor issue, it's also a business investment issue.

Jay: Okay. When you're thinking about infrastructure, one thing that is often cited is trucking.

Sarah Goldfeder: I think trucking is actually another point where we say, look, you've got different rules in different provinces for how big a tire can be, how much weight a truck can carry.

And if you're driving a truck from BC to Ontario and you have to change your tires or change your load, that's a problem.

Jay: Right. And right to the consumer. You could, yeah, you could talk about all kinds of small technical barriers.

Ryan Manucha: Right. And there are all of these hidden non-tariff barriers. When you look at trucking, for instance, the required height of anti-sail splash guards differs from province to province. If you look at oversized loads, the thresholds for when you need an escort vehicle differ across provinces.

And so that means that you can be driving along and suddenly you cross a provincial border, and you're no longer in compliance unless you have a completely different set of permits and configurations. It's a massive drag on our internal market.

Sarah Goldfeder: Well, you know, the Red Seal trades are designed for labor mobility. They're designed to set a national standard.

The problem is that individual provinces then layer on top of that their own licensing bodies and additional certification requirements.

Ryan Manucha: Then you could definitely use a framework that allowed for mutual recognition, where if you are certified in one province, you are automatically recognized in another.

Jay: Is this something that will take time in terms of building that trust between provinces?

Sarah Goldfeder: It does take time. Let's use AI, let's look at the regulations across provinces and see where the actual gaps are.

But ultimately, it requires regulatory bodies in each province to be willing to cede some of that local control and come to an agreement.

Jay: I will come back to that point. A very important one. Ryan, when businesses look at selling across provincial borders, what's their biggest concern?

Ryan Manucha: Oh yeah, they're going to want to know if they're selling into another province, are they suddenly subject to different tax reporting, different environmental levies, or different packaging and labeling rules?

The compliance costs are so high that small and medium-sized businesses often just give up and either stay local or export to the US instead.

Jay: Has there been any movement? Is there any movement on harmonizing these rules?

Jay: Where are we on that? Is there any movement? I'm imagining the finance ministers were discussing this over the summer.

Ryan Manucha: I have to give credit actually to the Minister of Finance and several proactive provinces. The federal government is trying to operationalize an internal trade office and use federal transfers as incentives for provinces to drop their specific exemptions.

But as long as the Canadian Free Trade Agreement contains hundreds of pages of negative lists and party-specific exceptions, true free trade will remain an uphill battle.

Jay: All right, Sarah, labor mobility only matters if workers actually want to move. But when families consider moving, housing, health care wait periods, and schooling become major obstacles.

Jay: What does it mean for their schooling?

Sarah Goldfeder: I went through school where I actually changed schools in the middle of the year a couple of times. It's not an easy thing to do. People are making decisions based on personal factors and professional factors.

And I think that all governments really can do is make sure that the systems are as smooth and easy to navigate as possible, because people have to navigate their family stuff on their own.

Jay: All right, Sarah, Ryan, I really appreciate your time. Thank you so much for this.

Sarah Goldfeder: Yeah, thank you so much.

Jay: Removing trade barriers isn't the only idea being pitched as the way to make Canada less reliant on the United States. Premiers Danielle Smith and Doug Ford have announced a proposal for an east-west oil pipeline running from Hardisty, Alberta to Sarnia, Ontario. Now, the idea is to move more Canadian oil across the country without it having to travel through the United States. The premiers are calling it a nation-building project, but the cost could be close to $100 billion. There are still some details to be worked out like who would pay for it.

So, we want to learn a little bit more about oil and gas in the Canadian context. We come to a few people. Rory, you are one of them. Great to have you here. How are you doing?

Rory Johnston: I'm doing well. Thanks for having me back.

Jay: When a lot of people heard about the Northern Shield Energy Corridor, they probably thought, don't we have one of those already? Or something similar. There's Line 5. It supplies refineries in Sarnia, Ontario. We're talking half a million barrels per day. Runs from Alberta through Wisconsin to Michigan. How important is Line 5? Give us context here for those refineries in Sarnia, but also for the consumers in Ontario who buy refined products.

Rory Johnston: Yeah. So, I think one of the things that surprises a lot of people is that Ontario actually gets the vast majority of its oil, its crude oil for its refineries from Alberta. It's just that those barrels travel through the United States first before getting back into Ontario. And this is obviously an issue with the trade war and everything else.

But essentially how it works, Line 5 is part of Enbridge's mainline pipeline, which is the single largest conduit for Canadian oil exports out of Western Canada, largely into the Midwest, and then travels back north into Ontario for this Line 5 spur. And another pipeline takes those barrels further up towards Quebec. But without that Line 5 pipeline, which Michigan has consistently worked to dismantle or block, Sarnia and the Chemical Valley and all that petrochemical industry in southern Ontario would be suddenly short of convenient feedstock for the refineries.

Jay: Okay, convenient I guess is the key word here. Does this proposal from Premier Danielle Smith and Doug Ford suggest that there is genuine concern that the future of Line 5's pipeline is perhaps up in the air?

Rory Johnston: I think so. And I think that what we've experienced first with Line 5, and this has been going on for years and years well before Trump's second term. But that was always a concern. Ottawa and Washington actually worked together, and Washington actually sided with Ottawa against Michigan, citing an international treaty that governs this pipeline.

So the concern was still there because all of a sudden we went from a state where in Western Canada it was always "we need to build more pipelines", to suddenly worrying about defending your flank, that the actual pipelines in the ground weren't even safe. And I think the trade war and the rise in animosity between Washington and Ottawa has just been the cherry on that sundae.

Jay: And some added context here. This is a fairly old line. We're talking 70 plus years. Michigan's Governor Gretchen Whitmer had once campaigned to have it removed, even calling it a ticking time bomb. So give some context: what happens in Ontario and beyond if Line 5 is shut down?

Rory Johnston: So essentially if you lose access to this pipeline, I mentioned convenient, there are theoretically other ways of getting oil to southern Ontario: trucks, trains, ships up the St. Lawrence.

Jay: Sounds very expensive.

Rory Johnston: Exactly. Convenience is money. And I think at the end of the day, if you have more expensive feedstock, your facilities are going to make less money. That money is going to go elsewhere, likely outside of the country. And it means the economics of those facilities will be challenged, potentially threatening their future closure if the economics don't work long term.

Jay: All right, I want to look at a map. This is of the Line 5 pipeline that we were talking about. It is in blue. As we talked, it's only about 1,000 km long, but connects to much longer mainline systems that run through western Canada and the US. Above that in purple is the Northern Shield proposal. This would go from Hardisty, Alberta to Sarnia. It's about 3,300 km long. Quick, simple: what are the pros and cons here about the route proposed on the Northern Shield?

Rory Johnston: So, on the route, it follows a very similar route to a pipeline that already exists. Canadians will remember the Energy East pipeline, which basically follows a very similar type of path. Energy East was going to go all the way to the East Coast to Saint John to enable Atlantic exports. But this pipeline particularly, at least in the first stage (the 500,000 barrel a day stage), is going to go directly south back down to Sarnia.

The advantages are energy security of supply. Basically, without this pipeline, we could theoretically any morning wake up and Line 5 has been closed either by presidential edict or something in Michigan. Having your energy sovereignty outside your country is a challenge.

When the TransCanada Mainline gas pipeline was proposed, industry wanted it to go south through the Midwest and Chicago because it was more economical. The exact same arguments were applied to the transcontinental railway. But C.D. Howe, and before that John A. Macdonald, pushed both of those projects to be all within Canadian territory, because without that we're essentially beholden to potential capriciousness by the United States. While that didn't seem like an issue for decades, all of a sudden it sounds extraordinarily prescient.

Jay: Interesting. All right, let's talk cost because I think that's a big one. Also, I know this is just in its proposal stage. Whether this actually gets shovels in the ground, who knows? But cost, time, and who's paying for this?

Rory Johnston: Those are great questions. The con is the cost, and I think this is the challenge: it's particularly difficult to justify the cost given that there's already pipeline service.

Jay: What are we talking about?

Rory Johnston: It's hard to know exactly, but we're probably talking 10, 20, 30 billion. The last big pipeline we built to the West Coast, you know, we're talking $30-plus billion. I think at the very baseline, that should be our cautious, conservative assumption.

Rory Johnston: There's not a lot of information on this pipeline available yet, very early preliminary stage. But the challenge with that high cost and the fact there's already a pipeline servicing essentially the exact same route... this is why it would be very difficult to get a private sector company to spearhead this, because the main benefit is strategic for Canada and it's essentially an insurance policy against future tomfoolery south of the border. But that's a difficult case to make to shareholders. This is why if this pipeline is going to be built, it would likely have to be a combination of Ottawa, Ontario, and Alberta.

Jay: Potentially taxpayers are subsidizing this.

Rory Johnston: Correct.

Jay: All right. Help me understand sort of the best owners in this. We learned from pipelines out west, but who would be the best owner of something like this?

Rory Johnston: Frankly, I actually do think that if it is going to exist—and I think there's a strong case for it to exist—it needs to be government-owned. If you think about it, all of a sudden coming short 500,000 barrels a day of oil (somewhere in the ballpark of a quarter of Canada's total consumption) would be very damaging and volatile for the Canadian economy, and devastating for industry in southern Ontario.

Managing that risk is something where there really isn't a commercial incentive. In the same way that you're not going to have the private sector foot the bill for the military, it's essentially a security policy. That's where the government has to step in.

Jay: As we look through that map, it is going through a few provinces. Manitoba Premier Wab Kinew talked about consultation, having Indigenous people at the beginning of this conversation, not at the end. Is that something that will impede this if it decides to go forward?

Rory Johnston: I would say the benefit here is that the federal government is increasingly experienced with this kind of consultation. While that experience has not always been gleaming and good, a lot of lessons have been learned about how to do it better.

When it comes to provincial opposition, as we've seen in the case of British Columbia with the West Coast pipeline, that was eventually ameliorated by negotiations and policy incentives from the federal government.

Jay: Well, we talk about taxpayers. Do you think the decision to build the Northern Shield will find much support among the public?

Rory Johnston: When you frame it as a taxpayer subsidy, that's always going to be unpopular. But when we frame it as leverage and defense against potential US overreach and power, that's very politically popular right now for a plethora of obvious reasons. If pitched correctly, I think it can find the political support it needs.

Jay: I know that this is a bit of a wakeup call for us Canadians to not take our trade relations with the US for granted. But there is the argument that this pipeline is going to take a while, and that guy down south probably won't be here to see it through. Is that a reason to maybe hold off?

Rory Johnston: There is a strong reason in that argument. The challenge is that what we've seen, particularly within the Republican Party south of the border, is a general trend towards more antagonistic attitudes towards Canada. While Donald Trump as an individual has been uniquely damaging, it is not a sole individual pushing this. It could be a sign of things to come. And to your point, it takes a long time, so if we're going to do it, sooner than later is when we need to do it.

Jay: Rory, I appreciate the context. Thank you so much.

Rory Johnston: Thanks for having me.

Jay: Canada is talking a lot about becoming less economically dependent on the United States. So, how do you feel about buying Canadian, especially with the US recently changing the name of a certain lake? I know that ruffled some feathers. Have you changed how you shop to make sure you're getting stuff from Canada? Send us an email at rundown@tvo.org or drop us a comment and let us know what you think. Until then, we'll see you tomorrow.