The great provincial obstacle course

LAST year Don Dean, a logistics expert, set out to solve a mystery: why were oil and mining firms in Alberta buying heavy equipment from Asia, landing it in United States ports and bringing it in by motorway rather than using suppliers in Ontario? The answer, he discovered, is bureaucracy. Lorries carrying heavy loads in Canada need permits from each provincial government, municipality and utility company along the route. Ontario can take 27 weeks to issue one, says Mr Dean, who works for Prolog Canada, a consultancy. The journey on American roads requires just one licence.

Canada’s constitution of 1867 mandates the free flow of commerce across the country. But leaders of the ten provinces and three territories have spent 149 years inventing creative ways to favour local firms or issuing regulations that unintentionally snarl trade through sheer complexity. Some are mere nuisances: lambs’ heads are thrown out by federally licensed slaughterhouses but given back to the farmer for sale in some provinces (they are a delicacy in some cultures). Other impediments loom larger. Canada lacks a single securities regulator; production of milk must be matched to local consumption; the sale of alcohol is reserved for provincial monopolies. Twelve regional regulators license engineers. Canada’s internal market for goods and services is less integrated than that of the EU, concluded Alicia Hinarejos, of the University of Cambridge, in a study in 2012.