As Canada’s two most populous provinces, Ontario and Quebec have long had a strong economic relationship. The largest interprovincial traders in Canada, trade amongst the two provinces makes up 40% of all of Ontario’s interprovincial trade, and 60% of Quebec’s.
Small-and-medium-sized enterprises (SMEs) are strong contributors. A whopping 215,000 small- and medium-sized businesses currently conduct business between both provinces.
According to the latest report from CFIB, Ontario and Quebec: Unlocking an economic corridor for SMEs, there’s even more room to grow. Two-in-five small businesses across both provinces express a desire to sell more goods or services across provincial borders. With such eagerness among SMEs to expand and access new markets, the Ontario and Quebec governments must work together to reduce barriers to interprovincial trade and labour mobility and tap into all that economic potential.
The place to start for Ontario businesses is bridge the language gap. Nearly half (47%) of businesses in Ontario intending to operate in Quebec report that language is the top barrier. One in five Quebec business owners find language barriers to be an obstacle to conducting business in Ontario.
Both provinces should work in collaboration with the federal government to provide support for business owners who lack the necessary language proficiency to conduct business in the other province. Developing language training programs for businesses and offering translation services in key sectors can be great steps to enhance businesses’ communication, allowing them to facilitate transactions and form partnerships.
Another major barrier is the complexity of provincial rules and regulations between the two provinces-, 19% in Ontario, but only 4% in Quebec. Reducing the overall regulatory burden, and streamlining regulations where possible, can allow more businesses to increase investment and access new markets across provincial borders.
One area that deserves particular attention on the red tape side is labour mobility. It is crucial that both provinces recognize the role labour mobility plays in enhancing interprovincial trade. In Quebec, 19% of businesses cite lack of necessary labour as a major barrier to interprovincial business expansion. Labour shortages are hindering economic recovery in both provinces, with over 1-in-3 (36%) Quebec SMEs and 27% of Ontario SMEs reporting turning down sales or contracts due to labor shortages. They remain a major concern for over three-in-four small businesses in Ontario (76%), and an alarming 90% in Quebec.
To help improve labour mobility, both governments should look to mutually recognize occupational certifications. Often, occupations governed by provincial or territorial legislation mandate workers to hold certifications or licenses specific to the province they operate in, even if they are already certified in another province. Mutual recognition would allow workers to start working sooner while eliminating duplicative training.
Disparity between workers’ compensation boards’ rules in different provinces serves as another impediment to both businesses and labor mobility within Canada. Mutual recognition of workers’ compensation registration standards between Quebec and Ontario would be a great way to reduce red tape and enable workers of businesses registered in one province to work in the other. Mutual recognition of workers’ compensation registration has strong support among SMEs in both Ontario (74%) and Quebec (69%).
Many opportunities exist for Ontario and Quebec to enable businesses to more actively participate in trade and expansion across provincial borders. As two key economic powerhouses, Ontario and Quebec have the opportunity to lead the charge and set examples for other provinces to follow. We encourage both governments to resume regular meetings to ensure we are taking advantage of the small business opportunities in the Quebec-Ontario corridor.
