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Toronto, University of Toronto Press, c1983.
Ontario Economic Council Research Studies.
560pp, paper, $25.00.
ISBN 0-8020-3401-2.

Reviewed by Thomas F. Chambers.

Volume 12 Number 2
1984 March

Federalism and the Canadian Economic Union is a thorough, well-edited book about barriers to free trade in Canada. To make the book as useful as possible, essays from a variety of disciplines such as law, economics, and political science have been included.

There are four sections. Part one deals with theories about Canada's economic union and various ideas about barriers to trade imposed by our federal system of government. While the three articles in this section will be of interest to students of economics, they will be of little value outside the seminar room. The ideas presented are too inconclusive to be of any practical use. They do, however, provide a basis for the second section where concrete facts about the Canadian economy are given.

Part two, entitled "Evidence," deals with the barriers to internal trade in Canada caused by provincial and federal policies. One article by John Whalley, an economist at the University of Western Ontario does an excellent job explaining how and why our governments interfere with Canada's market economy. It also analyses the dollar volume of inter-provincial trade on a province-by-province basis. Ontario and Quebec, for example, account for roughly fifty per cent of imports from the rest of Canada and produce some sixty-five per cent of inter-provincial exports. While one would assume these provinces would dominate our internal trade, it is useful to have the exact amounts spelled out.

The third section of the book is an attempt to examine economic policies as they are practised by governments in other economic unions. The first chapter discusses the procurement policies of governments in the European Economic Community, the state governments in the U.S.A., and the countries who signed the General Agreement on Tariffs and Trade. The sixth chapter discusses provincial barriers to the mobility of people and capital. There are some serious restrictions to personal mobility between the provinces, but no data regarding how many people are affected is available. Provincial policies analysed as barriers to trade are government procurement policies, transportation regulations, agricultural policies, liquor policies, and retail sales taxes.

The fourth part of the book provides a summary and proposes some conclusions from the vast array of information presented. The editors conclude that there is no simple way to improve our economic union. There will likely always be some inefficiency because the issues are too complex to be solved. Similar inefficiencies exist in other economic unions such as the United States and the European Economic Community. Politicians know that they exist but lack the power to do much about them.

Federalism and the Canadian Economic Union is a valuable addition to the growing body of Canadian economic literature. It is, however, too specific to be of much interest to the non-specialist.

Thomas F. Chambers, Canadore College, North Bay, ON.
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