Removing all tariffs on goods entering Canada would boost economic growth, lower prices, attract investment and position Canada as a centre of trade activity, a new report says.
The report, published by the Canadian Council of Chief Executives (CCCE), estimates that eliminating tariffs would generate $20 billion a year in economic activity, equivalent to a 1% increase in Canada’s GDP. That amount is five times greater than the total revenue collected by the federal government each year in duties.
Titled “Should Canada Unilaterally Adopt Global Free Trade?” the report was written by Dan Ciuriak, former Deputy Chief Economist at the Department of Foreign Affairs and International Trade (DFAIT), and Jingliang Xiao, a Vancouver-based economic researcher.
The study points out that manufactured goods are typically produced with inputs sourced from a variety of countries. Eliminating tariffs on imports would reduce the cost of those inputs and therefore make Canadian companies more competitive. This in turn will allow firms to expand their operations, export more and ultimately hire more Canadians.
More jobs and lower prices on imported goods will make all Canadians better off and will build an even stronger, healthier Canadian economy.
“Unilateral tariff elimination would propel us forward toward a more productive and technologically advanced industrial base, raising Canada’s overall standard of living,” the report says.