Canada’s premiers and federal officials are pitching cutting interprovincial trade barriers to guard against a looming trade war with the United States, arguing it could boost the Canadian economy by billions of dollars.
The idea gained steam on Wednesday after Prime Minister Justin Trudeau hosted a virtual meeting with the premiers. Trudeau said in a statement there was agreement that “more work is to be done to facilitate internal trade.”
In an interview with CBC News, Internal Trade Minister Anita Anand said removing existing barriers “could lower prices by up to 15 per cent, boost productivity by up to seven per cent and add up to $200 billion to the domestic economy.”
Given the benefits, what are these barriers and why do they exist at all? CBC’s The House spoke to experts and former officials about Canada’s new push to liberalize internal trade and why there’s been slow progress on the issue.
What are provincial trade barriers?
According to a 2019 report from the International Monetary Fund, there are four categories of trade barriers in Canada: natural barriers such as geography, prohibitive barriers such as restrictions on the sale of alcohol, technical barriers such as vehicle weight standards and regulatory barriers such as licensing and paperwork requirements.
Perrin Beatty, a former federal cabinet minister and former head of the Canadian Chamber of Commerce, said he doesn’t think most Canadians know they exist.
“There are barriers to mobility in Canada, in terms of people’s ability to go and find a job in another region. There are barriers to commerce as well, and these are things we’ve been living with since Confederation.”
Ontario Premier Doug Ford said on Wednesday the trade situation — where rules around items like first aid kits and truck tires vary across provinces — “sounds ridiculous and it is ridiculous.”
“This has been going on forever,” Ford said. “Enough’s enough.”
Canada took a step forward on the issue in 2017 when every province, territory and the federal government signed the Canadian Free Trade Agreement (CFTA), which created a formal and binding process to cut down existing trade barriers.
The deal applies to all interprovincial trade, but a detailed list of exemptions was negotiated for each province and territory — many of which still exist today. According to a report from the Montreal Economic Institute (MEI), in 2023 there were a total of 245 exemptions across all provinces and territories.
Carlo Dade, director of trade infrastructure with the Canada West Foundation, said there are good reasons for some provincial regulations, like how Quebec requires snow tires in the winter.
“There are some rules that make sense given geographic, language [and] cultural differences,” Dade said. “But these are exceptions to the wider…
Read More: Canada’s premiers have wanted to scrap internal trade barriers for years.