Tear down our internal trade barriers

By Lethbridge Herald on March 3, 2025.

TROY MEDIA – EDITORIAL BOARD

Canada’s economy is being strangled—not by foreign competitors, but by our own provinces. Interprovincial trade barriers, regulatory inconsistencies, and protectionist policies bleed billions from the economy annually.

This self-inflicted wound demands urgent action—especially in light of former U.S. President Donald Trump’s tariff threats, which exposed Canada’s dangerous reliance on a single foreign market. Experts estimate that breaking down these barriers could boost Canada’s GDP by as much as seven per cent—adding up to $130 billion annually to the economy.

But there is hope. Nova Scotia has taken the lead in breaking down these costly barriers. The province recently announced the elimination of registration requirements for out-of-province companies and is working toward full mutual recognition of professional credentials. By cutting red tape, Nova Scotia is showing that meaningful reform is possible—and that other provinces have no excuse for inaction.

At a webinar hosted last month by The Centre for Innovation Studies (THECIS), experts from some of Canada’s top policy institutes dissected the problem and its solutions. Trevor Tombe, an economist at the University of Calgary, warned that regulatory clashes in interprovincial trucking alone cost the economy $1.6 billion annually. “This is death by a thousand cuts,” added Carlo Dade, director of the Trade and Investment Centre at the Canada West Foundation, who argued that mutual recognition of provincial standards—similar to the EU and Australia—would break down these costly barriers.

The potential gains are staggering. The Bank of Canada and C.D. Howe Institute estimate that eliminating internal trade barriers could grow Canada’s GDP by up to seven per cent—equivalent to $130 billion annually, a figure that dwarfs the benefits of most international trade agreements. Consumers would see the difference, too: the C.D. Howe Institute projects that reforms could save Canadian households up to $5 billion annually through lower prices and increased competition.

But it’s not just the economy suffering—the courts have failed to uphold free internal trade. Ryan Manucha, a research fellow at the C.D. Howe Institute, pointed to the Supreme Court’s Comeau decision, where a New Brunswick resident was fined for bringing beer across provincial lines. The ruling upheld provincial powers to block interprovincial commerce, weakening Section 121 of the Constitution, which was intended to guarantee free trade within Canada. “The Comeau ruling shows that courts won’t solve this—only political leadership can,” said Tim Sargent, a senior fellow at the Macdonald-Laurier Institute and former deputy minister of international trade at Global Affairs Canada.

This judicial failure is mirrored in other critical areas, such as labour mobility, where outdated regulations stifle opportunity. Manucha argued that Australia’s approach—where workers can transfer their credentials nationwide within 30 days, although the actual timeframes can vary depending on the occupation and the specific regulatory authority involved—offers a solution. He warned that Canada’s fragmented credentialing systems are worsening the labour shortage in critical sectors like health care and construction. “We are choking our health care and skilled trades markets with red tape,” he said. A national mutual recognition framework would let Canadian workers practise across provinces without redundant licensing, creating thousands of jobs and meeting labour demand where needed most.

Despite the federal government’s inaction, some provinces are making progress. The New West Partnership between Alberta, British Columbia, Manitoba, and Saskatchewan has slashed barriers and boosted economic growth. And now, Nova Scotia has stepped forward, becoming the first province in Atlantic Canada to tackle these restrictions head-on. If more provinces followed suit, it would pave the way for a national framework that could finally unlock Canada’s full economic potential.

Dade urged Ontario to take the next step, which would bring 70 per cent of Canada’s GDP under a unified framework. “Ontario’s participation is crucial,” Dade insisted. “This is about national prosperity, not provincial politics.”

Reforms, however, won’t be painless. Some industries will feel the squeeze from increased competition. To address this, Dade proposed a federal trade adjustment assistance program, similar to those offered during international trade shifts, to support workers and businesses through the transition.

Canada’s interprovincial trade barriers are more than an economic nuisance—they are a national failure. As Dade bluntly stated: “If we can sign trade deals with Europe and Asia, why can’t we trade freely within our own borders?”

With global trade volatility on the rise, fixing Canada’s internal market is no longer optional—it is essential for economic security. As Trump-era tariffs show, Canada cannot afford to rely on a single trading partner. A robust internal market will insulate the economy from future external shocks.

Nova Scotia has proven that reform is possible. Now the rest of Canada must follow.

The time for half-measures is over. Eliminating these barriers could add $130 billion to Canada’s economy, save households billions annually, and unleash job growth. The time for action is now.

The views, opinions and positions expressed by Troy Media columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of Troy Media.