All provinces have taken some steps towards the removal of interprovincial trade barriers. This is a potentially encouraging development and could help offset some of the impact of the Canada U.S.-trade war, according to a report by TD Economics.
However, actions have not been uniform. Ontario has arguably gone the farthest in terms of removing its barriers, followed by Nova Scotia and Manitoba. PEI, and B.C. have also enshrined into law legislation aimed at removing trade barriers. In contrast, Newfoundland and Labrador and New Brunswick have been more deliberate in their approaches, said the report authored by Economist Rishi Sondhi.
While these moves should yield economic gains over time, the scale of the boost could be limited by several factors, including the fact that not all provinces have trade agreements in place, and non-agreement barriers still exist. What’s more, evidence suggests that most firms that trade interprovincially already face no obstacles at all, it said.
“A silver lining flowing from the Canada-U.S. trade tensions is that all provinces have acknowledged the need to enhance their interprovincial trade. And indeed, important steps have been taken, but progress hasn’t been uniform. Recently, federal Bill C-5 has passed, with the intent of removing federal barriers to interprovincial flows of goods, services and labour. However, much of the heavy lifting necessary falls on the provinces. This note assesses where the provinces currently stand in terms of breaking down trade barriers and examines some potential benefits from boosting trade within Canada, including the need to be realistic about the possible gains,” explained the TD report.
Photo: Vincent Albos
“With Canada-U.S. trade tensions simmering, all provinces have taken some steps towards eliminating their interprovincial trade barriers. This is a potentially welcome development that could help offset some of the negative impacts of the U.S.-Canada trade war,” added the TD report.
“Some provinces have gone further than others, with Ontario, Nova Scotia and Manitoba arguably pushing the furthest. However, PEI and B.C. have recently signed legislation aimed at enhancing trade. On the opposite end, New Brunswick and Newfoundland and Labrador have been more cautious. Quebec also stands out in that it’s the one government yet to sign an MoU with any province, but has introduced legislation to make interprovincial trading freer, subject to criteria.
“While gains from interprovincial trade should manifest from these actions, their magnitude will be restricted by several factors, including the fact that not all provinces have trade agreements. Moreover, geographic trade barriers remain, as do others (such as having to navigate complex tax systems). Finally, most firms that trade interprovincially already report doing so obstacle-free.”
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024 and 2025.
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