Reports November 4, 2021

The case for liberalizing interprovincial trade in Canada

Prepared for the Working Group on Interprovincial Trade Barriers

Overview

Regulation

While governments across Canada remain focused on economic recovery from the pandemic, longer-term prospects are more challenging. As progress shifts into the expansion phase of the next business cycle, we face slowing growth—due to prior and continued sluggish business investments—and weak productivity growth.

In the latest federal budget, released in April 2021, the government committed an additional $101.4 billion in spending to stimulate the economy. While most of these measures have been focused on energizing short-term recovery, the budget also included $21 million in federal support to tackle the removal of internal trade barriers. For businesses and industries affected by these restrictions, this is a long-awaited, positive step toward increasing Canada’s competitiveness.

Now, however, the federal government must work to advance much-needed provincial efforts to reduce trade barriers, which will require policy changes and engagement from provincial and territorial governments.