Canadian officials have been complaining about barriers to interprovincial trade since at least 1940. Now, they might finally be motivated to fix that problem for good.
Driving the news: Prime Minister Justin Trudeau will convene Canadian trade, business, and labour leaders at an emergency summit tomorrow where they will devise strategies to increase interprovincial trade and diversify exports in the face of ongoing tariff threats from the U.S.
Catch-up: Trade barriers are the result of decades of provinces regulating industries and trade without consulting each other. Some 600 bodies regulate goods and services on a provincial level, creating varying standards for things like maximum trucking loads and alcohol imports.
- For example, Nova Scotia’s cargo weight limit for trucks pulling two full-sized trailers is 1,000 kilograms lighter than other Atlantic provinces.
Why it matters: The panic over tariffs could secretly be a blessing (hear us out) if it leads to lasting solutions for Canada’s protracted struggle with interprovincial trade. A 2022 study found that axing these barriers could result in a GDP bump of between 4.4% and 7.9% over the long term.
- Economist Trevor Tombe, a co-author of the study, told The Canadian Press that this would come out to a $245 billion increase in Canada’s economy. Not too shabby.
Bottom line: Fixing these issues will likely mean harmonizing regulations — a huge lift, but one that could pay off. A Queen’s University study analyzing a similar move in Western provinces in 2010 found it boosted manufacturing productivity and increased the likelihood of interprovincial exports.—QH