Yesterday was Canada Day, which this year was also the federal government’s promised deadline for achieving internal free trade. Did they get it done? Well, that’s complicated.
What happened: The federal government eliminated all remaining federal barriers to interprovincial trade and recognized provincial regulatory and occupational licensing standards as meeting federal requirements.
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That technically fulfills the promise Mark Carney made during his election campaign to remove “all federal exemptions under the Canada Free Trade Agreement.”
Yes, but: Just because federal barriers to interprovincial trade are gone doesn’t mean Canada now has internal free trade. Many obstacles still remain at the provincial level, where regulations governing building codes, safety standards, and business licensing are still inconsistent.
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On that front, some progress is being made — many provinces are passing laws to mutually recognize other provinces’ regulations. B.C., Alberta, Saskatchewan, and Manitoba have had a similar arrangement since 2010.
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These agreements do still come with exceptions (don’t even think about buying wine from an out-of-province vineyard), and don’t harmonize laws between provinces, which can make operating in different jurisdictions challenging for businesses.
Why it matters: Tearing down internal trade barriers would boost Canada’s economic growth by anywhere from 3% to 8% per year, depending on which studies you believe. But despite recent progress there’s still a long way to go before Canada can truly claim to have one, unified market.—TS