In response, the Ontario Chamber of Commerce, along with many other provincial chambers, has renewed its call to remove interprovincial trade barriers.
With the U.S. being Canada’s largest trading partner and thousands of Canadian jobs relying on the American economy, it is crucial to look inward and mitigate potential risks associated with a trade war. The pause in tariffs has forced Canada to rethink its trade strategy, leading to efforts to strengthen relationships with European and other global partners. Amidst these shifts, calls to eliminate interprovincial trade barriers have gained momentum, as doing so could add an estimated $200 billion to annual GDP.
The debate over interprovincial trade barriers has persisted for decades, but recent U.S. trade policies have intensified the urgency. While removing these barriers may not replace Canada’s trade relationship with the U.S., experts argue that it is a crucial step toward economic resilience. This edition of Voice of Business will examine the impact of interprovincial trade barriers, current restrictions between provinces, and the future of interprovincial trade and its benefits for businesses.
Interprovincial trade barriers create inefficiencies in multiple industries, including product sales, trucking regulations, and labour mobility (licensing and certification requirements). One of the most well-known examples is alcohol sales. Each province has its own regulations for selling alcohol, making it difficult for businesses to operate across borders. These barriers increase compliance costs and reduce business opportunities.
For instance, in Quebec, only the provincial alcohol corporation, Société des Alcools du Québec (SAQ), has the legal authority to import alcohol. Even individuals bringing alcohol into Quebec must file an online declaration form, regardless of whether the alcohol is a gift or personal purchase. This creates significant hurdles for Ontario businesses trying to expand into Quebec.
Another major barrier is trucking regulations. Different provinces impose varying restrictions on truck weights and loads, limiting the ability of businesses to transport goods efficiently. For example, Nova Scotia enforces strict weight limits, restricting certain types of cargo from entering the province. Additionally, direct-to-consumer shipping alcohol is restricted in several provinces, further complicating interprovincial commerce. While these regulations are often intended to protect local businesses, they ultimately hinder economic growth and business expansion.
The federal government has acknowledged these challenges and has expressed its commitment to addressing them. However, because trade regulations fall under provincial jurisdiction, the responsibility lies with the provinces to harmonize rules and ease restrictions. Some progress has been made. In 2017, the federal, provincial, and territorial governments signed the Canadian Free Trade Agreement (CFTA), committing to reducing trade barriers. In early 2024, agreements were approved for 17 of the 30 restricted sectors, but key barriers remain. Provinces have taken independent steps, such as Alberta and British Columbia reducing alcohol trade restrictions and the Atlantic Growth Strategy (launched in 2016) harmonizing licensing requirements for skilled trades.
With new U.S. tariffs on steel and aluminum already in place and more expected in early March, Canada must act quickly to support businesses. By removing interprovincial trade barriers, businesses can offset some of the negative effects of external trade restrictions and strengthen the domestic economy. Minister of Transport, Anita Anand has suggested that trade barriers could be eliminated within a month if provinces collaborate. However, achieving meaningful progress requires a coordinated effort to streamline trade regulations, standardize trucking policies, and improve labour mobility.
By fostering a truly open domestic market, Canada can better support its businesses and ensure long-term economic growth—regardless of external pressures.
