Ontario Premier Doug Ford speaks during a meeting of Canada’s premiers in Huntsville, Ont., in July.Nathan Denette/The Canadian Press
Despite their enthusiastic platitudes, Canada’s provincial leaders continue to drag their heels on eliminating key interprovincial trade barriers. They make splashy announcements, but behind the scenes, they are too often moving in the opposite direction.
The Nov. 19 announcement that the federal, provincial and territorial governments signed a mutual recognition agreement is a case in point. The deal is a significant move forward as it means that starting in December, goods approved to be sold in one province or territory can be sold in the rest of the country without additional requirements.
Yet the day after the signing, Ontario’s Progressive Conservative government announced its new Buy Ontario Act will also take effect next month. It will force all public sector organizations, including municipalities, ministries and contractors, to prioritize buying goods and services from Ontario businesses. While this is a boost for local companies, it’s inefficient in the long run, as it can lead other provinces to adopt similar procurement policies that limit competition. It also prevents the public service from purchasing better or cheaper products from other provinces.
Overall, progress is being made to reduce regulatory barriers that make it hard for businesses to operate outside their home provinces, yet there is still reluctance from premiers and provincial regulators to fully open up their fiefdoms to goods and workers from across the country. Eliminating Canada’s internal trade barriers is an important way to boost the economy and help counter the harm of U.S. tariffs.
The federal government deserves credit for providing leadership by eliminating its own barriers to interprovincial trade and pushing the provinces to eliminate theirs. Progress has also been made on trucking – a pilot mutual recognition agreement has eliminated nonsensical situations, such as requiring truckers to stop at provincial boundaries to change their signs, lights or flags to fit local requirements. A June agreement between the premiers to recognize the credentials of out-of-province professionals within 30 days will help labour mobility.
But despite much chatter about liberalizing rules around alcohol, not much progress has been made on that front. The provinces did sign a memorandum of understanding to allow consumers to order alcohol from other provinces next year, yet there are still significant hurdles for beer, wine and spirits producers that want to sell in stores in other provinces. The headache of submitting paperwork, getting new lab tests, and changing labelling scares many producers off. A recent walk through a provincially owned liquor store in Toronto revealed endless rows of Ontario wine, but not a single bottle from B.C. or Nova Scotia.
An employee moves products in a LCBO store at Union Station in Toronto, in March.Laura Proctor/The Canadian Press
Food is another key area that’s been left behind. Manufacturers wanting to sell food across provincial boundaries need to be licensed and certified through the Canadian Food Inspection Agency. This led to the absurd situation where in the city of Lloydminster, which straddles the Alberta-Saskatchewan boundary, deli sandwiches made at a grocery store on the Alberta side couldn’t be sold at the store’s gas bar on the Saskatchewan side.
An exemption to these rules, which the federal government put in place for Lloydminster in November, 2024, could be expanded to other parts of the country. Supply management, which carves dairy and poultry markets into heavily regulated provincial silos, also limits farmers from selling in other provinces.
The premiers can streamline their rules by fully opening their doors to all businesses and workers across Canada, rather than a patchwork of one-on-one deals. The provinces should also make it easier for out-of-province businesses to navigate workers’ compensation, occupational health and safety, and sales tax rules. The elimination of supply management, or at the least, allowing farmers greater flexibility to sell goods between provinces, is another needed reform.
A renewed push is needed for Canada to drop its parochial habits and allow commerce and labour to move freely inside the country. Yes, there will be pushback from some local companies that have been protected from competition, and weaker businesses may suffer.
But opening up internal boundaries will help nimble and innovative companies thrive, boost to economic growth, and provide consumers with access to more products and lower prices. Canada has made progress on lowering internal barriers. It’s time to finish the job.