How removing Canada's interprovincial trade barriers and enabling labour mobility can benefit Canadian businesses and workers across sectors

In the face of an everlasting U.S.-Canada trade war, removing interprovincial trade barriers to enable the free flow of goods, services, and labour has become an economic imperative for Canada.

Promising to achieve “free trade by Canada Day,” Prime Minister Mark Carney committed federal action to help “reduce internal trade costs by up to 15% and expand (the) economy by up to $200 billion.” And he’s not alone. In the midst of the federal election, Canada’s Premiers jointly issued a rare statement, agreeing “that now more than ever, reducing trade barriers is a priority.”

Businesses have long been calling on the federal and provincial governments for meaningful action on internal trade. In its 2024 annual report card on internal trade, the Canadian Federation of Independent Business (CFIB) emphasized that almost 90% of businesses believe action on trade barriers should be a top government priority. Similarly, the Canadian Chamber of Commerce applauded recent commitments, commenting, “there is no sense keeping trade barriers in place.”

The impending need for inter-provincial regulatory alignment is not unique to a specific sector or industry. For instance, leading into the 2023 Canada Health Transfer agreement, associations representing health professionals called for “pan-Canadian licensure” to allow for practice mobility.

Machinery of internal trade

In 2017, Canada’s federal and provincial/territorial governments signed the updated Canadian Free Trade Agreement (CFTA) to “reduce and eliminate, to the extent possible, barriers to the free movement of persons, goods, services, and investments within Canada.”

What’s emerged since is a bureaucracy unto itself, with little substantive movement on addressing trade and labour mobility barriers. Beyond the Committee on Internal Trade and its corresponding Internal Trade Secretariat, other bodies include the Regulatory Reconciliation and Cooperation Table, the Dispute Resolution Working Group and numerous sectoral working groups and task forces.

On labour mobility, the CFTA states it aims “to enable any worker certified for an occupation by a regulatory authority of one Party to be recognized as qualified for that occupation by all other Parties.” Ask anyone in a regulated profession about the use of this clause in practice—a doctor, nurse, lawyer, welder, electrician, and so on—and they’ll agree that each face their own complex licensing and credentialing schemes.

Navigating Canada’s internal trade regime requires both policy and sectoral knowledge along with political acumen. Critically, to address trade and labour mobility barriers in Canada, the most important factor needed of all is political will from both levels of government.

Political will turning to action

Ontario’s Premier Doug Ford, the current Chair of the Council of the Federation, has been a driving force in the pan-Canadian effort to bring down interprovincial barriers. Premier Ford was the first to sign a bilateral agreement with the federal government in 2023 for new funding conditions related to the Canada Health Transfer— these conditions included a commitment to “advance labour mobility, starting with multi-jurisdictional credential recognition.” Despite Ontario tabling enabling legislation, the promise quickly stagnated as health sector concerns moved off the front page.

With a renewed political drive in response to trade threats from President Trump, Premier Ford once again is first out of the gates with newly tabled and far-reaching legislation to support Canada’s internal trade agenda.

The Protect Ontario through Free Trade within Canada Act is an omnibus bill that proposes six substantive measures to improve interprovincial trade and labour mobility:

• Remove Ontario’s 23 party-specific exceptions (PSEs) under the Canadian Free Trade Agreement (CFTA) without exception.
• Direct provincial regulators of goods and services to mutually recognize those of other reciprocating provinces.
• Expand “As of Right” provisions to apply to more certified workers increase labour mobility.
• Consult on other options to expand “As of Right” rules to more health professionals, including American health workers.
• Introduce an interprovincial “Direct-to-Consumer” model for sales of alcoholic beverages.
• Recognize the last Friday of June each year as a “Buy Ontario, Buy Canadian” day.

Together with this ambitious legislative agenda, Ontario has launched a new $50 million Ontario Together Trade Fund that will provide small and medium-sized enterprises up to $5 million through a grant or loan to support projects that expand interprovincial trade capacity.

As an example, in 2023, Ontario exported $183.9 billion of goods and services to other provinces and territories and imported $142.7 billion, resulting in two-way trade of $326.6 billion and a trade surplus of $41.2 billion.

Seeking to increase this value, in addition to the above measures, Premier Ford has signed Memorandums of Understanding (MOUs) with Alberta, Manitoba, Nova Scotia and New Brunswick, Prince Edward Island and Saskatchewan to collaborate in removing barriers and increasing trade.

It is important to note that Premier Ford has signed these MOUs with premiers and governments representing varying political parties, illustrating the significance of taking a Canada-first approach on this issue.

What can companies do?

Businesses, professionals and consumers alike have a shared interest in ensuring Canada’s political leaders deliver on their latest promises to remove the barriers to internal trade and labour mobility. If successful, most studies value improving internal trade at $200 billion annually for Canada’s economy, representing an impressive boost to GDP of about 7 per cent.

While economists are currently debating whether Canada is already in a recession or not, it is clear that President Trump’s tariffs are already causing harm. While a new trading agreement is the very top priority for Prime Minister Mark Carney, as he himself has explained on numerous occasions, a new agreement will take time, and the relationship is already forever changed—and all the more reason for rapid action on internal trade.

Over the weeks and months ahead, companies and professional associations representing regulated sectors and workers have a critical role to ensure Premiers and the Prime Minister deliver on their promises.

Firstly, it’s to show support for rapid action across the country on these promises—that includes helping the government shore up public support. From a labour mobility perspective, this can be achieved by raising awareness of the unmet need that currently exists in several sectors, such as healthcare and the skilled trades.

Secondly, governments will likely face obstacles in addressing licensing and credentialling impediments to labour mobility—another area that both companies and associations can help navigate and solve for. Finally, keeping up public facing pressure will be critical to maintaining the political will needed to solve this complex tangle of red tape.

With Public Affairs experts in key markets across Canada, NATIONAL Public Relations is uniquely poised to assist organizations on internal trade and labour mobility. Contact our team today to develop a tailored plan to meet your goals.