SUBJECT: Removal of Internal Trade Barriers
LOCATION: National
Issue/Source: Internal Trade
Date: July 2025
Suggested Responses
- The Government of Canada has made significant progress towards building One Canadian Economy. These efforts culminated in Royal Assent of the Free Trade and Labour Mobility in Canada Act (the Act) on June 26, 2025, which aims to drive greater domestic productivity and economic competitiveness by removing federal barriers to internal trade and labour mobility.
- This notable achievement has added Canada to the list of governments committed to bringing forward trade-liberalizing legislation.
- The Government of Canada has also taken a major step forward by eliminating all federal exceptions in the Canadian Free Trade Agreement, making the federal level the second jurisdiction, alongside Ontario, to do so. This move promotes greater economic growth and trade opportunities.
- While significant progress has been made, more work is needed to fully eliminate all barriers. In the coming weeks, I will be advancing the regulations that will be informed by my federal colleagues and key stakeholders to be able to bring the Act into force.
- As Minister of Transport and Internal Trade, I look forward to continuing to build on this success to promote a truly free and competitive economy for Canadians.
IF PRESSED
- The Act will come into force when its accompanying regulations are approved.
- The regulations will clarify how the Act will be implemented. The development of regulations will be informed by engagement with stakeholders and partners.
BACKGROUND INFORMATION
- Removing internal trade barriers can unlock Canada’s economic growth and productivity. Each year, goods and services worth over $530 billion move across provincial and territorial (PT) borders. Yet, more can be done. Leading economists estimate that eliminating internal trade obstacles could boost Canada’s gross domestic product by up to $200 billion.
- The Government of Canada has made significant progress on removing federal barriers through the passing of the Free Trade and Labour Mobility in Canada Act (the Act), which received royal assent on June 26, 2025, and by eliminating all remaining federal exceptions in the Canadian Free Trade Agreement (CFTA) on June 30, 2025.
- In parallel, the Government of Canada is working with provinces and territories through the Committee on Internal Trade (CIT) to accelerate the removal of other barriers. Work includes a new chapter in the CFTA on Financial Services, advancing mutual recognition of goods (except food) and trucking, improving labour mobility through a 30-day service standard and Canada-wide credential recognition, and implementing a direct-to-consumer alcohol sales system.
- The Government of Canada is presently developing regulations under the Act on an expedited timeline. The regulations may include exceptions to the application of the legislation. To maximize the potential benefits of the Act, it is recommended that exceptions only be considered where there are significant risks to the health, safety or security of Canadians and the environment, or where application would impede other Government of Canada objectives, such as international trade.