The Canadian economy is a little bit hard to read these days, and for the most part it’s truly not our fault. At the time of this writing, President Donald Trump has introduced another round of tariffs on Canadian goods, however given his administration’s track record, it is unclear exactly how these tariffs will be implemented or the damage they will cause.
However, the one thing that the tariff confusion has done in Canada is instilled a greater sense of national pride, including the push to ‘buy Canadian.’ We’ve been joking and sharing memes about it for months, but shoppers are definitely more conscientious, amidst rising prices, of how much more affordable it can be to buy products made here at home.
The problem is that our own laws don’t always make that easy. The regulations against interprovincial trade have rarely made headlines, but are surprisingly stringent, and can make it difficult for Canadians to do business with Canadians. Now, the Prime Minister’s Office has announced that those laws will be put under a microscope in order to keep more money here at home.
What do those laws currently look like, and what might be in store for Canadian business if internal trade reforms come to fruition?
The Cost of Regulations
Despite trade that currently exists within Canada, for years the volume is still lower than the trade we do with the United States. The challenge primarily comes down to licensing rules and regulations, and transportation restrictions, which makes it harder to move goods freely around the country.
These regulations have made it unappealing to buy Canadian. Past research has shown that these trade barriers are akin to Canadians paying 7% tariffs on domestic products as it is, and that goods are between 7 and 15% higher in cost than they would be on the open market.
The regulations in place currently range between administrative issues, licensing issues, transportation issues, and simple protectionism. Provincial liquor control boards, for example, make it difficult to purchase certain spirits across the country. Some provinces have their own product labelling standards, meaning that even bilingual labels may not be compliant in some places. Shipping costs are also problematic, and can add significant costs to moving some goods across the country if they can even move at all.
The latest motif of taking pride in being Canadian, ‘elbows up’ and the like, wants us to assume that we are all playing on the same team. Yet measures to preserve certain provincial industries, such as fisheries, agricultural sectors, resources etc. have made it unnecessarily challenging for other Canadians to access that same supply.
The government claims that it recognizes the issues…so what are they doing about it?
The Government’s Response
Since he was elected this Spring, Prime Minister Carney has vowed to cut down on federal regulation across the board, including internal regulations that prohibit or limit interprovincial trade. In 2017, all provinces and territories signed onto the Canadian Free Trade Agreement (CFTA), which was supposed to encourage trade within Canada.
However, there is one key carve-out to the CFTA that makes it far less effective – any provincial or territorial government can elect to opt out to part of the agreement. For example, Ontario could decide that, despite signing onto a free trade agreement within the country, it does not apply to one of their key industries.
For its part, the Federal government has, as of Summer 2025, removed all of the 53 federal trade exemption barriers that existed under the CFTA. Yet the Canadian Centre for Policy Alternatives has recently called the Federal government’s claims ‘overstated,’ and described them as “largely political theatre.” While some economists have suggested that releasing barriers could inject $200 billion into the economy, critics say it will have far less impact, and will not do enough to negate the damage from tariffs.
Some provinces are taking matters into their own hands. Ontario’s and Alberta’s leaders have recently signed a memorandum of understanding to increase trade between the provinces, with Alberta buying more Ontario-made vehicles for provincial use, and Ontario procuring more of its alcohol from Alberta – a potent move considering Premier Ford’s ban on the sale of American alcohol in the province.
Other provinces are taking more nationally-focused measures. Nova Scotia has recently agreed to remove all CFTA exemptions it had previously installed, allowing goods sold elsewhere in Canada to be automatically sold within the province, and fast-tracking equivalent licenses held in other provinces. Quebec is implementing some similar measures, while still leaving some provincial protections in place, such as for the construction sector.
Final Thoughts
Frankly, it is too early to tell what will happen next. The US President’s moods seem to shift as often as Canadian weather patterns, and a tariff that is announced today may change tomorrow, or may not come to pass at all. Depending on how long things continue, we may see further changes to interprovincial regulations, or media campaigns that encourage buying certain products specifically made in other provinces.
No matter how things play out, we know that the economic uncertainty can be stressful for our clients. We are happy to assist businesses throughout the Cambridge, Kitchener, and Waterloo region with their legal needs, so that they can focus on regulatory compliance and on taking advantage of new opportunities, and ensure they stay a ‘made in Canada’ success story. Contact us today to learn more about our business law team.