The Canadian Federation of Independent Business (CFIB) has commended the federal government for its significant improvements in advancing internal trade among provinces. The CFIB's latest annual report card revealed a remarkable increase in the federal government’s grade from a C in 2025 to an A-plus. This jump reflects the unprecedented progress made in dismantling internal trade barriers, which have long been viewed as a hindrance to Canada’s domestic economy.
The International Monetary Fund (IMF) estimates that eliminating these barriers could potentially increase Canada’s real gross domestic product (GDP) by $210 billion in the long run. Most provinces and territories scored well on the report card, receiving grades of A or A-, with Nunavut earning a C- grade. Newfoundland and Labrador did not receive a grade due to a recent change in government following the 2025 provincial elections.
Keyli Loeppky, the CFIB’s senior director of Alberta and interprovincial affairs, remarked that governments across Canada have made more progress on internal trade in the past two years than in over a decade. Despite this progress, many small business members reported minimal changes in their ability to sell products across provincial or territorial lines. Loeppky credited Ottawa's leadership in prioritizing the removal of internal trade barriers, facilitating dialogue among provinces and territories on this critical issue.
A significant milestone was marked with the passage of the One Canadian Economy Act under Prime Minister Mark Carney’s government, enacted on June 26, 2025. This legislation eliminated various redundant federal regulations that previously hindered trade across provincial borders. Furthermore, the federal government removed all exemptions to the 2017 Canada Free Trade Agreement, which primarily addresses issues in procurement processes.
Ontario has led the charge in removing its barriers under the agreement, although the outcomes have varied among the other provinces. Notably, Quebec added new internal trade exemptions as highlighted in the CFIB report. The notable improvement in this year’s report card is attributed to mutual recognition policies, allowing products approved in one province to be sold in another without additional certifications. The Canada Mutual Recognition Agreement was signed by all provinces in November 2025 and is expected to be implemented by June 2026.
While some provinces have begun to apply the mutual recognition agreement to goods, full implementation has not yet occurred in all areas. Loeppky acknowledged that the report card’s current evaluation did not consider the full implementation of these agreements. She further indicated that the methodology for the 2027 report would undergo a comprehensive revision to encourage more progress in addressing outstanding internal trade issues. The CFIB advocates extending the mutual recognition agreement to encompass services and labor as well.
Although many provinces have applied the mutual recognition agreement to the sale of goods, it does not necessarily ensure their usability. For example, a chainsaw manufactured in Alberta may be sold in British Columbia, but it might not be legally usable on a worksite in that province. There persist ongoing challenges regarding the direct sale of alcohol and food between provinces, with only Manitoba and New Brunswick fully liberalizing alcohol sales across the country.
While Loeppky praised the federal government’s achievements in promoting internal trade, she called for the introduction of penalties for provinces and territories failing to adhere to commitments in lifting trade barriers. Understanding the journey ahead, Loeppky emphasized, “We’ve come a long way but there’s lots to be done.” She warned that if governments do not act swiftly in the coming year to implement discussed measures, the current grades could decline.
According to a recent CFIB survey, approximately 62 percent of businesses reported that they have sought alternative domestic markets or suppliers to mitigate the impacts of U.S. tariffs and an evolving geopolitical landscape. Despite some advancements in eliminating interprovincial trade barriers, 17 percent of small- and medium-sized businesses noted that trading goods across Canada has become more challenging.
Loeppky expressed the disparity between theoretical progress and practical outcomes, stressing the importance of actual implementation in making a difference. More than a quarter of surveyed businesses believe that removing internal trade barriers could enable them to offer more competitive pricing and a richer variety of goods to consumers. The CFIB's internal trade survey results are based on feedback from over 1,000 member businesses gathered between March and May 2026.
The Canadian Research Insights Council, an organization dedicated to upholding polling standards, has noted that online surveys do not allow assignment of a margin of error due to the lack of random population sampling.
