Poilievre calls for free interprovincial trade to increase competitiveness amid tariff war

Conservative Leader Pierre Poilievre vowed on Monday to increase free trade among provinces as an alternative to relying on the U.S. as Canada’s primary export market amid tariff conflict.

In response to 10-per-cent tariffs on Canadian energy exports and 25-per-cent tariffs on all other Canadian exports to the U.S., Poilievre released a video to X, laying out his plan to boost the Canadian economy and become more competitive with the U.S. if elected.

“With President Trump’s new tariffs on Canada’s economy, it is reckless to remain so helplessly dependent on just one export market, the United States,” Poilievre said in the video.

He said Canada should be trading more with Canadians instead of other countries, but that interprovincial trade barriers make it more difficult than trading internationally.

“Trade barriers between Canadian provinces are actually more costly than trade barriers between Canada and other nations. The result is that we now trade more with the rest of the world than we trade with ourselves,” he said. “In 2023, international trade was worth 66 per cent of our GDP, while inter-provincial trade was only worth 36 per cent – that makes no sense.” 

According to Global Affairs Canada’s 2023 State of Trade report, Canada exported $595 billion worth of goods to the US, while the same year Transport Canada said domestic trade accounted for less than half of that: trade between provinces amountedto only $241 billion. 

Macdonald Laurier Institute Economist Trevor Tombe estimated eliminating interprovincial trade barriers could boost Canada’s economy by 7.9 per cent and generate an economic boost of $200 billion more.

Poilievre said such a boost to the economy wouldn’t be enough to “displace the U.S. market” but would be a step in the right direction to becoming a more self-reliant nation.

He said if elected, he would standardize regulations to streamline transportation between provinces and allow workers to travel and work anywhere in the country with a nationally recognized license.

He also said if elected he would immediately call a meeting among premiers to discuss open trade agreements and would incentivize provinces to remove trade barriers using federal money generated by the renewed internal free trade.

Poilievre noted that the Canada Free Trade Agreement, designed to allow commerce between provinces and territories, is rife with exceptions. According to a Montreal Economic Institute report, there are 245 exemptions to free trade between provinces, with Quebec having the most.

SeoRhin Yoo, an interprovincial affairs analyst at the Canadian Federation of Independent Business, thinks Poilievre’s plan to improve free trade among provinces is just what Canada needs right now as Trump’s tariffs are sure to make life more unaffordable.

She told True North in an interview that there’s no better time than right now to remove barriers to free trade within Canada. She said the list of exemptions to the CFTA block free trade between provinces.

Yoo referenced a 2019 International Monetary Fund study which said by imposing charges on trading goods such as alcohol, Canada’s interprovincial trade barriers act as a 21-per-cent tariff.

“Reducing that, obviously, is going to boost our GDP. It’s going to boost our trade as well,” she said. “We are expecting that once free trade opens up within Canada, it can definitely soften a lot of the blow that’s coming from the U.S.”

Yoo recommended provinces recognize one another’s jurisdictions rather than a “harmonization approach,” which could take years as provinces try to reach an agreement on best practices and regulations collectively.

She said that even among provinces which might agree on regulations, there are still barriers imposedby federal regulators. 

“Food in Alberta can’t move across interprovincially unless it’s been inspected by the Canadian Food Inspection Agency,” Yoo said. “This impacts a lot of Canadian businesses from expanding just because provincial and central regulations are different, and adhering to both costs them a lot of money.”

She said many of the barriers to free trade stem from a sentiment of protectionism from the various jurisdictions in Canada, and that the process to remove the obstacles and match regulations with other provinces is daunting, so provincial governments likely avoid it.

“They want to protect their local goods, services and businesses, which is understandable,” Yoo said. “However, it also negatively impacts their own businesses by doing that, because it creates barriers for a lot of their own businesses from expanding to other provinces and territories.”

Joanna Barron, the executive director of the Canadian Constitution Foundation, also thinks Poilievre’s plan is exactly what Canada needs to bring it back to align with the fathers of Canada’s Confederation’s free trade vision.

The CCF was a chief supporter of Gerard Comeau’s case against the crown, which landed in the Supreme Court. Comeau was fined for buying alcohol in Quebec to bring back to New Brunswick.

In the video posted by Poilievre on X, he said the Supreme Court “wrongly denied his constitutional right to transport goods across provincial borders” as an example of unfair barriers to trade.

“The whole purpose of Confederation was a free trade union in some sense. It’s baked into our constitutional architecture,” Baron told True North. “The purpose of uniting this, this vast land that we call Canada, was to facilitate free movement of goods and services, and it’s not acceptable that these barriers have passed constitutional muster.”