The State of Interprovincial Trade

Dariya Baiguzhiyeva

To mark the fifth anniversary of the Canada Free Trade Agreement (CFTA), the Canadian Federation of Independent Business (CFIB) has created a new report card, The State of Internal Trade: Canada’s Interprovincial Cooperation Report Card. 

“The signing of the CFTA signalled that Canadian governments were finally serious about reducing barriers to the movement of goods, services, labour, and investment. But progress has been slow, and many high-profile barriers remain,” said Laura Jones, Executive Vice-President at CFIB.

The CFTA replaced the Agreement on Internal Trade (AIT), which the business community and many policymakers viewed as dated and ineffective. The CFTA uses a negative list approach, where everything is included unless a specific exemption is taken (rather than only having things listed in the agreement). Signatories also created a Regulatory Cooperation Table (RCT) to address regulatory differences that act as barriers to trade.

The report card grades governments in three areas:

  • Exceptions to the CFTA
  • Select barriers to internal trade
  • Implementation status of reconciliation agreements

Overall grades range from a low “F” to a high of a “B,” with some higher grades in the subcategories.

The 2022 report card grades are:

Jurisdiction

Total Exceptions to the CFTA in 2021

Select Barriers to Internal Trade Implementation Status of Reconciliation Agreements Overall Inter-Provincial/Territorial Cooperation
Score and Grade
AB 10.0 A 4.2 D- 8.8 A- 8.3 B
MB 8.6 B+ 4.2 D- 9.5 A 8.1 B
SK 8.3 B 3.7 F 8.8 A- 7.5 B-
NS 6.2 C- 3.8 F 9.0 A 6.8 C
BC 7.6 B- 3.3 F 7.5 B- 6.7 C
ON 4.8 D- 5.0 D- 9.0 A 6.5 C-
PEI 5.2 D 1.7 F 6.3 C- 4.9 D-
NT 5.5 D+ 0.0 F 5.6 D+ 4.5 D-
NU 4.8 D- 0.0 F 5.6 D+ 4.2 D-
NL 4.8 D- 0.0 F 5.6 D+ 4.2 D-
NB 2.1 F 1.7 F 7.2 C+ 4.0 D-
YT 0.7 F 0.0 F 8.8 A- 3.8 F
QC 0.0 F 2.5 F 7.0 C 3.3 F
FED 2.1 F 7.2 C+ 4.6 D-

CFIB has several recommendations for governments:

  • Work as quickly as possible to remove internal trade and labour mobility barriers, including those cited in the report card. 
  • Provide better and more transparent data on progress, particularly on implementing reconciliation agreements.
  • Proactively engage stakeholders.

The boldest recommendation is for governments to mutually recognize all provincial and territorial regulatory standards (besides an exemption list). For example, if a business meets the health and safety standards in its home province, that should be accepted by any other province or territory. This could be done unilaterally or as a group.

“The low grades on our first report card do not indicate that no progress has been made. Rather, they reflect that much more work remains,” said Corinne Pohlmann, Senior Vice-President of National Affairs at CFIB.

“At one time, eliminating unnecessary barriers to working and trading across Canada was less urgent. Today, with labour shortages and cost pressures mounting, wasting time and money is a luxury few can afford,” concluded Jones.

For more information on grades and marking criteria, refer to Canada’s Interprovincial Cooperation Report Card.

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