The Current - Squad up! Is interprovincial trade happening ?

Episode Date: July 3, 2025

Ottawa says it’s done its part in removing federal exceptions to make interprovincial trade easier. But with most of the barriers still in provincial hands, we speak to Ryan Mallough from the Canadian Federation of Independent Business, about the federal government’s actions and whether they’re enough and Ryan Manucha, a research fellow at the CD Howe Institute, on why reducing interprovincial trade barriers remains complicated and what Canada can learn from other countries that have tackled similar challenges.

We're all looking for great places to visit in Canada. One of my favorites is the Stratford Festival. The theatre is truly of the highest caliber and there's so much selection. They have 11 large-scale shows on stage and trust me, whatever is on manure there will be exceptional. People always think Shakespeare when they think of Stratford, but it's so much more. Broadway musicals, family shows, classic comedy and drama. Whether it's Robert LaPage's Macbeth or Donna Fior's Annie, you will be blown away.

It's the perfect Canadian getaway. To quote William Shatner, who got his start in Stratford, every Canadian should make the pilgrimage to Stratford. Start your next adventure at StratfordFestival.ca. This is a CBC Podcast. Hello, I'm Matt Galloway and this is The Current Podcast. Because together we can give ourselves more than any foreign government can ever take away. We can more than offset the effects of any US tariffs by eliminating internal trade barriers alone. That was Mark Carney back in March with a promise to build one Canadian economy. In the

face of a trade war with the US, the Prime Minister promised to eliminate provincial trade barriers by Canada Day. Well, it's July 3rd, and though they haven't exactly been eliminated, there has been some progress. The government passed legislation on internal trade and labour mobility, Bill C-5, and it scrapped all federal exceptions to the Canada Free Trade Agreement. but many barriers remain in place and according to my first guest, the government may actually be creating new ones. Ryan Maloe is with the Canadian Federation of Independent Business. Good morning. Good morning.

Mark Carney promised to make internal trade more free. How are we doing on that front? We're certainly headed in the right direction. We've got seven governments, the feds in six provinces, that have introduced some form of mutual recognition legislation, which means if rules work in one province, they should work in another. And so we're off to a good start, but we're not quite there yet. There's still a lot of nitty-gritty work that needs to be done, a lot of regulation that needs to be figured out, and unfortunately, seven jurisdictions taking seven slightly

different approaches, and we're looking to see how that shakes out as well. You say we're not quite there. Earlier this week, the federal government put out a press release saying it's removed all inter-provincial trade barriers under its jurisdiction. Isn't that significant progress? It is significant progress, but a lot of internal trade comes down to the provinces. The feds do have some jurisdiction over some areas, and they have gotten rid of those exceptions under the trade agreement, but there's still a lot of work at the provincial level that needs to be done in order to really get to true free trade.

Mark Carney estimates that eliminating those trade barriers would increase the size of Canada's economy by over $200 billion. Tell us, how do these internal trade barriers impact your members? So it really comes down to trying to understand confusing rules, trying to make sure that you are compliant, trying to move labor. It comes down to time consumption and then the cost and fees associated with getting, you know, new licenses, new paperwork, having someone look at that paperwork. So what we're trying to do is really streamline having someone look at that paperwork. So what we're trying to do is really streamline the ability for businesses to move goods, services,

and people across the country in the way that the country was founded upon. I mean, this whole experiment that is Canada was based on being able to move goods and services, was based on trade. And 150 years later, we've really got a bit of a quagmire in doing it. Can you give me some examples of the

things that are that are holding up? I mean alcohol has been a sticking point like are we any closer am I any closer to getting my BC red here in Ontario? So I really hope so. I know that the the government is actively working on it. There was an agreement between Ontario and Manitoba that was signed earlier in the year that had marked June 30th as opening Ontario up to Manitoba. I'm not sure if that has gone through. There's a committee on internal trade meeting on July 8th where we hope to see some sort of announcement, but we've got a lot of good signaled intent, not a lot of actual follow

through on that file yet. Let's talk about what the provinces are doing. You've released a report card on how each province is doing. Which ones get high grades right now? Matthew 20 So the three highest jurisdictions, number one in the country is Nova Scotia. They get an A, 9.4 out of 10. Number two is Ontario, also an A, coming in just behind it at 9.2. And then Manitoba, an A minus, I believe,

8.9. And what all three of those jurisdictions have done is introduced mutual recognition legislation. Nova Scotia was the first province in the country to do it, also the first to have it somewhat implemented, which is very positive. Ontario was the first to remove all of their exceptions. They did it well before the feds did. And again, we're seeing movement and urgency at the political level in those provinces that we just haven't seen on this file since the Canadian

Free Trade Agreement was signed in 2017. Okay, so Ontario, Nova Scotia, Manitoba getting A's right now. Who's getting the poor grades? The poor grades, it's the territories that are really bringing up the rear. The territories all have D's. I think Manitoba is only slightly higher there and Quebec. And again, I want to underscore while those grades are low relative to the provinces at the top, they actually do mark significant progress. The Yukon just eliminated, I think, six of its exceptions or about to eliminate. So we are seeing progress there, just not as quickly as the other ones. BC and Quebec also kind of going in different directions here?

Yeah. So we've sort of got two camps when it comes to mutual recognition legislation. There's the camp that requires a reciprocal agreement, which is basically our legislation is conditional on your legislation recognizing us or your rules recognizing us. So in that camp, you've got Ontario, Manitoba, Nova Scotia, Prince Edward Island. Then you've got Quebec, BC and the feds that are saying, we aren't making ours conditional. We don't require that, but there's a lot of regulatory work that has to follow that up that is still yet to be done. We know Quebec has been very clear there are going to be carve-outs and exceptions around language sectorally as well. So still waiting to see that shakeout.

Okay. You keep talking about regulatory work that needs to be done. It seems like there's going to be still this patchwork of regulations. Is that not the case? It is shaping up to be that way. I mean, look, there is a world where we can have 10 provinces, three territories in the federal government, all with slightly different rules and definitions, and it does work. They're not saying that that's impossible. I'm saying that our experience is traditionally when you've got multiple jurisdictions going for the same thing in multiple different ways, it tends not to. And that's our worry here is that we could be creating a major patchwork that is going to be extremely off-putting to business owners trying to navigate it.

And that's why we're encouraging the government, the Committee on Internal Trade, the premiers, the prime minister to come together and get one pan-Canadian agreement, one set of rules and standards in place so that everyone is navigating under the same thing and there's no confusion on the ground. You mentioned the Committee on Internal Trade. There are reps from every jurisdiction working on those national mutual recognition agreements, as they're called. Shouldn't that be the place to address all these concerns? Certainly, and that is the place that has made the progress that we've or had seen up to date on internal trade. We've just seen this political will that we haven't

seen before. And so the premiers, Premier Ford in Ontario in particular, as head of the Council of the Federation, has been very motivated to get things done. And so we've sort of seen the provinces eclipse a little bit the pace that we have seen in the committee on internal trade. And now, now we've got questions like the committee is working on something pan Canadian for December. How is that going to work with these seven pieces of legislation we already have potentially eight or nine by the fall, all questions that are still up in the air. I'm scratching my head listening to you, Ryan. The country is 150 years old.

Why has it been so difficult to figure this out? That's always been the key question. If I had the answer to that, we'd have free internal trade right now. It's been extremely frustrating. We've seen there I mean, there's sectoral carve-outs, there are provinces that want to protect their own industries. There's always a reason to insert another rule that seems all right at the time, but over 150 years, that really, really adds up and gets us to a point where, you know, our members

will tell us it is much easier to move things, not just with the US. You've got members that say it's easier to move things with Europe than it is the province next door. And you can't have that. You can't have that at the best of times. You can't have that when you're engaged in a major trade battle with your biggest trading partner. We have to figure our house out at home.

You mentioned some provinces that are trying to protect regional industries. Are there particular businesses that have built their manufacturing and business model on these protectionist regulations? For sure, because they're the rules that are at play on the ground, right? One of the things that the Committee on Internal Trade has been working on over the years is building codes. We're not quite there yet, and you're seeing a lot of news about prefabricated homes, and

that might be a solve for the housing crisis. Well, if you're a prefabricated home manufacturer in Ontario, you've got to deal with the building codes in all of the other provinces. That's not straightened out. So it's not the business' fault for playing by the rules that they're given, but the rules that they've been given are tough. There will need to be a transition for some businesses, but ultimately it is the best way to go for the country to open those rules up.

So I guess that leads to the question, who loses if the barriers are removed? So I don't think it's about losing. I think it's about there'll be some businesses will need to pivot. Some people need to pivot. But ultimately, what we'll have is provinces that are openly competing for labor. You'll have the ability to move from one location to the other without needing to get retrained or fully recertified as a worker. You'll be able to move goods that are totally compliant in one province and really need to underscore that. Like when we're talking about things

like meat, for example, meat that's federally inspected can move across provincial borders, meat that is provincially inspected cannot. What is the message that we're sending there? That beef is totally okay in Saskatchewan, but as soon as it crosses the border to Alberta, it's no good all of a sudden? It just doesn't make sense. I think that's the motivation and that's what the thinking that we need our governments to be coming at this with is that the rules need to make sense. It needs to be straightforward. If it works in one province it should work in another unless there is a very clear, clean reason it doesn't. All right. Excellent. Thank you for giving us your insight on this.

Anytime. Ryan Maloe is with the Canadian Federation of Independent Business. We're all looking for great places to visit in Canada. One of my is with the Canadian Federation of Independent Business. We're all looking for great places to visit in Canada. One of my favorites is the Stratford Festival. The theater is truly of the highest caliber and there's so much selection. They have 11 large-scale shows on stage and trust me, whatever is on when you're there will be exceptional. People always think Shakespeare when they think of Stratford, but it's so much more. Broadway musicals,

family shows, classic comedy and drama. Whether it's Robert LaPage's Macbeth or Donna Fiora's Annie, you will be blown away. It's the perfect Canadian getaway. To quote William Shatner, who got his start in Stratford, every Canadian should make the pilgrimage to Stratford. Start your next adventure at StratfordFestival.ca. This message comes from Viking, committed to exploring the world in comfort. Journey through the heart of Europe on a Viking longship, with thoughtful service, destination-focused

dining, and cultural enrichment, on board and on shore. With a variety of voyages and sailing dates to choose from, now is the time to explore Europe's waterways. Learn more at Viking.com. Joining me now is Ryan Mnuchah. He's a research fellow with the C.D. Howe Institute and the author of Booze, Cigarettes, and Constitutional Dust-Ups, Canada's Quest for Interprovincial Trade. Good morning. Good morning.

What do you think of what you just heard from Ryan Mnuchah? Ryan encapsulated it excellently. I think the current state of play on internal trade is that a lot of what we've talked about in academic circles for years has actually been implemented inside of legislation. This concept of mutual recognition, if the good service or person was certified in another province is good enough for them, it should be good enough to be consumed and sold in another province. And this was a, it should be good enough to be consumed and sold in another province. And this was a theory, it was sort of circulating in papers and the game changing change that happened post Trump's election is that this concept is now found inside of our provincial

and now federal legislation, certain provinces and that is a stepwise function. But as Ryan absolutely pointed out, that's absolutely correct, the hard work is now left to the regulators to implement on this concept of permitting the inter, the liberalized flow of goods and services across the provinces. We heard Ryan talk about bill C5 and the various inter-provincial deals that are happening. Is there a concern about creating a new patchwork

of regulations rather than just solving this problem? I've been really impressed to see the entrepreneurialism among certain regulators. Take the financial services regulator in Ontario. They came out with an express lane entry program just a few days ago to permit, you know, this regulator in Ontario covers insurance adjusters and mortgage brokers. And they've created this express lane to expedite to the most impressive degree I have seen on getting folks credentialed in one province into Ontario under those same credentials as long as you sort of notify the local regulatory authority. So at the same time there is patchwork, we're working through the – if this was an easy task, we would have done it, right? This is tough and the experimentation is inspiring and it propels other regulators to go even further.

Well, why has it been so hard to create that one Canadian economy that Mark Carney promised? Canada is the world's second largest country by landmass. We have incredible diversity and topography and people, social customs. And in order to keep the country together, you had to have a constitution that gave provinces considerable regulatory and legislative authority, that's lots of jurisdiction, with that same power to keep the country together that you can create, you know, 13 fiefdoms. And so, we're asking ourselves at this point in time, let's be better angels of our nature and come together. It's almost like a collective good argument. Let's restrain ourselves from creating these fiefdoms in the interest of national security prosperity and our way of life.

Let's get into the specifics here, some of those fiefdoms. I mean, what interprovincial trade barriers are going to be the hardest to remove right now? Yeah, the movement of people, quite frankly, then that's where the options are immense, right? The ability to translate credentials and certifications from one province to another trucking is another really big one. The patchwork nature of inter-provincial trucking regulations augmenting the cost of freight services by about 8.3% on average, which has to come out somewhere,

it comes into the cost of goods on store shelves. There are some odd ones on the books too in trucking. I mean, in BC, there's certain types of trucks that you can only drive at night, and then in Alberta, that same truck you can only drive during the day, that kind of thing. Yeah, varying driver qualifications for long combination vehicles, differing max weights for heavy duty tow trucks. And now some of these differences matter, exist for, you know, topographical reasons, right? Like the Canadian Shield in Ontario,

very strong, very durable, can take much heavier trucks than say, some parts of the prairies, right? And so in the frost, in the springtime, the wear and tear is worse in one part to the other. But this is what federalism is about, is a cooperative, you've got a central government who sees these costs and kind of bring them all together. Pete Slauson You're talking about the movement of people, nurses, engineers, both regulated at the provincial level. How hard is that to harmonize from Nova Scotia to British Columbia? Jared Slauson It starts with a changing in culture. What we're doing, we're on the precipice of a culture change, not just a policy change,

where our regulators in Ontario and BC and Manitoba are talking to their counterparts elsewhere. They're learning how is it that they do it and they do it differently, and we're in constant communication, information exchange, reason giving. If I'm not going to give full credentials to an incoming social worker from another province, I've got to be able to read out why, right? Why is there a difference? And then what's the condition to bridge that divide? And then over time, and we have 70 years of experience between Australia and the EU combined. What happens is over time, those differences bridge and we get to common harmonized platforms. One sector that's been raising concerns is meat processing. There's language in Bill C-5 that says provincial and federal meat standards would be deemed

equivalent according to the Canadian Meat Council that could pose problems for exports. Let's listen to their senior director Lauren Martin. You have to be federally inspected to trade interprovincially. You have to be federally inspected to trade in internationally. So what bill C five purports to do is to kind of unlock, I suppose, that last 5%. But all we're saying is let's maybe unpack that and proceed with caution because in doing so we don't want to jeopardize our international trade relationships, which rely on those federal standards because again the standards between provinces can be different and they are different than the federal standards. So I guess that's the question is are all inter-provincial trade barriers bad? Look like with meat inspection the federally licensed abattoirs are the ones who get to

have their meat moving across the borders and it's essentially controlled by an oligopoly if not a duopoly. You know the argument that like the provincial standards are not going to have their meat moving across the borders and it's essentially controlled by an oligopoly if not a duopoly. You know the argument that like the provincial standards are not good enough, either we have to admit that some province is on the precipice of some sort of outbreak or we have to admit that some the provincial rules are good enough for like one of the two has to be true here. And so I'm always, you have to be able to articulate in facts and science why a distinction exists and why you have to perpetuate a trade in facts and science why a distinction exists and why you have to perpetuate a trade bearer.

And look, I'm not dogmatic here, right? Like it's July 3rd and we still have supply management. Supply management is technically a trade barrier, right? It's not even getting into supply management. It's technically a trade barrier, but in some echelons of policy, someone has decided this is an overriding public policy interest and it trumps even the desire for inter-revincial free trade on this file.

Let's take a step back. You mentioned international examples. Talk to me about Australia. What happened there? Yeah. Back in the early 90s, Australia was sort of in the same position as us where they were really fearful for their economic growth, their viability and their continued durability as an economy.

And they said, we got to get our house in order. So they all implemented the exact same mutual recognition legislation. Unlike what's happening in Canada where we've got a patchwork nature of the legislation springing up. Some provinces are doing it, some are not. It's taking its smells and looks different across the country. And Australia was all one and over in the first two years, 15,000 Australians engaged in that

apparatus to get to the other side of an Australian internal border. And within five years, we saw 20 occupations get to a national licensing standard because there was so much activity, so much interaction amongst regulators that they were able to get to common platforms. Do we have a sense of the economic impact in Australia when they did that? Dramatic, dramatic. I mean, we're talking about hundreds of millions of dollars and in Canada, like we're talking about hundreds of billions in the maximal implementation

of internal free trade and I know there's back and forth what is the right number. But whether or not it's 200 billion, 150 billion, 100 billion, I think there's arguments to be made that it's 300 billion. If I rewind the clock, go back to 1871 and say to a room full of economists, what's the economic benefit of the Canadian Pacific railway? Would any one of them have credibly projected a two trillion G7 nation? I don't think they could have done so. That's what we're talking about here. Internal trade barriers are the less sexy cousin of the CPR. Well, and these are typically not sexy topics during an election to be talking about inter-provincial trade barriers. It's a lot of regulations.

I'm just curious about Australia. I mean, is there something that we can learn from that example and the way that they implemented it seemed like they made it happen. Leadership really had to come from their equivalent of the provinces, right? It was the sub-national jurisdictions, the Australian states that stepped up. And it was them saying, hey, we've got to do something about this because we are trying to compete in an increasingly globalized world. Canada, same thing, we're seeing our drop off relative to our OECD counterparts in terms of competitiveness and prosperity and wealth creation and we have to take a long and hard look. I've seen regulators across the country using this

internal trade renewal opportunity. I spoke to one regulator in charge of electrical codes in one province who said, hey, there were 12 updates that were sort of on my books I had to do and this has propelled me to do this even faster. About 30 seconds left here, what are you going to be watching for in the weeks and months ahead to see if we're making any progress on this? Watching the follow through by the regulators that they are living up to the spirit of the legislation which is calling for the acceptance of people, goods, and services. And are they, you know, is the meat going to be able to get across? Are the workers truly able to, you know, mobilize and move to the other side of a provincial border? Are we still going to

ask for high school transcripts? Pete Slauson All right. Thank you for your expertise on this. Ryan Minuccia Thank you. Pete Slauson Ryan Minucucha is a research fellow with the C.D. Howe Institute and the author of Booze, Cigarettes, and Constitutional Dust-Ups, Canada's Quest for Interprovincial Trade. I love that title. You've been listening to The Current Podcast. My name is Matt Galloway. Thanks for listening. I'll talk to you soon.

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