The Canadian Free Trade Agreement, which was supposed to liberalize trade between provinces, entered into force in 2017. Over the past four years, however, most provinces have made no progress in reducing interprovincial trade barriers, which unfairly restrict the economic freedom of Canadians and significantly impede economic growth.
A trio of economists with the Montreal Economic Institute (MEI) report in a recent study that since the agreement was signed, Alberta has significantly reduced its interprovincial trade barriers while Manitoba and Ontario have made modest progress. But in the rest of the country, internal trade barriers have either increased or been maintained.
Citing an International Monetary Fund paper by economists Jorge Alvarez, Ivo Krznar, and Trevor Tombe, the MEI study points out that the estimated economic cost of interprovincial trade barriers to Canadians is about 3.8% of GDP. That’s 3.8% of income, every year.