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Removing internal trade barriers would help mitigate damage from Trump tariffs

Published

4 months ago

4 minute read

From the Fraser Institute

By Jake Fuss

President Trump’s tariffs have prompted renewed interest among federal and provincial policymakers to remove interprovincial trade barriers in Canada to mitigate some of the economic damage. But whatever happens with U.S. policy, with a new prime minister and a federal election looming, trade liberalization within our provincial borders is long overdue.

For decades in Canada, government policies have created substantial barriers to investment, trade and migration between provinces and territories, which hinder the free movement of workers, goods and services in Canada and limit economic growth.

These trade barriers include differences in licencing recognition and safety rules, trucking regulations, credential recognition, provincial monopolies over alcohol distribution, and strict restrictions on the sale of certain goods across provincial borders. This complex array of policies, unique to each province and territory, creates compliance challenges, additional costs for businesses and higher prices for consumers.

According to a 2019 report from the International Monetary Fund, internal trade barriers add between 7.8 per cent and 14.5 per cent to the prices of goods and services purchased by Canadians—that’s more than the GST (5.0 per cent). The harm to the broader economy is also no secret. Research by Ryan Manucha and Trevor Tombe estimates internal trade barriers cost the national economy as much as $200 billion annually.

And when workers are able to use their credentials obtained in one province to get jobs in other provinces, they have more opportunity. At the same time, businesses benefit from an expanded pool of qualified workers.

Again, provincial premiers and federal representatives recently met to discuss reducing trade barriers. For example, the federal government announced plans to strengthen the Canada Free Trade Agreement (CFTA)—a 2017 agreement intended to eliminate barriers for the movement of people, goods and services within Canada. The CFTA has been plagued with an abundance of exceptions that allow Canadian governments across the country to exclude many industries (i.e. dairy and poultry) or specific legislation from the agreement. The government has pledged to remove more than half of these exceptions to allow for more consistent rules and regulations across provinces.

While this is a step in the right direction, it doesn’t go nearly far enough. Working alongside the provincial and territorial governments, federal policymakers should propose a policy of “mutual recognition” so any good, service or professional credential that meets the regulatory requirements of a single province or territory automatically satisfies the requirements of another.

Research shows mutual recognition would increase Canada’s GDP per person—a broad measure of living standards—between $2,900 to $5,100 over the long term.

Provinces can also act on their own through bilateral or multilateral partnership agreements to harmonize regulations and improve worker mobility. One option is to expand the scope of the New West Partnership Trade Agreement (NWPTA) between British Columbia, Alberta, Saskatchewan and Manitoba, and include more provinces in the agreement.

Given President Trump’s aggressive stance on tariffs, federal and provincial policymakers must create an integrated internal trade market in Canada to offset some of the potential economic damage. By eliminating trade barriers, governments across the country can help increase the ability of workers and businesses to prosper, decrease prices, raise household incomes and improve living standards.

Jake Fuss

Director, Fiscal Studies, Fraser Institute
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They got rid of all the older children essentially and just had younger children who were too young to be diagnosed and they stratified that, stratified the data

The Centers for Disease Control and Prevention (CDC) found newborn babies who received the Hepatitis B vaccine had 1,135-percent higher autism rates than those who did not or received it later in life, Robert F. Kennedy Jr. told Tucker Carlson recently. However, the CDC practiced “trickery” in its studies on autism so as not to implicate vaccines, Kennedy said.

RFK Jr., who is the current Secretary of Health and Human Services, said the CDC buried the results by manipulating the data. Kennedy has pledged to find the causes of autism, with a particular focus on the role vaccines may play in the rise in rates in the past decades.

The Hepatitis B shot is required by nearly every state in the U.S. for children to attend school, day care, or both. The CDC recommends the jab for all babies at birth, regardless of whether their mother has Hep B, which is easily diagnosable and commonly spread through sexual activity, piercings, and tattoos.

“They kept the study secret and then they manipulated it through five different iterations to try to bury the link and we know how they did it – they got rid of all the older children essentially and just had younger children who were too young to be diagnosed and they stratified that, stratified the data,” Kennedy told Carlson for an episode of the commentator’s podcast. “And they did a lot of other tricks and all of those studies were the subject of those kind of that kind of trickery.”

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Carlson asked if the answers would “differ from status quo kind of thinking.”

“I think they will,” Kennedy said. He continued on to say that people “need to stop trusting the experts.”

“We were told at the beginning of COVID ‘don’t look at any data yourself, don’t do any investigation yourself, just trust the experts,”‘ he said.

In a democracy, Kennedy said, we have the “obligation” to “do our own research.”

“That’s the way it should be done,” Kennedy said.

He also reiterated that HHS will return to “gold standard science” and publish the results so everyone can review them.

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“I’m sorry, but I just can’t stand it anymore. This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it,” Musk exclaimed in an X post last month.

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With the bill still under Senate review, the dispute underscores growing pressure on Trump from fiscal hardliners and tech-aligned conservatives – some of whom helped deliver his return to power. Cracks in the coalition may spell longer term problems for the Make America Great Again movement.

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