REMOVING INTERPROVINCIAL TRADE BARRIERS IN CANADA: A PATH TO ECONOMIC PROSPERITY

Interprovincial trade in Canada, a significant contributor to the nation's annual gross domestic product, holds immense economic opportunity. About one-fifth of Canada's GDP is derived from this interprovincial trade.
Despite this, internal trade barriers still thwart complete economic integration, even following the enactment of the Canadian Free Trade Agreement (CFTA) in 2017.
65.2% of Canadian businesses were disengaged with interprovincial trade in the past year. Existing trade barriers impart the equivalent of a 6.9% tariff on goods traversing internal borders, imposing a cost burden on consumers, adding between 7.8% and 14.5% to the prices of goods and services.
Though there has been a reduction in trade obstacles, as revealed by the 2024 edition of Canada's Interprovincial Cooperation Report Card, there remains considerable room for improvement.
An optimistic glimpse into the scenario is the progress made by four western provinces (Alberta, British Columbia, Saskatchewan, and Manitoba) due to their participation in the New West Partnership Trade Agreement (NWPTA), offering an advanced alternative to the existing CFTA.
Manitoba and Alberta were rated as the best performers; however, even their scores reflected a less-than-perfect A-grade rating.
Despite the implementation of the CFTA, barriers continue to hinder efficient interprovincial trade. Recognizing the importance of removing these barriers, the federal government has committed $21 million to this initiative.
The Canadian Federation of Independent Business stresses the significance of strategic alliances and the reduction of trade barriers, with the potential to benefit around 215,000 small and medium businesses in Ontario and Quebec alone.
Essential recommendations include augmenting language and translation supports, enhancing collaboration in realms such as labour mobility and trade facilitation, and simplifying regulations.

Notably, a proposed 25% tariff by the Trump administration could result in Canadian job losses up to 1.5 million positions and cause a GDP contraction significantly exceeding 2.4%

However, studies suggest that eliminating Canadian inter-provincial barriers could boost Canada's GDP by 3.8% to 7%

Greater prosperity is projected for Provinces such as Ontario, Quebec, and Alberta, representing two-thirds of the total GDP increase.

Also, the removal of interprovincial trade barriers could result in a decrease in consumer prices, ranging between 8% to 15% .
In conclusion, eliminating interprovincial trade barriers offers substantial economic benefits for Canada's GDP and per capita financial health, while also reducing consumer goods prices.
To harness this economic potential, interprovincial cooperation, removal of trade barriers and strategic alignment between Provinces are essential.

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