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Minister of Transport and Internal Trade Chrystia Freeland responds to a question during question period in the House of Commons on Parliament Hill in Ottawa on June 12, 2025. The Canadian Press/Sean Kilpatrick
Ottawa has eliminated interprovincial trade barriers that fall under its jurisdiction, Internal Trade Minister Chrystia Freeland has announced.
The federal government is removing all of the remaining federal exceptions from the Canadian Free Trade Agreement (CFTA) that had been inhibiting free trade between the provinces, Freeland said in a June 30 press release.
The government announced the elimination or narrowing of 17 of its federal barriers in July 2024, and Prime Minister Mark Carney removed an additional 20 CFTA exceptions in February, but there were still several exceptions in place.
The government’s June 30 announcement removes all remaining trade obstacles, Freeland said. The bulk of the 53 abolished exceptions are associated with federal procurement guidelines related to financial entities, commercial land development, transportation services, and space projects.
“Removal of all federal exceptions in the Canadian Free Trade Agreement is one of the many recent measures we are taking … to eliminate internal trade barriers and cut red tape for Canadian businesses,” she said.
“We are moving quickly on commitments to improve labour mobility for workers across the country, implement mutual recognition agreements to get goods and services moving, and [remove] duplication of requirements which for too long have created extra costs and delays for Canadian businesses and workers.”
The announcement arrives one day prior to the Canada Day deadline that Carney had committed to in March for removing all internal trade barriers in a bid to create “one Canadian economy out of 13.” Carney has described the change as a necessity in the face of the trade war, and the resulting tariffs, that U.S. President Donald Trump has launched against Canada.
The change also coincides with the recent approval of the Liberals’ One Canadian Economy Act, formerly known as Bill C-5.
The legislation, designed to eliminate federal obstacles to internal trade and labour mobility, received almost unanimous approval from MPs on June 20, shortly before the House adjourned for its summer break. It was approved by the Senate on June 26 and received royal assent that same day to become law.
All provincial and territorial governments have pledged to conduct a review of their own respective exceptions under the CFTA, and several provinces have also taken steps to dismantle certain internal trade barriers between them. Ontario, for instance, signed a memorandum of understanding with Manitoba in May and also has previously signed internal trade agreements in place with both Nova Scotia and New Brunswick.
The internal trade committee, consisting of Freeland along with either the premier or the responsible minister from each of the 13 provinces and territories, is scheduled to meet on July 8, the government said. The meeting is expected to outline the progress made by each jurisdiction in eliminating its specific exceptions under the trade agreement.
Ongoing Trade Barriers
Some federal barriers remain in place despite the push for free trade across Canada and despite Ottawa doing away with 53 exceptions.
The supply management framework for dairy, eggs, and poultry products in Canada, which determines provincial production quotas, will continue after legislation put forward by the Bloc Québécois received royal assent in June.
The legislation, called “An Act to amend the Department of Foreign Affairs, Trade and Development Act (supply management),” is a bid to preserve Canada’s supply management system during future trade negotiations with the United States, but it also keeps in place rules that differ from province to province.
Supply management in Canada operates on a national scale but is implemented at the provincial level. Each province’s marketing board manages its share of the national quota for dairy, poultry, and eggs and allocates it to individual farmers.
The system means small-scale farmers working to develop niche markets and focus on direct sales to local customers cannot enter or expand milk, poultry, or egg production due to minimum quota regulations or low quota exemption thresholds in their province, the National Farmers Union says, citing this as a domestic challenge posed by the system.
Although the One Canadian Economy Act doesn’t deal with supply management concerns, it does address reputational issues that the Canadian industry is slow-moving and gets mired in red tape, a recent report from Deloitte Canada said.
That said, it could be years before Ottawa’s steps to knock down interprovincial trade barriers and build out national infrastructure pay dividends, the report noted. It takes time to reorient supply chains, and the manufacturing industries in some provinces will still take a hit during the adjustment, the report said.
Adopting the “One Canadian Economy” framework “is not a magic wand that changes the landscape,” said Dawn Desjardins, chief economist at Deloitte Canada, but it is “building more resilience in the economy and more room for growth.”
