The push for a “One Canadian Economy” Act represents a strategic imperative for Canada: to eliminate the costly and inefficient interprovincial trade barriers that fragment our internal market. The goal is to fully liberalize domestic trade, a goal that has gained new urgency due to volatile trade relations with the United States.

What is it? What are its main features?

It was designed to ensure the free flow of goods, services, capital, and labour across all provincial and territorial borders in Canada.

Its main features would focus on:

• Mutual Recognition: The bedrock principle is that if a product, service, or occupational credential is approved in one jurisdiction, it should be automatically accepted everywhere else in Canada. This eliminates redundant regulations and paperwork.

• Harmonization of Regulations: Encouraging the standardization of rules and technical specifications across provinces to reduce the compliance burden on businesses operating nationally.

• Efficient Dispute Resolution: Establishing a clear, timely, and enforceable mechanism for resolving conflicts related to interprovincial trade barriers.

• Transparency: Making existing trade regulations publicly accessible and easy to understand to improve business planning.

Canada’s need to turbo-boost its own economy

The primary, long-standing reason is purely economic efficiency: interprovincial barriers are estimated to cost the Canadian economy billions of dollars annually—by some measures, up to 4% of GDP per capita.

However, the urgency to act now is amplified by geopolitical risk and trade volatility with Canada’s largest trading partner, the United States.

Canada has historically been exceptionally reliant on the US market, with over three-quarters of our exports destined south of the border. Recent trade disputes, which have seen the US impose and threaten tariffs on key Canadian sectors like steel, aluminum, and autos, have highlighted the precarious nature of this dependence.

This situation has forced Canada to confront the fact that it can no longer be complacent and rely on the US to always be a stable, reliable trading partner. By creating a truly open and resilient internal market, Canada strengthens its domestic economic foundation, making it less vulnerable to external trade shocks and unpredictable foreign policy.

How will it help the economy?

By breaking down the internal trade barriers—which often make it easier for Canadian companies to trade internationally than domestically—the Act is expected to unlock significant economic benefits:

• Increased Productivity and Growth: Lowering the cost of doing business and reducing regulatory red tape allows companies to achieve greater economies of scale and become more innovative, boosting national productivity.

• Lower Consumer Prices: Eliminating costs equivalent to a high internal tariff (estimated up to 14.5% on goods and services) will lead to lower prices for consumers and increased competition.

• Enhanced Labour Mobility: Standardizing professional credentials allows skilled workers—from plumbers to nurses—to move freely to provinces where they are most needed, addressing critical labour shortages and improving economic responsiveness.

• National Resilience: A larger, integrated domestic market acts as a critical economic shock absorber, helping Canadian businesses weather future disruptions in global trade or trade wars.

How Will This Benefit Canada?

The main goal of removing internal trade barriers is to give a massive, sustained economic boost to the country. Economists widely agree that this move could add anywhere from $50 billion to over $200 billion to Canada’s annual GDP, acting like a homegrown economic stimulus. This money is currently lost to the inefficiency of having 13 separate sets of rules.

The Financial ranges and potential gains

The difference in estimates is due to varying assumptions on which barriers can be removed (e.g., alcohol trade versus professional certifications) and how quickly provinces will act.

• Annual Economic Boost: Studies suggest that fully liberalizing trade could add between $50 Billion (conservative estimate) and up to $200 Billion (high-end estimate) to Canada’s Gross Domestic Product (GDP) every year. The higher-end figure is often cited by the Government of Canada (Statement on Eliminating Trade Barriers) and major institutions, including the C.D. Howe Institute (Provinces Need to Play if Internal Trade Barriers are to Fall).
• Per-Person Wealth: This economic growth would translate into significant personal gains. The federal government has projected that the increase in efficiency is equivalent to $5,100 per person being added to the economy annually.
• Consumer Savings: By removing the “internal tariffs” of regulation and duplication, consumers are projected to see a long-term reduction in prices for many goods and services, potentially lowering costs by up to 14.5% (Tombe & Brown, cited by the Public Policy Forum (Interprovincial Trade Barriers: What They Are and Why They Matter)).

The Debate: Optimistic vs. Conservative

While the general consensus is positive, there are two distinct sides to the economic argument:

• The Optimistic View: Proponents argue that the full high-end potential of $200 Billion is achievable by focusing on mutual recognition of professional credentials and opening up government procurement. They emphasize that this will immediately create thousands of new jobs and make Canadian firms more resilient against global trade disputes.
• The Conservative View: Critics, including the Canadian Centre for Policy Alternatives (CCPA, 2025), argue that the economic benefits are “significantly overstated.” They caution that the real gains will be much more modest and that an aggressive push for harmonization could risk weakening important provincial environmental or safety standards (The Premiers’ New Clothes).