Why Canada’s Internal Trade Barriers Remain Despite Calls for a Single Market

Canada’s provinces still act like separate markets even though the government wants a single national economy.

The International Monetary Fund says that eliminating internal trade barriers could raise Canada’s real GDP by about $210 billion – roughly a 7 % increase – over the long term. A more cautious estimate from CIBC predicts a boost of about 1 % to GDP. Last month, nine provinces agreed to let producers sell alcohol directly to consumers across provincial borders, but many provinces have added extra fees and rules on top of the home‑province requirements.

Industry leaders argue that these extra layers are unnecessary. Jeff Guignard, CEO of Wine Growers British Columbia, called the need to pay two wholesale mark‑ups “lunacy” and said provinces treat each other as separate economies.

Academic research is trying to expose the hidden obstacles. Professor Wolfgang Alschner, the Hyman Soloway chair in business and trade law at the University of Ottawa, is using artificial intelligence to catalogue roughly 17,000 regulatory texts and pinpoint where rules diverge without good reason. He points to Ontario’s unique requirement for a U‑shaped toilet seat as a quirky example of a legacy rule that limits trade.

If Canada can replace the patchwork of provincial regulations with a single set of rules, the economy could grow substantially, but the process is slowed by entrenched interests and the sheer volume of existing legislation.

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