--- title: "A Truly United Canadian Economy: What will it Take?" description: "In 2025, in response to external threats, Canada pushed to once again dismantle its internal economic borders and unify its national market with its most aggressive agenda yet." image: "https://yorkfactory.buildcanada.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6MTc0OCwicHVyIjoiYmxvYl9pZCJ9fQ==--6efc0ce86cc1c040c14c2dd62f98f30319b956bd/united-economy-splash.png" author: "Wayne Pommen" published: "2026-08-10T03:39:00.000Z" canonical: "https://www.buildcanada.com/memos/a-truly-united-canadian-economy" --- # A Truly United Canadian Economy: What will it Take? ## Key Messages 1. In 2025, in response to external threats, Canada pushed to once again dismantle its internal economic borders and unify its national market with its most aggressive agenda yet. 2. As progress falls behind schedule and deadlines loom with little confidence of accomplishment, it’s time for a new approach. 3. Use federal transfers, a “internal-trade dividend”, to incentivize provinces towards timely progress towards adopting reciprocal mutual recognition, expansively defined to include services and labour. ![interprovincial-trade-barrier-tracker-build-canada.png](https://yorkfactory.buildcanada.com/rails/active_storage/blobs/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTc0NywicHVyIjoiYmxvYl9pZCJ9fQ==--51f94c1e9a1b1413eb37fbb643393a0f68031c9f/interprovincial-trade-barrier-tracker-build-canada.png) [_Build Canada’s Trade Barriers Tracker_](https://www.buildcanada.com/trade-barriers) _identifies & logs all progress made on the interprovincial trade file. Progress has been slow\._ ## Summary In 2025 an external tariff shock pushed Canada to try again at dismantling its long-standing internal economic borders. For a rare moment, political will formed quickly, the file dominated headlines, and it seemed as if this was finally it — the internal Canadian market would unify. ![canada-interprovincial-flags.png](https://yorkfactory.buildcanada.com/rails/active_storage/blobs/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTc0NSwicHVyIjoiYmxvYl9pZCJ9fQ==--0c573c148ba3695ebd1eb64b1f965f964d1ab875/canada-interprovincial-flags.png) _Provincial flags posted by the [Senate of Canada](https://sencanada.ca/media/363899/com_pho_hdr_provincial-flags.jpg)_ Ottawa, to its credit, seized the moment and moved quickly on the file: Bill C-5 set up federal mutual recognition and removed all 53 federal exceptions to the Canadian Free Trade Agreement[1](https://www.parl.ca/legisinfo/en/bill/45-1/C-5),[2](https://www.canada.ca/en/intergovernmental-affairs/services/internal-trade/federal-investments-internal-trade.html). Of the CFTA’s 296 exceptions, 202 remain, each one provincial[2](https://www.canada.ca/en/intergovernmental-affairs/services/internal-trade/federal-investments-internal-trade.html). Then, unfortunately, the file stalled. The provinces ran late on their own deadline to open direct-to-consumer alcohol sales, and Minister LeBlanc has conceded that the year-end goals may not be reached[2](https://www.canada.ca/en/intergovernmental-affairs/services/internal-trade/federal-investments-internal-trade.html),[3](https://www.canada.ca/en/intergovernmental-affairs/news/2026/05/statement-from-minister-leblanc-urging-provinces-and-territories-to-follow-through-on-commitment-to-implement-direct-to-consumer-alcohol-sales.html). It really seems that political and public attention has moved on. For followers of the file, this is frustrating. There is still so much more work to be done. The IMF, studying Canada’s internal borders, found that about four-fifths of the roughly $110–200-billion in potential gains sits in services and unified regulation[4](https://www.imf.org/en/news/articles/2026/01/27/cf-canada-can-grow-faster-by-unlocking-its-own-market). _Share of estimated long-run GDP gains from removing internal barriers. Source: IMF, “Canada Can Grow Faster by Unlocking Its Own Market,” January 27, 2026_[4](https://www.imf.org/en/news/articles/2026/01/27/cf-canada-can-grow-faster-by-unlocking-its-own-market)_; figures are IMF modelled estimates._ [Share of estimated long-run GDP gains from removing internal trade barriers](https://datawrapper.dwcdn.net/4z3d6/1/) Unifying the national economy is of utmost importance to unleash the Canadian free market. We cannot dream of building a global economic powerhouse if there are ten segmented markets each acting in their own interest on regulation. If we wish to see our nation thrive, we must ensure the full Canadian market is available to all Canadians – both in labour supply and access to buyers. Author Wayne Pommen and Build Canada have put forward a solution before[5](https://www.buildcanada.com/memos/interprovincial-trade). This memo proposes a stronger approach than the goodwill of last round: put real federal money behind provincial reform with cash incentives for removing barriers. ## The Problem: Negotiating with 14 Parties ![council-of-the-federation.jpg](https://yorkfactory.buildcanada.com/rails/active_storage/blobs/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTc0NiwicHVyIjoiYmxvYl9pZCJ9fQ==--ac47955bb6f548369017b9e967442073e38355c6/council-of-the-federation.jpg) _Council of the Federation in Charlottetown, PEI this [passing July](https://news.novascotia.ca/en/2026/07/23/council-federation-meeting-concludes)._ ### How the momentum slipped In March 2025, the national media published a bold promise by the Prime Minister: “…from a federal level… free trade by Canada Day”[6](https://www.cbc.ca/news/politics/carney-premiers-meeting-1.7489368) And yes, on the federal side, that promise was kept: C-5 passed on June 26 and every federal CFTA exception was removed[1](https://www.parl.ca/legisinfo/en/bill/45-1/C-5),[6](https://www.cbc.ca/news/politics/carney-premiers-meeting-1.7489368). But “free trade by Canada Day” was only really a promise made by Ottawa. Most of the legwork was required by the provinces who, to be fair, did commit – repeatedly, and on the record. Nova Scotia passed the country’s first reciprocal mutual-recognition law in February 2025[7](https://news.novascotia.ca/en/2025/02/25/legislation-remove-barriers-trade); Ontario and P.E.I. followed with legislation of their own that April[8](https://news.novascotia.ca/en/2025/04/16/ontario-pei-join-nova-scotia-legislation-remove-internal-trade-barriers), alongside a wave of bilateral MOUs. By November 2025, every province and territory had signed the mutual-recognition agreement on goods, ten jurisdictions had promised direct-to-consumer alcohol sales by May 2026, and ministers had committed to a 30-day labour-mobility service standard[2](https://www.canada.ca/en/intergovernmental-affairs/services/internal-trade/federal-investments-internal-trade.html),[9](https://www.cfta-alec.ca/cmra). However, since then, the provincial track has stalled. Ten jurisdictions signed a memorandum to allow direct-to-consumer alcohol sales by the end of May 2026; the implementation deal came two months late, and Minister LeBlanc has acknowledged that the broader year-end targets — including extending recognition to services — may not be met[2](https://www.canada.ca/en/intergovernmental-affairs/services/internal-trade/federal-investments-internal-trade.html),[3](https://www.canada.ca/en/intergovernmental-affairs/news/2026/05/statement-from-minister-leblanc-urging-provinces-and-territories-to-follow-through-on-commitment-to-implement-direct-to-consumer-alcohol-sales.html). A somewhat expected result when there are self-imposed deadlines with no real stakes or meaning towards completing the work. ### The Continued Complication With all 53 federal exceptions removed, the 202 that remain of the CFTA’s original 296 are provincial or territorial[2](https://www.canada.ca/en/intergovernmental-affairs/services/internal-trade/federal-investments-internal-trade.html). Of course, they are the hard ones — professional licensing, provincial product standards, who may sell alcohol — matters of property and civil rights that our Constitution defines Ottawa cannot legislate. _Exhibit 2 — Canadian Free Trade Agreement exceptions, removed since January 2025 versus still in place. Source: canada.ca, “Advancing internal trade,” modified January 28, 2026; accessed July 7, 2026._ [CFTA exceptions: removed since January 2025 vs. still in place](https://datawrapper.dwcdn.net/IAXfQ/1/) The Supreme Court set the outer limit in Comeau 2018. Section 121 bars laws aimed at restricting interprovincial trade but tolerates incidental effects, so a unified Canadian economy cannot be ordered into existence by Ottawa – it has to be built with intent from the provinces[10](https://www.canlii.org/en/ca/scc/doc/2018/2018scc15/2018scc15.html). This is no new issue. It has been decades of back and forth between the federal government, provincial governments, and the people trying to determine how free trade can be achieved in Canada. The Constitutional complications and provincial desires have always been the challenge. ## A New Approach to an Old Problem The instinct so far has been to convene the premiers, agree on a principle, set a deadline, and shake hands. This model has run its course. Case in point, the delayed alcohol progress: transparency and a shared timeline do not move a government that would rather not move. Goodwill just is not enforcement. What the file needs now is a legitimate incentive and consequence system. ### The Rationale We should note – this is not an argument for aggressive federalism, nor is it for Ottawa reaching for provincial powers. It is an argument for the free market – for the entrepreneur who should be able to sell in ten provinces as easily as one, the worker whose licence should travel with them, and the prosperity that a unified market of forty million people would produce. In today’s environment, with external trade under pressure, an open internal market is a necessity. If the national political will for a unified economy exists, more forceful tools are absolutely warranted. There is exactly one such tool that respects the constitution: the federal spending power, used openly and on the record. ### The Recommendation Ottawa should condition a defined share of federal funding — infrastructure dollars, major-project financing, or a dedicated **“internal-trade dividend”** — on a province adopting reciprocal mutual recognition, expansively defined to include services and labour, and placing its remaining CFTA exceptions on a binding sunset[11](https://www.cmhc-schl.gc.ca/professionals/project-funding-and-mortgage-financing/funding-programs/all-funding-programs/housing-accelerator-fund),[12](https://www.newwestpartnership.com/). We can compare this to the existing Housing Accelerator Fund model, which bought municipal zoning reform with federal cash structured as a reward for measured outcomes rather than a mandate[11](https://www.cmhc-schl.gc.ca/professionals/project-funding-and-mortgage-financing/funding-programs/all-funding-programs/housing-accelerator-fund). These are strong mechanics. A province that opens up, collects. A province that sits still forgoes money its neighbours are taking. This comes with incentives and consequences – the enforcement the file has been missing. There are three key design points: 1. **Be expansive on services and labour from the start.** Qualification for the dividend should require mutual recognition across services — finance, transportation, the professions the IMF flags — and automatic “as-of-right” labour mobility, where a worker certified in one province is certified in all, effective on filing. We can look to Australia’s 2021 automatic mutual recognition for inspiration[13](https://www.dewr.gov.au/skills-support-individuals/mutual-recognition). 2. **Structure it as a reward that scales.** Fund it from existing transfer growth, phase it in, and have the payout scale as barriers are removed — not as promises are made. A province keeps a rule by publishing an evidence-based reason; it forfeits the corresponding share of the dividend for as long as the rule stands. No penalties or clawbacks from existing transfers but new money, earned by opening. 3. **Publish a quarterly report.** Statistics Canada should publish a standing barrier register and a quarterly scorecard of what each government has removed and what it still holds, built on its internal-trade hub[14](https://www.statcan.gc.ca/hub-carrefour/cith-ccci/index-eng.htm),[15](https://www.cfib-fcei.ca/en/research-economic-analysis/state-of-internal-trade-canadas-interprovincial-cooperation-report-card). Its job is to make inaction visible to the public, to show who has earned the dividend and who has left it on the table. ### Funding Source The conditional transfers should be funded from existing transfer growth and structured as incentives that scale with results, not as open-ended new spending. The federal cost is bounded and, on the government’s and IMF’s own estimates, small against the growth unlocked[2](https://www.canada.ca/en/intergovernmental-affairs/services/internal-trade/federal-investments-internal-trade.html),[4](https://www.imf.org/en/news/articles/2026/01/27/cf-canada-can-grow-faster-by-unlocking-its-own-market). No measure here crosses the threshold that would require full costing. ### Risks Ottawa still cannot forcibly compel a province. A conditional transfer is leverage by definition, and thus a province can refuse the money along with the conditions. Quebec has historically resisted federal conditionality, and the spending power is politically contested even where it is legally settled. Not every barrier is reachable by money alone. Even apparent federal fixes, like the CFIA’s proposal to recognize provincial meat inspection, depend in practice on provinces agreeing to provide oversight[16](https://gazette.gc.ca/rp-pr/p1/2026/2026-06-27/html/reg1-eng.html). There is no guarantee of a single market with this approach, however it is still our best option. There are two further standing objections that have answers built into the design. The first is that mutual recognition lets a weaker standard travel across borders – for example, a lower particular service credential standard in Saskatchewan would open a loophole in BC. We will argue that it does not, if there is allowance for evidence-based objection before finalization of the proposed changes, acting as a safety valve for provinces[17](https://macdonaldlaurier.ca/liberalizing-internal-trade-through-mutual-recognition-a-legal-and-economic-analysis/). The second is that money-for-reform is federal overreach. We will argue that it is structured as a reward for a measurable outcome, phased, voluntary, and respectful of jurisdiction — exactly as the Housing Accelerator Fund was[11](https://www.cmhc-schl.gc.ca/professionals/project-funding-and-mortgage-financing/funding-programs/all-funding-programs/housing-accelerator-fund). The sharpest risk, as always, is the status quo: another year of deadlines that pass in silence, while four-fifths of the prize stays locked[4](https://www.imf.org/en/news/articles/2026/01/27/cf-canada-can-grow-faster-by-unlocking-its-own-market). ## Conclusion _One country._ These borders are not imposed on Canada from outside; Canadians built them, and only Canadians can take them down. Completing unification of the Canadian economy is finally a test of whether the country will use the tools it holds rather than waiting for a consensus that never quite arrives. ## Sources - **\[1]** Parliament of Canada, LEGISinfo — Bill C-5, One Canadian Economy Act (45th Parliament, 1st Session), enacting the Free Trade and Labour Mobility in Canada Act; Royal Assent June 26, 2025. — Federal statutory framework recognizing comparable provincial/territorial requirements as meeting federal requirements for interprovincial movement of goods, services, and labour. - **\[2]** Government of Canada (Intergovernmental Affairs), “Advancing internal trade,” modified January 28, 2026. — Over $500B in goods and services crosses internal borders yearly (approx. 20% of GDP); one-third of businesses trade internally; removing barriers could add up to $200 billion (approx. $5,100/person); Bill C-5 received Royal Assent June 26, 2025; the Free Trade and Labour Mobility in Canada Act came into force January 1, 2026; all 53 federal CFTA exceptions removed; since January 1, 2025 governments removed 94 (30%) of 296 CFTA exceptions, 202 remain; November 19, 2025 Committee on Internal Trade signed the CMRA, endorsed a trucking MOU, reached agreement in principle on the CFTA financial-services chapter (entry into force expected May 2026), committed to a 30-day labour-mobility service standard and a digital verification tool, and ten jurisdictions signed a direct-to-consumer alcohol MOU (operating agreements due May 2026); FLMM Action Plan flags thirteen occupations for review; StatCan Internal Trade Data and Information Hub launched. - **\[3]** Government of Canada (Intergovernmental Affairs), “Statement from Minister LeBlanc urging provinces and territories to follow through on commitment to implement direct-to-consumer alcohol sales” (May 2026). And “Statement from Minister LeBlanc highlighting need for ambition following meeting of Committee on Internal Trade” (June 2026). — The missed May 2026 direct-to-consumer alcohol deadline and doubt over year-end goals. Corroboration: The Globe and Mail, “Blown deadline for provincial alcohol shipments bodes poorly for broader internal trade push.” - **\[4]** International Monetary Fund, “Canada Can Grow Faster by Unlocking Its Own Market” (Country Focus, January 27, 2026), drawing on the 2025 Article IV Consultation (PR 26/012, January 21, 2026). — Removing internal trade barriers could raise output by about 7 percent; roughly four-fifths of the gains come from liberalizing services, which the 2025 goods agreement does not cover. - **\[5]** Build Canada, “Good in One Province, Good in All” (February 2025), by Wayne Pommen. — The original memo this update builds on. - **\[6]** CBC News, “Carney aims to have ‘free trade by Canada Day’ between provinces and territories” (March 2025). Corroboration on the outcome: CBC News, “Is Canada now free of internal trade barriers? Not yet, says expert” (July 2025). — The “free trade by Canada Day” promise and its federal-only fulfillment. - **\[7]** Government of Nova Scotia, “Legislation to Remove Barriers to Trade” (news release, February 25, 2025). — Nova Scotia’s Free Trade and Mobility within Canada Act — the country’s first reciprocal mutual-recognition law. - **\[8]** Government of Nova Scotia, “Ontario, P.E.I. Join Nova Scotia With Legislation to Remove Internal Trade Barriers” (news release, April 16, 2025). — Ontario and P.E.I. reciprocal legislation following Nova Scotia’s model. - **\[9]** Internal Trade Secretariat / Canadian Free Trade Agreement, “Canadian Mutual Recognition Agreement on the Sale of Goods (2025).” — Signed November 19, 2025 by the federal government and all provinces and territories; a good lawfully sold in one province may be sold across Canada unless a government lists a retained requirement in its annex; excludes food, live animals, alcoholic beverages, cannabis, tobacco, and plants; does not apply to how a good is sold or who may sell or purchase it. - **\[10]** Supreme Court of Canada, R. v. Comeau, 2018 SCC 15 (CanLII). — Section 121 of the Constitution Act, 1867 prohibits laws whose primary purpose is to restrict interprovincial trade, but not laws with only incidental effects on it; New Brunswick’s personal-importation limits on alcohol were upheld. - **\[11]** Canada Mortgage and Housing Corporation, Housing Accelerator Fund. — $4.44 billion over five years (2023-24 through 2027-28); approximately 230 agreements with $4.37 billion committed, per Parliamentary Budget Officer, “An Update on the Housing Accelerator Fund” (2025). [https://www.pbo-dpb.ca/en/additional-analyses–analyses-complementaires/BLOG-2526-005–an-update-housing-accelerator-fund–point-fonds-accelerer-construction-logements](https://www.pbo-dpb.ca/en/additional-analyses--analyses-complementaires/BLOG-2526-005--an-update-housing-accelerator-fund--point-fonds-accelerer-construction-logements) — The conditional-transfer design model: federal cash in exchange for measurable local reform. - **\[12]** New West Partnership Trade Agreement (British Columbia, Alberta, Saskatchewan, Manitoba). — A four-province agreement that mutually recognizes each member’s standards and registrations, so a good, service, worker, or business approved in one province is recognized in the others — the domestic precedent for automatic, nationwide mutual recognition. - **\[13]** Australian Government, Automatic Mutual Recognition (AMR) of occupational registrations (commenced July 1, 2021; Mutual Recognition Amendment Act 2021). — A worker registered in one participating state or territory is deemed registered in another without a new application; Queensland did not initially join, illustrating the hold-out risk. - **\[14]** Statistics Canada, Canadian Internal Trade Data and Information Hub. — Federal data platform on interprovincial trade and barriers; over $500B in goods and services moves across internal borders annually. The proposed public barrier register and scorecard would be built on this hub. - **\[15]** Canadian Federation of Independent Business, “The State of Internal Trade: Canada’s Interprovincial Cooperation Report Card” (2025). — Ontario and Nova Scotia scored the top grade; more progress on internal trade in the past six months than in the eight years since the CFTA; warns that seven jurisdictions taking seven different approaches to mutual recognition risks a patchwork that recreates barriers. - **\[16]** Canada Gazette, Part I, Vol. 160, No. 26 (June 27, 2026), “Regulations Amending the Safe Food for Canadians Regulations (Unmet Slaughter Capacity).” With CFIA news release, July 2026: — Proposed time-limited (four-year) exemptions allowing interprovincial movement and sale of red meat where slaughter capacity is unmet, granted only with provincial support and where the trading provinces provide food-safety oversight, subject to CFIA risk assessment; comment period closes August 26, 2026. - **\[17]** Ryan Manucha and Trevor Tombe, “Liberalizing internal trade through mutual recognition: A legal and economic analysis,” Macdonald-Laurier Institute (2022). — Estimates mutual recognition could raise long-run GDP by 4.4–7.9%; the legal and economic foundation for the recognition-first approach, including the evidence-based objection safeguard. ## Supporters [Richard Abboud](https://www.linkedin.com/in/richard-abboud/), [Jeff Adamson](https://www.linkedin.com/in/jeffadamson/), [Alex Conconi](https://www.linkedin.com/in/alexfconconi/), [Daniel Debow](https://www.linkedin.com/in/ddebow/), [Daniel Eberhard](https://www.linkedin.com/in/danieleberhard/), [Lucy Hargreaves](https://www.linkedin.com/in/lucyghargreaves/), [Toby Shannan](https://www.linkedin.com/in/toby-shannan-a8450910/), [Brice Scheschuk](https://www.linkedin.com/in/brice-scheschuk-cpa-ca-095721a/) --- ```json { "@context": "https://schema.org", "@graph": [ { "@type": "Organization", "name": "Build Canada", "url": "https://www.buildcanada.com", "description": "Build Canada is a civic organization on a mission to make Canada the most prosperous country in the world.", "logo": "/assets/logos/logo-standard.svg", "sameAs": [ { "platform": "x", "url": "https://x.com/buildcanada" }, { "platform": "linkedin", "url": "https://www.linkedin.com/company/buildcanada" }, { "platform": "tiktok", "url": "https://www.tiktok.com/@build_canada" }, { "platform": "instagram", "url": "https://www.instagram.com/build_canada/" }, { "platform": "substack", "url": "https://buildcanada.substack.com/" }, { "platform": "youtube", "url": "https://www.youtube.com/@BuildCanada" } ] }, { "@type": "Article", "headline": "A Truly United Canadian Economy: What will it Take?", "description": "In 2025, in response to external threats, Canada pushed to once again dismantle its internal economic borders and unify its national market with its most aggressive agenda yet.", "image": "https://yorkfactory.buildcanada.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6MTc0OCwicHVyIjoiYmxvYl9pZCJ9fQ==--6efc0ce86cc1c040c14c2dd62f98f30319b956bd/united-economy-splash.png", "datePublished": "2026-08-10T03:39:00.000Z", "dateModified": "2026-08-10T03:39:00.000Z", "author": { "@type": "Person", "name": "Wayne Pommen", "jobTitle": "", "image": "https://yorkfactory.buildcanada.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6MzA5LCJwdXIiOiJibG9iX2lkIn19--62533e5e3a91568dc41a3e2f9533be72829a1261/67a12a88a619e20486f80dde_1544638578871.jpeg", "sameAs": [ "https://x.com/WaynePommen", "https://www.linkedin.com/in/wayne-pommen-8844021/" ] }, "publisher": { "@type": "Organization", "name": "Build Canada", "logo": { "@type": "ImageObject", "url": "/assets/logos/logo-standard.svg" } }, "mainEntityOfPage": { "@type": "WebPage", "@id": "https://www.buildcanada.com/memos/a-truly-united-canadian-economy" } }, { "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://www.buildcanada.com" }, { "@type": "ListItem", "position": 2, "name": "Memos", "item": "https://www.buildcanada.com/memos" }, { "@type": "ListItem", "position": 3, "name": "A Truly United Canadian Economy: What will it Take?", "item": "https://www.buildcanada.com/memos/a-truly-united-canadian-economy" } ] } ] } ```