BC-Led Pact Removes Interprovincial Product Trade Barriers, Excludes Food

A trade agreement has been ratified by all provinces, territories, and the federal government to eliminate trade barriers, giving businesses more opportunities to sell their products across the country.

The Canadian Mutual Recognition Agreement was signed by all provinces, territories, and Ottawa on Nov. 17. The agreement, which was spearheaded by British Columbia, is set to take effect next month and covers thousands of products, with the exception of food, beverages, tobacco, plants, and animals.

B.C. Minister of Jobs and Economic Growth Ravi Kahlon announced the agreement in Victoria on Nov. 19, although the deal was signed by the country’s trade ministers at a meeting in Yellowknife two days earlier.

Kahlon, who chaired the national initiative, said the deal reduces the bureaucracy that previously stunted free trade from province-to-province.

“This is the largest set of red tape reduction in Canada’s history, and it’s just the beginning,” Kahlon said in a statement. “B.C.’s businesses are among the best in the world, and I can’t wait to see more of them expand their sales across Canada.”

Kahlon says global inflation, along with the instability sparked by U.S. President Donald Trump’s tariffs, has provided Canadians with new urgency to break down interprovincial trade barriers. Trump has slapped multiple tariffs on Canada since spring, and has broken off talks with the Mark Carney-led Liberal government, leaving relations between the two countries strained.

Kahlon said the deal is a starting point for provincial trade.

“We’re committed to continuing to work with our partners to support the free movement of labour, alcohol, financial and other services to make it easier to trade within our borders, and reduce our dependence on the United States,” he said.

A statement on the agreement says it is founded on the principle that if a product can be legally sold in one province or territory, it can likewise be sold in another without additional regulations or approvals.

“Businesses will save time and money by avoiding duplicative testing, certification, and paperwork,” the statement says. “Small and medium-sized enterprises will gain easier access to new markets. Consumers will enjoy more choice and better prices.”

The Canadian Federation of Independent Business said it applauds the signing of the agreement, describing the deal as a “landmark achievement” that will start breaking down the internal trade barriers that impeded small businesses from marketing their products across the country.

“By ensuring that goods approved for sale in one province or territory can be sold in all others, this agreement will help small businesses grow, reduce costs, and improve consumer choice,” CFIB  Alberta & interprovincial affairs director Keyli Loeppky said in a Nov. 19 statement. “The next phase should include expanding the mutual recognition agreement to services, food products, and alcohol, which still face significant internal trade barriers.”

Greater Vancouver Board of Trade CEO and president Bridgitte Anderson offered similar advice, saying the deal should be a starting point to further tap into Canada’s domestic market.

“It is important to encourage the momentum towards further integration and opportunity domestically, especially as we look towards food alcohol as well as improving labour mobility,” she said during a Nov. 19 press conference. “As Canadians, we must meet the moment and build a stronger and more resilient economy in every province and every territory.”

Trade Issues

The federal government announced this summer the removal of all of the remaining federal exemptions from the Canadian Free Trade Agreement (CFTA) that inhibited free trade between the provinces.

The June announcement was made to coincide with the 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, became law on June 26.

All provincial and territorial governments pledged at the time to conduct a review of their individual exceptions under the CFTA, and several provinces also took steps to dismantle certain internal trade barriers by signing memorandums of understanding.

Domestic trade barriers became a major issue in Canada this spring after Trump imposed 25 percent tariffs on all Canadian goods that were not covered by the United States-Mexico-Canada agreement (USMCA).

Trump has increasingly leveraged more tariffs against Canada since then, raising its 25 percent tax on all imports that do not adhere to the USMCA to 35 percent on Aug. 1.

Trump has also implemented a 50 percent tariff on steel, aluminum, and copper imports, a 35 percent tariff on softwood lumber, and a 25 percent tax on all cars and trucks not built in the United States. He more recently put a 100 percent levy on branded drugs whose manufacturers don’t have plants in the United States while imported kitchen cabinets and bathroom vanities will face a 50 percent tariff as of Jan. 1. Imported upholstered furniture will also be slapped with a 30 percent tax in the new year.

The Canadian Press contributed to this report.