A New Canadian Economy
By Josh Segal
Tariffs. An ever-progressing issue in Canadian business and politics since newly inaugurated US President Trump has weaponized threats to place them on Canada. While the enactment of the 25% universal tariff on Canadian goods has been delayed, Trump has placed a 25% tariff on all steel and aluminum being imported to the US, effective March 4th (The Guardian, 2024). Prime Minister Trudeau has since responded, promising dollar-for-dollar parallel tariffs, likely furthering the possibility of a trade war with our closest ally (The Guardian, 2024).
If this impending economic crisis has elucidated anything, it is that Canada is far too reliant on the US for trade at present. In 2023, exports to the US accounted for roughly 19% of Canada's total GDP (McNally, 2025). Beyond the United States' contribution, roughly 66% of Canada's GDP comes from international trade, while only 36% is actually produced from interprovincial trade, which can be deemed extremely low (Poilievre, 2025). This begs the question, despite Canada's vast resources and unique products, why is it easier to trade internationally rather than interprovincially? The answer: Provincial trade barriers.
Canada is one of the most resource-rich countries in the world. Ranking 4th globally in natural resources due to having the third largest oil deposits, as well as significant deposits of minerals, metals, and coal (Anthony, 2016). Despite this, Canada only ranks 10th in the world in terms of GDP (Worldometre). Why, despite being remarkably blessed with an abundance of natural resources, has the country failed to properly utilize it? This can be partially attributed to our main trading partner, the US, not needing our resources as they are statistically the most resource-rich country in the world (Anthony, 2016). Additionally, it is also due to Canada's lack of interprovincial free trade. There are varying causes of these trade barriers, “Some provinces block trade to benefit their own local corporations” (Poilievre, 2025) explains Conservative leader Pierre Poilievre. Other barriers can be attributed to varying health and safety standards, trucker and load regulations, and certificates that are not transferable to certain provinces. “A lot of barriers just don't make sense” (Trudeau, 2025), explains sitting Prime Minister Justin Trudeau.
These seemingly unnecessary regulation variances were evident in the early 2000s when Alberta could not share their harvest with BC after a drought in BC due to varying truckload regulations (Benchetrit, 2025). Canadian economist Trevor Tombes, predicts that by lowering trade barriers, Canada can boost its economy by roughly 200 billion annually, or 7.9%.
The potential resulting issue is how do you convince all premiers to cooperate. Removing barriers may make it more difficult for local businesses and corporations to compete. Pierre Poilievre proposes that the way to encourage provinces to adhere to these new trade policies is to introduce a reward system that provides provinces with incentives that reward the removal of unnecessary regulations. The rewards would be calculated by using a percentage of the resulting GDP increase, therefore not affecting taxpayers (Mohamed, 2025). Additionally, Canadians would be able to purchase a wide variety of products, while allowing businesses to access a previously inaccessible market.
Canada would be a much more efficient country by allowing provinces to truly specialise. Maritime provinces would be able to export seafood at a much lower price to the rest of the country. BC, Ontario, and Quebec could transport significantly more lumber and pulp per load, reducing prices. It would be cheaper for the rest of Canada to access Alberta’s gas and oil industry, and the list goes on (BC Stats, 2025). As a result, Canada would be able to boost GDP through utilising our own natural resources, as well as becoming a much more self-sufficient country.
Trudeau has already indicated that all premiers are on board (Trudeau, 2025), insinuating that lowering barriers is a priority for all provinces.
With the cooperation of politicians and corporations alike, lowering trade barriers is an easy and long overdue tactic to allow Canada to thrive. Ultimately, by removing unnecessary red tape, Canada can be a wealthier, more independent nation that can enjoy our own beautiful products from coast to coast.
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