Compared to Trade Between Canada and Foreign States, Internal Trade

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The Answer is Interprovincial trade in Canada has faced a number of significant barriers in comparison to trade between Canada and other countries. While there are no tariffs between countries, the scope of non-tariff barriers is extensive. A significant barrier is that many provincial governments have different business registration requirements and apply them differently to firms with headquarters outside of their borders. Additionally, provincial governments encourage the development of their local industries through offering various forms of subsidies and favouring local contractors for government business, making it difficult for firms outside the province to compete. Finally, provinces have the constitutional authority to set their own legal restrictions on products. This typically results in vast difference in restrictions and regulations on certain products, such as alcohol, tobacco, or cannabis, that make interprovincial trade difficult. Federal and provincial governments have taken important steps to reduce these barriers through signing the Agreement on Internal Trade (AIT) and its successor the Canadian Free Trade Agreement (CFTA), in addition to establishing regional freer trade zones. However, existing laws, regulations, rules, and policies are estimated to cost the economy billions of dollars in lost productivity, demonstrating the extent that these barriers negatively impact the Canadian economy. Critics of free trade point out that these losses are necessary to preserve local authority over things like labour and environmental standards, preventing a 'race-to-the-bottom'.

Compared to Trade Between Canada and Foreign States, Internal Trade

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