Province introduces legislation to remove internal trade barriers

“This legislation just makes sense. It will allow goods and services to be sold in Nova Scotia without further testing or red tape and puts trust in other provinces and territories that have appropriate requirements to keep people safe.”

Previously, officials from the Canadian Federation of Independent Business (CFIB) called on the federal government to reduce taxes and red tape and “implement a mutual recognition agreement to address internal trade barriers”.

Free trade and mobility for Nova Scotia

Nova Scotia’s Free Trade and Mobility within Canada Act is the first of its kind in the country and will help foster an environment of mutual recognition of goods, services and labour mobility across all sectors, said the provincial government.

The act specifically addresses:

• goods manufactured and produced in a reciprocating province or territory will be treated the same as those produced locally in Nova Scotia
• this will eliminate any additional fees or testing requirements for goods from these provinces and territories
• service providers and licensees that are properly certified or licensed in a reciprocating province will be recognized as if they are licensed in Nova Scotia
  • this ensures that businesses providing services can operate across provincial borders without the burden of additional licensing or certification.

The legislation is an important measure for the province, for the following reasons:

• Interprovincial exports contribute about 17% of Nova Scotia’s gross domestic product.
• Interprovincial exports make up about half of Nova Scotia’s total exports (about 48% of all goods and services).
• In 2023, the value of Nova Scotia’s interprovincial exports was nearly $29 billion
• One-third of Canadian businesses participated in internal trade by buying or selling goods across provincial or territorial borders.
• More than $530 billion worth of goods and services moves across provincial and territorial borders every year – equal to 20% of Canada's gross domestic product.

In 2024, the federal government launched a Canadian Internal Trade Data and Information Hub (CITH), which provides open and accessible pan-Canadian data on key economic sectors.

Removal of internal trade barriers should be government’s priority: survey

This is a positive step forward, according to CFIB.

“It's been very heartening to see so much attention on the urgent need for open trade within Canada. We applaud Premier Tim Houston's plan to introduce legislation to tear down trade barriers with provinces that would do the same and urge all other provinces and territories to follow suit immediately,” said 

“We have a real opportunity to fix a long-term challenge, but governments need to act now.”

The move also aligns with employers’ sentiment. In fact, nearly 90% of small businesses say removing internal trade barriers should be a priority for governments, according to CFIB’s survey of 2,750 respondents, conducted April 4 to 22, 2024.

Half (50%) said internal trade barriers harm production, the same share said they harm expansion, while about nine in ten (87%) agree that food produced in provincially/territorially licensed or inspected facilities should be able to be sold in all provinces/territories.

CFIB recommendations

The CFIB is calling on governments to immediately adopt mutual recognition policies and agreements to allow goods and services approved in one province to be sold and used in all other provinces without additional requirements. The group is also calling on provincial and territorial governments to:

• eliminating the remaining Canadian Free Trade Agreement (CFTA) exceptions
• immediately implement outstanding agreed-to items from the Regulatory Reconciliation and Cooperation Table work plan
• working with professional colleges to streamline credential recognition processes to make it easier for skilled workers to move and work anywhere in Canada
• legislate timelines for professional certification approval of workers certified in other Canadian jurisdictions
• liberalize the interprovincial alcohol trade

Recently, Anita Anand, Canada’s minister of transport and internal trade, announced the upcoming removal of an additional 20 federal exceptions in the CFTA, reducing the number of federal exceptions from 39 to 19.

“One of Canada’s strongest trading partners is… Canada. We are all hands on deck to promote freer trade here at home.,” said Anand. “The removal of these federal exceptions from the CFTA is yet another step towards eliminating barriers to internal trade, reducing costs for Canadian businesses, increasing productivity and foreign investment, and adding billions to the Canadian economy.”

The majority of exceptions removed relate to government procurement, providing Canadian businesses greater opportunity to compete across the country.

Eliminating barriers to internal trade will reduce business costs, increase productivity, and potentially add up to $200 billion to the Canadian economy, according to the federal government.

Last year, more than $530 billion worth of goods and services moved across provincial and territorial borders, representing almost 20% of Canada’s gross domestic product.

The CFTA came into force on July 1, 2017.

In the face of the US tariffs threat, Anand and her provincial and territorial counterparts have been discussing possible moves to eliminate regulatory barriers to internal trade, encourage free movement of labour and further standardize regulations across Canada.