Ontario’s proposed Protect Ontario Through Free Trade Within Canada Act has the potential to boost the country’s GDP significantly if access is expanded to all provinces, according to a new Economic Note published by the MEI earlier today.
“The growing momentum to eliminate internal barriers to trade in Canada is promising,” says the publication’s author, Trevor Tombe, professor of economics at the University of Calgary and senior fellow at the MEI. “Ontario is taking a decisive step in the right direction by proposing a free trade and mobility law with provinces that emulate it.”
Different regulations, certifications and testing requirements between provinces add costs, complexity and frustration to the process of selling goods and services across provincial boundaries. These many rules are commonly referred to as “interprovincial trade barriers.”
Following U.S. President Donald Trump’s tariff threats, governments across Canada have identified the reduction of these barriers as a way to make the country’s economy more resilient.
Nova Scotia Premier Tim Houston was the first to recommend a model of mutual recognition of standards (without further testing or fees) and accelerated licensure of professional credentials with provinces that reciprocate. This would essentially render moot the vast majority of barriers to interprovincial trade with provinces that adopt similar legislation.
On March 26, 2025, Nova Scotia’s Free Trade and Mobility Within Canada Act received royal assent, becoming law in the province.
“The main benefit of mutual recognition policies is that they bypass the regulatory gridlock that has long plagued interprovincial trade discussions,” said Dr. Tombe. “It’s a trade first, harmonize later approach that allows Canadian consumers and businesses to begin to reap the benefits of these agreements without delay.”
Since then, Premiers Doug Ford and Rob Lantz, of Ontario and Prince Edward Island respectively, have tabled similar bills in their provinces.
Ontario has also signed memoranda of understanding with Manitoba and New Brunswick, enabling mutual recognition of standards and removing some barriers to interprovincial trade.
With the current agreement in place between Ontario and Nova Scotia, for example, Canada’s economy stands to grow by $4.1 billion, according to the MEI publication.
If Ontario were to sign such bilateral mutual recognition agreements with all Canadian provinces, the country’s economy would grow by $82.2 billion.
“More premiers should emulate Premiers Tim Houston and Doug Ford in adopting mutual recognition laws with the rest of the country,” said Dr. Tombe. “It’s one of the surest and lowest-cost ways for provincial governments to unleash Canadian productivity growth.
The MEI economic note is available here: https://www.iedm.org/wp-
