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Removing internal trade barriers would help mitigate damage from Trump tariffs

Published

6 hours ago

4 minute read

From the Fraser Institute

By Jake Fuss

President Trump’s tariffs have prompted renewed interest among federal and provincial policymakers to remove interprovincial trade barriers in Canada to mitigate some of the economic damage. But whatever happens with U.S. policy, with a new prime minister and a federal election looming, trade liberalization within our provincial borders is long overdue.

For decades in Canada, government policies have created substantial barriers to investment, trade and migration between provinces and territories, which hinder the free movement of workers, goods and services in Canada and limit economic growth.

These trade barriers include differences in licencing recognition and safety rules, trucking regulations, credential recognition, provincial monopolies over alcohol distribution, and strict restrictions on the sale of certain goods across provincial borders. This complex array of policies, unique to each province and territory, creates compliance challenges, additional costs for businesses and higher prices for consumers.

According to a 2019 report from the International Monetary Fund, internal trade barriers add between 7.8 per cent and 14.5 per cent to the prices of goods and services purchased by Canadians—that’s more than the GST (5.0 per cent). The harm to the broader economy is also no secret. Research by Ryan Manucha and Trevor Tombe estimates internal trade barriers cost the national economy as much as $200 billion annually.

And when workers are able to use their credentials obtained in one province to get jobs in other provinces, they have more opportunity. At the same time, businesses benefit from an expanded pool of qualified workers.

Again, provincial premiers and federal representatives recently met to discuss reducing trade barriers. For example, the federal government announced plans to strengthen the Canada Free Trade Agreement (CFTA)—a 2017 agreement intended to eliminate barriers for the movement of people, goods and services within Canada. The CFTA has been plagued with an abundance of exceptions that allow Canadian governments across the country to exclude many industries (i.e. dairy and poultry) or specific legislation from the agreement. The government has pledged to remove more than half of these exceptions to allow for more consistent rules and regulations across provinces.

While this is a step in the right direction, it doesn’t go nearly far enough. Working alongside the provincial and territorial governments, federal policymakers should propose a policy of “mutual recognition” so any good, service or professional credential that meets the regulatory requirements of a single province or territory automatically satisfies the requirements of another.

Research shows mutual recognition would increase Canada’s GDP per person—a broad measure of living standards—between $2,900 to $5,100 over the long term.

Provinces can also act on their own through bilateral or multilateral partnership agreements to harmonize regulations and improve worker mobility. One option is to expand the scope of the New West Partnership Trade Agreement (NWPTA) between British Columbia, Alberta, Saskatchewan and Manitoba, and include more provinces in the agreement.

Given President Trump’s aggressive stance on tariffs, federal and provincial policymakers must create an integrated internal trade market in Canada to offset some of the potential economic damage. By eliminating trade barriers, governments across the country can help increase the ability of workers and businesses to prosper, decrease prices, raise household incomes and improve living standards.

Jake Fuss

Director, Fiscal Studies, Fraser Institute
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Trump’s EPA, DOGE join forces to cut Biden era grants totaling $1.7 billion, looking for billions more

Published on March 17, 2025

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From LifeSiteNews

By Matt Lamb

LaTricea Adams served on President Joe Biden’s Environmental Justice Advisory Council. At the same time, she applied for a grant on behalf of her nonprofit Young, Gifted & Green – and received $20 million, according to the Washington Free Beacon. The grant is about 10 times the annual revenue of the nonprofit…

The Environmental Protection Agency (EPA) continues to cut wasteful grants and programs awarded under the previous presidential administration, saving U.S. taxpayers $1.7 billion.

EPA administrator Lee Zeldin announced the latest cuts on March 10. He is working with the Department of Government Efficiency (DOGE) and Elon Musk on a “line-by-line review of spending,” according to a news release.

While the cuts total $1.7 billion, there is a larger pot the group is seeking to claw back – $20 billion routed through Citibank on for the “Greenhouse Gas Reduction Fund,” according to The Daily Wire.

The fund acted like a piggy bank for favored left-wing groups, with $2 billion going to “Power Forward Communities, a green group linked to Democrat Stacey Abrams,” The Daily Wire reported.

Zeldin has already identified nearly $60 million in ideological grants from the Biden administration for “environmental justice.”

“Additional monies were allocated for DEI training for staff, expanding environmental justice content through the America’s Children and the Environment Program, contractors to advance agency DEI initiatives, and more,” the EPA announced in February. “More savings have been accrued through the agency’s cancellation of outside contractors hired to plan office-wide retreats, and from other contracted work that could be insourced.”

Some of the “environmental justice” grants canceled recently by Zeldin went to well-connected Democrats, according to a Washington Free Beacon report.

For example, LaTricea Adams served on President Joe Biden’s Environmental Justice Advisory Council. At the same time, she applied for a grant on behalf of her nonprofit Young, Gifted & Green – and received $20 million, according to the Washington Free Beacon. The grant is about 10 times the annual revenue of the nonprofit.

The grant would “result in the establishment of the Mid-South Environmental Justice Center with a community advisory board,” according to Democrat Tennessee Congressman Steve Cohen. “It will also help to implement a community engagement plan, coordinated workforce training in green jobs, and hands-on water- and air-quality testing,” a January news release from his office stated.

Democracy Green “is a small mother-daughter operation that has never conducted wetlands restoration or lead pipe removals,” according to the Free Beacon. But the group’s board president, La’Meshia Whittington, served on an EPA advisory committee.

The group pushed back against the accusations, calling the Free Beacon an “obscure publication” that published “outright fabrications.” “Our organization has successfully executed water infrastructure projects in North Carolina, including emergency water support and remediation efforts after natural disasters,” the group wrote to Zeldin. “We own the wetland in question- no funds from the CCG Grant are being used for land acquisition but rather this project will restore an already contaminated creek that runs adjacent to some communities benefiting from the pipe replacement.”

Zeldin’s actions are part of a broader push by President Donald Trump to remove onerous economic regulations pursued in the name of fighting “climate change.”

He has also focused on “unleashing American energy” to bring down the cost of electricity and manufacturing.

“It is thus in the national interest to unleash America’s affordable and reliable energy and natural resources,” he wrote in a day one executive order. “This will restore American prosperity — including for those men and women who have been forgotten by our economy in recent years.  It will also rebuild our Nation’s economic and military security, which will deliver peace through strength.”

To fulfill this promise, Zeldin announced a “deregulatory effort” to “bring down the cost of living,” according to Breitbart.

“We will bring down the cost of living. It’s going to be easier to heat your home, to purchase a vehicle, to operate a business,” Zeldin told the outlet over the weekend.

“I’ve been told that we’re going after the holy grail of the climate change religion, and I would just say this: that we can protect the environment and grow the economy. It’s not a binary choice,” he said. “We don’t have to just choose one. The Trump administration chooses both.”

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Business

A Look at Canada’s Import Tariffs

Published on March 16, 2025

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  By David Clinton

Speaking of foreign tariffs, Canada’s hands are not exactly clean

It’s one thing to oppose the various iterations of recently threatened U.S. tariffs: many of those carry the potential to inflict serious harm on Canada and Canadians and we’re right to be nervous. However, whether or not Canada’s many external-facing policies use the term tariff in their titles, we have more than a few protectionist trade barriers of our own. I thought it would be useful to list some of Canada’s more obvious protectionist policies.

Unfortunately, one thing these examples lack is context. It’s no secret that international trade is complicated. Some of the trade barriers I’m going to describe are policy responses to legitimate safety issues. And, even among those restrictions that were designed to protect local industries, I couldn’t usefully estimate whether there are enough of them to define our total trade ecosystem.Nevertheless, here’s what I did find.The Customs Tariff Act governs Canada’s import tariffs. All goods entering Canada from countries on the Most-Favored-Nation list that aren’t eligible for lower rates through trade agreements are subject to tariff charges as high as 17 percent. Here are some practical cases of imports from the U.S. that aren’t covered by the CUSMA trade agreement:

  • U.S. t-shirts using imported fabric could face an 18 percent tariff, adding $18,000 to a $100,000 shipment.
  • A $30,000 U.S.-assembled car with Asian parts incurs $1,830 in duties.
  • $50,000 of U.S. strawberries could face $4,250 in seasonal duties if applied.
  • $200,000 of steel wire from the U.S. could face $108,000 in extra anti-dumping duties.

Canada’s supply management system for dairy, poultry, and eggs is a notorious example of a policy that looks, walks, and quacks just like a duck an import tariff. Supply management is governed by a combination of federal and provincial laws, including the Export and Import Permits Act and the Farm Products Agencies Act. Regulations can hit over-quota imported cheese with rates as high as 245.5 percent and chicken can be taxed at 238 percent. And that’s assuming you somehow manage to score an import permit from Global Affairs Canada.The Canadian Food Inspection Agency enforces strict sanitary and phytosanitary (SPS) measures that often require layers of inspections or certification requirements that can significantly raise compliance costs. The differences between some of those requirements and an economic tariff are not always obvious.The Canada Border Services Agency collects an excise tax on imported liquor. For example, a U.S. exporter looking to ship 100 litres of 40 percent ABV whiskey to Canada will face a duty of $467.84 (100 × 0.4 × $11.696). That duty must be paid by the importer.In addition, various provincial liquor control boards apply fees and markup costs on imported alcohol, which effectively create price barriers for foreign products (when they’re even allowed on store shelves).Book Importation Regulations limit parallel imports of foreign editions in order to protect Canadian publishers. I assume this is why so many major international publishing companies maintain Canadian offices and, on paper at least (so to speak), publish special Canadian editions.The various Canadian Content (CanCon) rules governing broadcast media will also undermine the principle of free trade, even if those rules won’t necessarily increase import costs.Here are some examples of regulatory compliance rules that aren’t always just about safety:

  • Electrical product safety certification rules sometimes requires foreign electronics manufacturers to repeat testing despite already having UL certification, adding 3-6 months to market entry.
  • US medical device companies can face duplication of regulatory submissions and maintenance of separate quality systems due to Health Canada requirements.
  • Chemical manufacturers must submit detailed testing data specific to Canadian requirements in order to register their products.
  • Small US food producers must implement separate packaging lines for Canadian-bound products to satisfy nutrition labeling requirements.

This isn’t to say there’s necessarily anything morally wrong with any of those rules. And, as I noted, I’m not sure whether Canada’s overall trade profile is more restrictive than our international peers. But, when faced with foreign tariffs, it can’t be said that Canada’s hands are perfectly clean.

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