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Trump ‘tariffs’ threat should hasten trade liberalization among provinces

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4 minute read

From the Fraser Institute

By Jake Fuss and Grady Munro

To much fanfare, President-elect Donald Trump has threatened to impose a 25 per cent tariff on all imported products coming into the United States from Canada. The premiers will meet with Prime Minister Trudeau this week to discuss the situation and possible next steps. While the discussion will no doubt focus on trade with the U.S. and other countries, they should also consider trade reform within our national border.

Indeed, provinces and territories have considerable autonomy to set rules for trade with other Canadian jurisdictions. These rules (or barriers) include different inspection and labelling requirements for agricultural goods, different trucking regulations, different standards and certifications for professionals, provincial monopolies over alcohol distribution, and more.

As with international barriers, trade barriers within Canada inhibit the free flow of goods, services and labour between provinces, which reduces productivity and increases prices. In other words, Canadians pay the price for our interprovincial trade barriers. And the costs are significant. Research suggests that interprovincial trade barriers add between 7.8 per cent and 14.5 per cent to the price of goods and services including groceries and other necessities.

More broadly, according to a 2020 study published by the Fraser Institute, interprovincial trade barriers cost the Canadian economy more than $32 billion per year or approximately 1.4 per cent of GDP. According to a TD report released last month, a 10 per cent across-the-board tariff by the U.S. (and the subsequent retaliation by Canada on U.S. imports) would reduce Canada’s GDP by approximately 2.4 percentage points over two years, compared to current baseline projections. Therefore, if Canadian policymakers removed interprovincial trade barriers they could mitigate much of the economic harm caused by potential new U.S. tariffs.

What would those changes look like?

While the Canadian Free Trade Agreement (CFTA)—a 2017 agreement between the federal government and all provincial and territorial governments—was an important step toward greater trade liberalization in Canada, the Trudeau government should propose a policy of “mutual recognition” so that any item that meets the regulatory requirements of a single province or territory automatically satisfies the requirements of another.

And while the federal government should promote free trade within Canada, provincial and territorial governments should also reduce barriers. In addition to negotiating agreements among themselves (such as the New West Partnership Trade Agreement between British Columbia, Alberta, Saskatchewan and Manitoba) provinces can unilaterally eliminate self-imposed trade barriers (as Alberta did in 2019 with grazing permits for livestock and other reforms).

Trade is fundamental to economic activity, opportunity and prosperity for Canadians from coast to coast. In light of Trump’s aggressive trade posture, now more than ever the federal government and the provinces and territories should work together to remove interprovincial trade barriers to mitigate any economic damage from a hostile trade regime south of the border.

Jake Fuss

Director, Fiscal Studies, Fraser Institute

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2025 Federal Election

As PM Poilievre would cancel summer holidays for MP’s so Ottawa can finally get back to work

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From Conservative Party Communications

In the first 100 days, a new Conservative government will pass 3 laws:

1. Affordability For a Change Act—cutting spending, income tax, sales tax off homes

2. Safety For a Change Act to lock up criminals

3. Bring Home Jobs Act—that repeals C-69, sets up 6 month permit turnarounds for new projects

No summer holiday til they pass!

Conservative Leader Pierre Poilievre announced today that as Prime Minister he will cancel the summer holiday for Ottawa politicians and introduce three pieces of legislation to make life affordable, stop crime, and unleash our economy to bring back powerful paycheques. Because change can’t wait.

A new Conservative government will kickstart the plan to undo the damage of the Lost Liberal Decade and restore the promise of Canada with a comprehensive legislative agenda to reverse the worst Trudeau laws and cut the cost of living, crack down on crime, and unleash the Canadian economy with ‘100 Days of Change.’ Parliament will not rise until all three bills are law and Canadians get the change they voted for.

“After three Liberal terms, Canadians want change now,” said Poilievre. “My plan for ‘100 Days of Change’ will deliver that change. A new Conservative government will immediately get to work, and we will not stop until we have delivered lower costs, safer streets, and bigger paycheques.”

The ’100 Days of Change’ will include three pieces of legislation:

The Affordability–For a Change Act 

Will lower food prices, build more homes, and bring back affordability for Canadians by:

We will also:

  • Identify 15% of federal buildings and lands to sell for housing in Canadian cities.

The Safe Streets–For a Change Act 

Will end the Liberal violent crime wave by:

The Bring Home Jobs–For a Change Act 

This Act will be rocket fuel for our economy. We will unleash Canada’s vast resource wealth, bring back investment, and create powerful paycheques for workers so we can stand on our own feet and stand up to Trump from a position of strength, by:

Poilievre will also:

  • Call President Trump to end the damaging and unjustified tariffs and accelerate negotiations to replace CUSMA with a new deal on trade and security. We need certainty—not chaos, but Conservatives will never compromise on our sovereignty and security. 
  • Get Phase 2 of LNG Canada built to double the project’s natural gas production.
  • Accelerate at least nine other projects currently snarled in Liberal red tape to get workers working and Canada building again.

“After the Lost Liberal Decade of rising costs and crime and a falling economy under America’s thumb, we cannot afford a fourth Liberal term,” said Poilievre. “We need real change, and that is what Conservatives will bring in the first 100 days of a new government. A new Conservative government will get to work on Day 1 and we won’t stop until we have delivered the change we promised, the change Canadians deserve, the change Canadians voted for.”

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Automotive

Canadians’ Interest in Buying an EV Falls for Third Year in a Row

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From Energy Now

Electric vehicle prices fell 7.8 per cent in the last quarter of 2024 year-over-year, according to the AutoTader price index

Fewer Canadians are considering buying an electric vehicle, marking the third year in a row interest has dropped despite lower EV prices, a survey from AutoTrader shows.

Forty-two per cent of survey respondents say they’re considering an EV as their next vehicle, down from 46 per cent last year. In 2022, 68 per cent said they would consider buying an EV.

Meanwhile, 29 per cent of respondents say they would exclusively consider buying an EV — a significant drop from 40 per cent last year.

The report, which surveyed 1,801 people on the AutoTrader website, shows drivers are concerned about reduced government incentives, a lack of infrastructure and long-term costs despite falling prices.

Electric vehicle prices fell 7.8 per cent in the last quarter of 2024 year-over-year, according to the AutoTader price index.

The survey, conducted between Feb. 13 and March 12, shows 68 per cent of non-EV owners say government incentives could influence their decision, while a little over half say incentives increase their confidence in buying an EV.

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