Canada Targets Internal Trade Reform to Offset U.S. Tariffs, Boost Economy

Prime Minister Mark Carney announced plans to eliminate internal trade barriers in Canada by July 1, aiming to counter the economic impact of U.S. tariffs. Speaking after a meeting with provincial and territorial leaders, Carney pledged to introduce legislation enabling goods to move freely across provinces without federal restrictions.

According to research cited by Carney, removing internal trade barriers could cut trade costs by up to 15% and expand the Canadian economy by 4% to 8%. The strategy includes harmonizing provincial regulations, mutual recognition of rules, and establishing national standards. Carney emphasized that such reforms could more than offset the effects of U.S. tariffs.

Business groups have long criticized the fragmented regulatory system across Canada’s 10 provinces and three territories, which delays key projects like mines and pipelines. The new approach also promises to accelerate approvals for major infrastructure by creating a single-window review process that integrates federal and provincial environmental assessments.

In March, U.S. President Donald Trump imposed a 25% tariff on Canadian steel and aluminum, with more expected. As Canada sends 75% of its exports to the U.S., the country remains vulnerable to trade tensions.

Carney, recently appointed prime minister, is expected to call an April election soon. He has not yet outlined his strategy for dealing with President Trump but stressed the need to strengthen Canada's internal market.

The government also plans to remove labor mobility restrictions and invest in a national trade and energy corridor. To support those impacted by tariffs, Carney proposed easing access to employment insurance and allowing businesses to defer tax payments.

These reforms signal a push toward economic resilience through internal trade liberalization and streamlined infrastructure development.