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Economic Viewpoint

The many barriers to interprovincial trade could lessen with the new Canadian Free Trade Agreement

August 23, 2016
François Dupuis, Vice-President and Chief Economist • Benoit P. Durocher, Senior Economist

Despite the Agreement on Internal Trade (AIT) that went into effect in all provinces and territories in 1995, numerous non-tariff barriers continue to hamper the interprovincial trade in goods and services. Meanwhile, Canada’s international trade agreements have proliferated in recent years, going a long way to foster exports outside the country. Many businesses say it may now be easier to sell their products and services abroad than in another province. As a result, Canada’s interprovincial trade has lost ground to international trade. Clearly, there is a need for greater harmonization of regulations and freer trade between the provinces. In July, the provinces and territories reached an agreement in principle on a new Canadian Free Trade Agreement (CFTA), offering strong hope in that area.