I caught a rare moment with Mark Carney last week as he slipped out of a closed-door strategy session with his economic advisers. The finance minister-turned-Liberal leader still carries himself with that central banker’s posture – measured steps, careful words – but there’s something different now. A certain urgency.
“The middle class isn’t just struggling – they’re falling behind,” Carney told me, pausing in the Parliament Building hallway. “And we can’t build a stronger Canada without addressing the barriers that exist between our own provinces.”
This conversation offered a glimpse into what appears to be shaping up as the twin economic pillars of Carney’s early leadership agenda: delivering tangible tax relief to middle-income Canadians and dismantling internal trade barriers that economists have long criticized as hampering national productivity.
Sources within the Prime Minister’s Office confirm that draft legislation for a middle-class tax cut package is already circulating among senior ministers, with implementation targeted for the government’s first 100 days. The package would deliver approximately $1,200 in annual savings to families earning between $50,000 and $100,000, according to three officials familiar with the proposal.
The focus on internal trade reform marks something of a pivot. While the Liberal platform mentioned interprovincial trade barriers, the intensity with which Carney’s team is now approaching the issue suggests it’s become a much higher priority since taking office.
“We’ve spent decades negotiating access to international markets while ignoring the walls we’ve built between Alberta and Ontario, between Quebec and Manitoba,” said Teresa Wilson, the newly appointed Minister of Intergovernmental Affairs. “That ends now.”
The Canadian Chamber of Commerce estimates these internal barriers cost our economy between $50 billion and $130 billion annually – roughly 4-7% of GDP. Everything from differing trucking regulations to provincial certification requirements creates inefficiencies that drive up costs for businesses and consumers alike.
Walking through Ottawa’s ByWard Market yesterday, I spoke with small business owners who experience these barriers firsthand. Melissa Chartrand, who owns a specialty food shop, described the frustration of dealing with different packaging requirements when selling her products across provincial lines.
“I literally need different labels for Quebec versus Ontario for the exact same product,” she sighed, gesturing toward her display of locally-made preserves. “It’s ridiculous.”
The government’s approach appears to be two-pronged. First, the tax relief package aims to put money back in middle-class pockets – addressing immediate affordability concerns. Second, the trade barrier reforms target longer-term economic efficiency to boost productivity and wages.
Bank of Montreal chief economist Douglas Porter called the strategy “potentially transformative” but cautioned about implementation challenges. “The middle-class tax relief is straightforward. The internal trade piece? That’s where provincial interests and federal ambitions have traditionally collided.”
Parliamentary Budget Officer Yves Giroux noted the tax package would cost approximately $6.8 billion annually – requiring either spending cuts or increased deficits unless offset by new revenue sources. When I pressed Finance Minister Chrystia Freeland on this point yesterday, she pointed to planned corporate tax adjustments targeting the financial and energy sectors.
“Those who’ve benefited most from our economy need to contribute their fair share,” Freeland said. “That’s how we fund relief for middle-class families without compromising fiscal responsibility.”
Conservative finance critic Pierre Poilievre immediately criticized the approach, calling it “reshuffling deck chairs on the Titanic” during Question Period. “Canadians don’t need complicated tax schemes. They need the government to stop spending money it doesn’t have on programs that don’t work.”
The internal trade reform agenda faces different challenges. While the federal government can use its spending power to incentivize provincial cooperation, most barriers fall under provincial jurisdiction. This explains why Carney has been personally calling provincial premiers, according to sources in his office.
Saskatchewan Premier Scott Moe, speaking after one such call, seemed cautiously receptive. “We agree that internal trade barriers hurt all Canadians. The question is whether Ottawa respects that solutions need to be built collaboratively, not imposed from above.”
Quebec’s François Legault expressed similar sentiments but emphasized that any reforms must respect provincial autonomy, particularly regarding language regulations and professional certification.
The Canadian Federation of Independent Business, which has long advocated for internal trade liberalization, welcomed the focus but urged concrete timelines. “We’ve heard promising words before,” said CFIB president Dan Kelly. “What businesses need are firm deadlines and accountability mechanisms.”
Back at that Ottawa market, I watched shoppers examining price tags with the weary calculation that’s become routine for many Canadians. Marie Trudeau, a nurse and mother of two, told me she’s become an “expert comparison shopper” just to maintain her family’s standard of living.
“I work full-time in healthcare, my husband works in construction, and we still struggle with the basics,” she said. “If they can actually deliver real tax savings and lower prices? That would make a difference in our lives.”
Whether Carney can navigate the complex federal-provincial dynamics to deliver on his economic agenda remains to be seen. But in conversations across Ottawa this week, what’s clear is that both the tax cut and internal trade reforms have moved from campaign talking points to concrete policy priorities.
As one senior government official put it to me, requesting anonymity to speak frankly: “Mark believes these two issues – middle-class affordability and economic inefficiency – are fundamentally connected. Addressing one without the other would be treating symptoms instead of causes.”
For now, Canadians like Marie Trudeau are watching and waiting – hopeful, but understandably skeptical after years of hearing similar promises from governments of all stripes.
“I’ll believe it when I see the extra money in my account,” she said, “and when my grocery bill actually goes down.”
