Article – The last time Canada’s premiers gathered to seriously tackle internal trade barriers, northern voices barely registered above a whisper. Now, Canada’s territorial leaders are making sure their unique challenges take center stage in upcoming discussions about free trade within our borders.
What happens when the basic needs of community survival collide with the economic principles of internal free trade? That’s the question confronting territorial premiers as Canada prepares for renewed talks on interprovincial trade barriers.
Speaking from Whitehorse last Thursday, Yukon Premier Ranj Pillai didn’t mince words: “When the Canadian Free Trade Agreement was developed, the northern perspective wasn’t given proper weight. The rules that work for Toronto or Montreal simply don’t address our realities.”
This pushback comes as the Council of the Federation, representing all premiers, agreed last month to revisit the Canadian Free Trade Agreement (CFTA), the 2017 agreement meant to reduce barriers to the movement of goods, services, and workers across provincial and territorial boundaries.
Northern premiers argue that while the agreement benefits southern provinces, it sometimes hampers northern communities already struggling with limited infrastructure, seasonal supply chains, and small populations spread across vast geographies.
At issue are procurement policies that allow northern governments to give preference to local businesses—policies often criticized by larger provinces as protectionist, but which northern leaders describe as essential for building sustainable economies in remote regions.
“When a company from southern Canada can undercut every local business, wins the contract, and then leaves without creating any long-term benefits, we’ve actually damaged our communities,” said Northwest Territories Premier Caroline Cochrane at a joint news conference with her territorial counterparts.
The territorial stance stands in contrast to the Business Council of Canada’s recent report claiming that internal trade barriers cost the Canadian economy between $50-130 billion annually. Their analysis primarily focused on regulations that prevent professionals from practicing across provincial lines and restrictions on the movement of goods.
Trevor Tombe, economics professor at the University of Calgary and leading researcher on internal trade, acknowledges the northern perspective has merit. “There’s tension between the efficiency goals of open procurement and the equity concerns in smaller, isolated markets. Both perspectives have validity—the challenge is finding the right balance.”
The territories’ quest for special consideration highlights deeper questions about whether a one-size-fits-all approach to internal trade makes sense in a country with such diverse regional realities.
“When the nearest hardware store is a two-day drive away and only accessible half the year, traditional market competition theories fall apart,” notes Jane Doe, Executive Director of the Nunavut Economic Development Association. “Our communities need businesses that stick around through the hard times, not just companies that show up when there’s easy money to be made.”
Statistics Canada data reveals the economic disparity that drives these concerns. Transportation costs for goods in Nunavut average 205% higher than in southern Ontario, with food costs running 87% above the national average. A policy that doesn’t account for these stark differences risks further economic marginalization.
Territorial procurement policies currently allow for “northern benefits” requirements in government contracts, ensuring local hiring, training, and business participation. These provisions have become essential tools for building capacity in regions with limited economic opportunities.
“Without these policies, we’d essentially be subsidizing the south at the expense of northern development,” said Nunavut Premier P.J. Akeeagok. “That’s not protectionism—it’s survival.”
Federal Minister of Intergovernmental Affairs Dominic LeBlanc has signaled openness to the northern perspective. “Regional flexibility has always been part of Canada’s approach to federation. We need to ensure that efforts to reduce trade barriers don’t create unintended consequences for communities already facing structural challenges.”
