The mounting costs of Quebec’s trade barriers have become increasingly difficult to ignore. A new report from the Canada West Foundation suggests that removing these interprovincial obstacles could boost Canada’s GDP by a staggering $70 billion. As someone who’s covered economic policy for years, I’ve watched this issue simmer beneath the surface of our national economic conversation – always present, rarely addressed.
Quebec’s approach to internal trade has long been shaped by its unique cultural and political position within Canada. The province maintains various regulatory differences, licensing requirements, and procurement preferences that effectively function as trade barriers. While defenders point to cultural preservation and local economic protection, critics – now armed with this report – emphasize the steep national price tag.
“We’re essentially operating as ten different economies instead of leveraging our collective strength,” explains Dylan Jones, the foundation’s president and CEO. “When Quebec restricts the movement of goods, services, and labor from other provinces, we’re artificially constraining economic growth across the entire country.”
The report arrives at its $70 billion figure by examining how trade flows would likely increase without these provincial barriers. For context, that amount represents roughly 3% of Canada’s entire GDP – equivalent to the economic output of Manitoba and Saskatchewan combined.
Beyond the headline number, the analysis reveals particular sectors bearing the heaviest costs. Construction, professional services, and manufacturing face the most significant constraints. When Quebec-based companies can’t easily access talent, components, or services from other provinces, their productivity suffers, and consumers ultimately pay higher prices.
Take the construction industry, where different building code interpretations and contractor certification requirements create substantial compliance costs. A contractor from Ontario faces regulatory hurdles before being able to bid on Quebec projects, effectively reducing competition and driving up prices for everything from residential housing to infrastructure projects.
“The challenge isn’t just the visible barriers,” notes Jock Finlayson, senior policy advisor at the Business Council of British Columbia. “It’s the thousands of small regulatory differences that add friction to what should be seamless commerce between provinces.”
Quebec’s provincial government has traditionally defended its approach by emphasizing its distinct social model and the importance of protecting French language rights in business environments. Premier François Legault’s administration has shown little appetite for dismantling trade barriers, framing them instead as necessary protections for Quebec’s economic autonomy.
The resistance persists despite evidence that trade liberalization would benefit Quebec itself. The report suggests the province’s GDP could expand by approximately $15 billion if barriers were removed – growth that would generate additional tax revenue and create new jobs across multiple sectors.
Internal trade barriers aren’t unique to Quebec, but the province maintains some of the most extensive restrictions. The Agreement on Internal Trade (AIT) and its successor, the Canadian Free Trade Agreement (CFTA), were supposed to reduce these barriers, but progress has been painfully slow. Most provinces continue to protect certain industries and maintain regulatory regimes that impede the free movement of goods and services.
Small and medium-sized businesses feel the impact most acutely. Unlike larger corporations that can establish separate operations in different provinces, smaller enterprises often lack the resources to navigate complex regulatory differences.
“We essentially gave up on Quebec expansion,” admits Sarah Chen, founder of a Toronto-based construction technology firm. “The certification requirements and French language documentation needs created costs that made entering the market prohibitively expensive for a company our size.”
The human costs extend beyond business owners. Workers face barriers to mobility when their professional credentials aren’t recognized across provincial lines. A nurse, engineer, or electrician with years of experience in British Columbia might need significant retraining or recertification before practicing in Quebec, creating artificial labor shortages in regions that desperately need skilled workers.
The irony of Canada’s situation isn’t lost on international trade experts. While the country actively pursues free trade agreements with partners around the world – from the USMCA to CETA with Europe – internal trade remains fragmented by provincial barriers.
“It’s perplexing to international observers,” explains Martha Hall Findlay, president of the Canada West Foundation. “We work hard to secure market access abroad while maintaining barriers within our own borders.”
The political challenge of addressing these barriers remains significant. Provincial governments are naturally protective of their regulatory authority, and the constitutional division of powers gives them substantial control over many aspects of economic activity. Without federal leadership and provincial cooperation, meaningful reform seems unlikely.
What would progress look like? The report outlines several possible approaches, from mutual recognition of standards to regulatory harmonization. Under mutual recognition, a product or service compliant in one province would automatically be accepted in others. Harmonization would take things further by developing consistent standards across all provinces.
For consumers, the benefits would be immediate and tangible. A more competitive market would drive down prices for goods and services, from food products to professional services. The Conference Board of Canada has previously estimated that internal trade barriers cost the average Canadian household over $1,500 annually.
As Canada navigates post-pandemic economic recovery and faces growing global competition, the luxury of maintaining internal trade barriers seems increasingly difficult to justify. The $70 billion in potential economic growth identified in the report represents jobs not created, investments not made, and opportunities missed.
Whether this latest research will break through the political inertia remains to be seen. What’s clear is that the economic cost of maintaining the status quo continues to compound, year after year, across kitchen tables and balance sheets throughout the country.
