Tariff threat that Canada can address today

The Globe editorial says internal trade barriers act like a 9% tariff and that removing them could add about $210 billion to Canada’s economy; premiers have so far been reluctant to take the political steps the editorial calls for.

Donald Trump’s trade actions against Canada are described as a significant external threat the federal government cannot fully control. The editorial argues a larger, domestic economic problem is internal trade barriers among provinces and territories. The International Monetary Fund is cited as finding those barriers are equivalent to a 9 per cent tariff and that eliminating them could add roughly $210 billion to the economy over time. The piece notes provincial and territorial premiers have been hesitant to remove the rules and regulations that create those barriers. What the IMF and editorial say: - The IMF estimates internal trade frictions amount to about a 9% tariff on goods and services. - Eliminating those barriers is estimated to add roughly $210 billion to Canada’s economy, or more than $5,000 per person, according to the editorial’s use of IMF figures. - Services are where most costs are concentrated; the editorial cites rules in education and health care that it equates to tariffs exceeding 40%. - The editorial reports federal barriers have been removed, but premiers have not taken the broader steps to dismantle provincial barriers; it also suggests Ottawa could use fiscal incentives to encourage provinces to act. Summary: The IMF-backed analysis and the Globe editorial together present a large potential economic gain if internal trade barriers are removed, with smaller provinces likely to see the largest per-capita benefits. Undetermined at this time.