b'COVER STORYOPENINGTHEFLOODGATESBy Warren HeeleyIn the face of punishing U.S. tariffs, lawmakers are finally taking steps to free up internal trade and labour mobility in CanadaT he recent move by the U.S.Manucha calls Canadas interprovincialThe AIT came into force in 1995 andTrump administration to imposetrade barriers a patchwork of conflictingwas later replaced by the Canadian Free high tariffs on a wide variety oflaws and regulations that impose undueTrade Agreement (CFTA) in 2017. A number imported products has rekindledrestraint on goods, services and labourof other agreements were established to interest in improving interprov- seeking to cross an internal frontier. Thesefurther develop internal free trade, including incial trade within Canada, leading somebarriers harm Canadian growth and pros- trade agreements in the western andprovinces to table their own legislation toperity: by one estimate they add betweenAtlantic provinces. remove internal barriers. These barriers,7.8 and 14.5 per cent to the price of goods they say, have long hampered the freeand services. While it all sounded good on paper, little movement of goods and people, raisingprogress was ultimately made. The situation costs unnecessarily, limiting opportunities,HISTORICAL PROCESS then, however, was very different from what and weakening the economy.Efforts to improve the free movement ofwere facing today, with Donald Trump in For many people, the legislation is longgoods and people in Canada is not new.power in the White House. The challenge overdue. In a recent article from theOttawas first major review of internalwhen these two agreements were adopted was MacDonald-Laurier Institute entitledbarriers to trade in Canada dates all thethat Canada was not facing any economic Unlocking Canadas Economy, Ryanway back to 1994, when an Agreement oncrises similar to the Trump tariffs, says Todd Manucha, an expert on interprovincialInternal Trade (AIT) was signed by theHirsch, an economist and principal at Todd trade, writes, U.S. President Donaldthen prime minister and the provincial/ Hirsch Consulting and keynote speaker at Trumps tariff threats seem to haveterritorial leaders. Its objective was tothe upcoming CERC conference. Unfortu-reminded Canadians that we dont evenfacilitate the free movement of people,nately, with no pressing need to respond to an trade well with each other. We self-sabo- goods, services and investments withineconomic concern, very little has been done tage through domestic trade obstacles thatCanada to establish an open, efficient andtowards [meeting] the objectives of the AIT hinder economic growth and security.stable domestic market.and CFTA. 14PERSPECTIVESSummer 2025'