On June 30th, 2025, the federal government announced the elimination of all 53 federal exemptions under the Canadian free trade agreement (CFTA). This was a move of a broader effort to improve internal trade across Canada, in hopes to create a more integrated national economy. The changes that were formalized through the One Canadian Economy Act, which all received Royal Assent on June 26, remove federal restrictions that previously limited competition in sectors like procurement, transportation, land development, and space contracts. This also eliminates carve outs for entities such as the Bank of Canada and the Canada Pension Plan investment board.
Deputy Prime Minister Chrystia Freeland announced that this action will help reduce the red tape and level the playing field for businesses operating in different provinces and territories. Meaning that companies from across Canada will now have equal access to bid on federal contracts, something that had previously been restricted in specific sectors. This federal move comes amid growing concern about economic pressures from outside Canada, those including renewed U.S. trade tensions. Prime Minister Carney has stated that strengthening internal trade is a key part of improving Canada’s economic resilience and productivity. Though, this is a significant federal step, provincial and territorial trade barriers still remain. Differences in licensing rules, regulatory standards and supply management systems continue to pose challenges for internal market integration. However, some provinces, such as Ontario and Nova Scotia, are reportedly reviewing their own exceptions under the CFTA. On the other hand, others including Quebec and Alberta have yet to make clear commitments or plans.
The removal of these federal internal trade barriers could potentially improve Canadians day-to-day lives through increasing competition, lowering prices and expanding job opportunities throughout the country. It may allow businesses to bid more freely on federal contracts which can lead to better value for taxpayers and more efficient public services. Overtime this could also support faster infrastructure development and create a more flexible mobile workforce across Canada.
In turn, the federal governments removal of these internal trade barriers is a huge step forward to a more open and efficient Canadian economy. While this is impactful, it ultimately depends on provincial actions, since they lay the groundwork for lower costs, more economic opportunities and better services for Canadians. Overall, with these benefits, continued collaboration across all levels of government is key to ensuring they’re fully integrated.