According to the Bank of Canada, the removal of interprovincial trade barriers could affect Canada`s production potential by up to two-tenths of a percentage point each year. Promoting Stronger Internal Trade in the Future The CFTA is creating several forward-looking processes and working groups to strengthen Canada`s Economic Union in the future. For example: removing regulatory barriers Governments have agreed to put in place a regulatory coordination process to address regulatory differences between legal systems that act as a barrier to trade. The CFTA is also establishing a mechanism to promote regulatory cooperation that will enable governments to develop common regulatory approaches for emerging sectors. In December 2014, the federal, provincial and territorial governments began negotiations to strengthen and modernize the Free Trade Agreement (TIA). They were guided by First Ministers and the federal government to reach an ambitious, balanced and fair agreement that would create a level playing field for trade and investment in Canada. Economic Impact The CFTA strives to promote internal trade, an important driver of economic growth. Internal trade accounts for about one-fifth of Canada`s annual GDP, equivalent to about $385 billion annually. By reducing trade barriers, the CFTA also promotes productivity and investment in Canadian communities. The Organisation for Economic Co-operation and Development has indicated that Canada could increase its productivity by reducing non-tariff barriers by expanding TIA coverage and offsetting regulatory barriers.
In addition, the International Monetary Fund has indicated that reducing Canada`s interprovincial trade barriers will help create the right conditions to increase domestic business investment and attract foreign direct investment. Are you buying Canadian ingredients or materials to use in your products or services? Be prepared for other options. Canadian companies are already trading with each other and trade between provinces and territories is worth at least $US 385 billion a year. The CFTA will benefit businesses across the Canadian economy, expand choice and help drive growth.Back to Blog