A new Toronto Regional Board of Trade report calls for a binding single Canadian market across six priority sectors amid renewed US tariff threats
Canada's self-imposed internal trade barriers carry a heavier economic cost than anything Washington has levied against the country and a new report released this week is demanding Ottawa and the provinces stop waiting and act.
The Patchwork to Prosperity report, published by the Toronto Region Board of Trade, draws on International Monetary Fund analysis estimating that interprovincial trade barriers across more than 230 sectors impose costs equivalent to a 9.5 per cent tariff on the Canadian economy.
That figure dwarfs the Bank of Canada's January 2026 assumption of an average US tariff rate of 5.8 per cent on Canadian goods. Eliminating those domestic barriers, the IMF has calculated, could expand Canada's GDP by roughly seven per cent over the long term, equivalent to approximately $210 billion in additional economic output.
"Canada cannot control U.S. trade policy. But it can control the barriers that hold its own economy back," said Giles Gherson, president and CEO of the Toronto Region Board of Trade. "At a time of growing global uncertainty, businesses don't need another round of announcements. They need governments to deliver one Canadian market."
The double bind of external and domestic friction
The report comes as US President Donald Trump reaffirmed that he has little interest in updating the Canada-US-Mexico Agreement, known as CUSMA, after the US declined to renew it.
CUSMA is now subject to annual reviews and renegotiations. "I'd rather be independent," Trump told Fox News during a live interview Tuesday morning. New tariffs including a 50 per cent levy on Canadian goods such as wine, hockey sticks, and cement are set to take effect next month.
Canada's trade minister, Dominic LeBlanc, arrived in Washington on July 28 alongside the country's chief trade negotiator, Janice Charette, to meet with American officials. The trip produced no announced outcome. Canada-US relations expert Scotty Greenwood, founder of Ottawa Street Strategy, told CTV News that Canada needs to convince the US it is willing to act decisively.
According to an Angus Reid Institute survey, 62 per cent of Canadians now favour counter-tariffs against the United States, with only seven per cent supporting capitulation to American demands. Meanwhile, a report from the Canadian Chamber of Commerce's Business Data Lab found that renewed tariff threats are suppressing Canadian business investment and that the long-term productivity and wage damage from that investment freeze may ultimately exceed the direct cost of the tariffs themselves.
What the single market proposal would mean
The Toronto Region Board of Trade's report argues that the federal government should be authorised by provinces to act as guarantor of a binding single market, convening negotiations, setting deadlines, publishing progress, and intervening if the process stalls. Provinces would take the lead, but Ottawa would hold a backstop authority grounded in its constitutional trade and commerce powers.
The report sets out a time-bound intergovernmental process focused on six priority sectors where fragmentation causes the most economic damage: housing and building codes, alcohol, food, labour mobility, manufacturing, and transportation. For straightforward reforms, the report recommends a five-year implementation deadline; for areas requiring legislative and regulatory coordination across multiple jurisdictions, up to ten years.
Internal trade flows account for nearly one-fifth of Canada's GDP, according to the Canadian Free Trade Agreement secretariat. The report notes that the Canada Mortgage and Housing Corporation has estimated that removing interprovincial barriers could prompt more than 30,000 additional housing starts annually — a figure that matters directly to advisors and planners working with clients who hold real estate in their portfolios.
Progress on some fronts is already underway. Nine provinces signed an operating agreement on direct-to-consumer alcohol sales on July 21, 2026. The Canadian Mutual Recognition Agreement on the Sale of Goods has created pathways for products approved in one province to be sold in others without duplicate certification.
Ontario's Protect Ontario Through Free Trade Within Canada Act has extended "as of right" provisional licensing to more than 300 regulated professions, effective January 1, 2026. The June 2026 federal-provincial-territorial memorandum of understanding on interprovincial trucking commits governments to harmonise permitting and weight requirements.
But the report warns that piecemeal progress is not the same as a single market. Mutual recognition agreements carry exceptions, non-binding status, and withdrawal clauses. A business operating nationally can still face 13 separate regulatory systems. As the report puts it, even where individual reforms succeed, firms are left navigating "a patchwork of agreements rather than one single Canadian economy."
