President Donald Trump’s provocative suggestion that Canada might as well be America’s 51st state is absurd, as Canadians know. But it is precisely this absurdity that garners attention—something Mr. Trump understands all too well. To Canadians, such comments are exasperating, but they also highlight a deeper issue: the dysfunction within Canada’s own economic framework, particularly when it comes to interprovincial trade.
Easier to Trade with the U.S. than Other Provinces
Most Canadians understand this will never happen. However, Mr. Trump’s comments strike a nerve because they expose an inconvenient truth: Canada’s fragmented trade policies often make it easier to do business with the United States than with other provinces. Interprovincial trade barriers have been a longstanding issue, and provinces frequently prioritize the U.S. market, drawn by its ease of access and substantial economic returns.
Danielle Smith, Alberta’s Premier, has repeatedly voiced frustrations with Canada’s disjointed energy policies. Eastern Canada’s lack of willingness to discuss cross-country pipelines has left Alberta relying heavily on exports to the U.S. for its energy resources. The agri-food sector faces similar challenges. Provinces like Ontario and Quebec, for example, often prefer to maintain tight controls rather than foster seamless trade relationships with the rest of Canada. When trade disputes arise with the U.S., these provinces have historically been quick to sacrifice others—most notably Alberta—even though Alberta’s equalization payments financially support many of the social programs delivered in Eastern Canada.
Alcohol and Supply Management Complications
This hypocrisy extends beyond energy and into food systems. While Alberta and British Columbia recently reached an agreement to ease interprovincial wine trade, Ontario and Quebec continue to resist efforts to smooth alcohol trade. This resistance mirrors the broader challenges of supply management, which governs the production and pricing of dairy, poultry, and eggs. Each province operates under its own quotas, making the movement of these goods across provincial borders unnecessarily complex. For instance, a dairy farmer in Quebec faces significant regulatory hurdles if they want to sell milk to processors in Ontario.
These inefficiencies directly impact Canadians. Chicken in British Columbia, for example, costs 25–30% more than in other parts of the country, despite supply management’s supposed mandate to provide safe and affordable food to all Canadians. The situation is even worse in Northern communities, where the cost of food skyrockets due to logistical barriers.
Moreover, inconsistent provincial regulations on food labeling, packaging, and grading further complicate interprovincial trade. A fruit producer in British Columbia, for instance, may need to adjust packaging to meet Ontario’s specific requirements, driving up costs and reducing competitiveness. Similarly, differing rules around transportation create roadblocks for perishable goods. Manitoba beef producers looking to sell in Quebec face delays from varying inspection protocols or transportation permits.
Small Businesses Struggle with Trade Restrictions
Small businesses and farmers also bear the brunt of these barriers. A butcher in Alberta, for example, operating in a provincially inspected facility, cannot sell beef to retailers or restaurants in neighboring Saskatchewan, even if demand exists. Likewise, variations in pesticide, fertilizer, or farm equipment regulations across provinces create logistical headaches for farmers, particularly those near provincial borders.
Even local food initiatives, designed to support regional producers, inadvertently hurt interprovincial trade. Schools in Ontario and Quebec that prioritize purchasing locally grown apples make it harder for British Columbia growers to compete.
Fragmented Trade Policies Hurt Canada’s Competitiveness
The examples are endless, and the consequences are clear. Canada’s fragmented trade policies undermine its competitiveness, leaving provinces overly reliant on the United States for economic growth. Addressing these barriers is not only essential for fostering a stronger national economy but also for reducing vulnerabilities in times of geopolitical uncertainty.
President Trump may be wrong most of the time, but his comments sting because they point to Canada’s potential to do better. If Canada wants to become a more competitive marketplace and lessen its reliance on the U.S., it’s time for provinces to cooperate and tear down the walls that divide us.
Eggs do not have an interprovincial supply problem as eggs are moved around the country to ensure that all Canadians have access to a staple food product. Some jurisdictions are more costly than others to produce, but egg partners work together to ensure that those cost differences are minimized and retail is a greater factor in setting a final price to consumers. Supply managed products ensure that no area of the country goes without, and that all Canadians are included in the production and consumption of Canadian raised agricultural goods at world class standards.
I’m a strong supporter of supply management because it means our farmers make a decent living and ensures Canadians are getting high quality products. But most of all, I support it because we should all be supporting our local communities by buying from nearby farms. I remember eating breakfast after returning home after a few months in the U.S. and being amazed at how good the eggs tasted. We’ve still got a ways to go to match the quality and safety of food products in Europe. Allowing more food products in from the U.S. would be a mistake.
And enough of the false claims about equalisation payments. I’ve lived in four provinces and paid taxes for years in a province I no longer live in and deserve the same levels of service regardless of where in Canada I live.