More progress has been made on removing trade barriers within Canada in the past six months than in eight years since the Canadian Free Trade Agreement (CFTA) was signed, finds the Canadian Federation of Independent Business (CFIB)’s latest State of Internal Trade report: Interprovincial Cooperation Report Card.
“While progress to date has been encouraging, we also have seven different jurisdictions taking seven different approaches to mutual recognition. That kind of patchwork can wind up recreating the barriers it was meant to knock down,” said Ryan Mallough, CFIB’s vice-president of legislative affairs.
“We’re marching the ball down field, but we haven’t reached the end zone just yet. The premiers and the prime minister have instructed the Committee on Internal Trade to reach a pan-Canadian mutual recognition agreement for December. We’ll be watching those conversations closely to ensure we cross the goal line and finally eliminate Canada’s internal trade barriers once and for all.”
Nova Scotia, the first province to introduce and implement mutual recognition legislation, achieved the highest grade in CFIB’s 2025 Internal trade report card with a score of 9.4 (A grade). Ontario is a close second after eliminating all of its CFTA exemptions, scoring a 9.2 (A grade), said the CFIB.
The 2025 report card grades are:
| Jurisdiction | Canadian Free Trade Agreement Exceptions(40%) | Select Barriers to Internal Trade (20%) | Status of Items from Reconciliation Agreements (40%) | Bonus Indicator: Mutual Recognition (Multiplier) | Overall Score and Grade | ||||
| NS | 2.3 | F | 5.9 | D | 8.9 | A- | 8.5 | 9.4 | A |
| ON | 10 | A+ | 6.0 | D | 8.2 | B | 5 | 9.2 | A |
| MB | 7.3 | C+ | 5.4 | D | 9.6 | A | 5 | 8.9 | A- |
| BC | 6.3 | C- | 4.1 | D | 9.2 | A | 5 | 8.5 | B+ |
| FED* | 6.8 | C | 9.7 | A | 0 | 8.2 | B | ||
| AB | 7.9 | B | 4.1 | D | 9.5 | A | 1 | 8.0 | B |
| PEI | 3.1 | F | 4.7 | D | 8.8 | A- | 5 | 7.8 | B |
| SK | 6.8 | C | 5.3 | D | 9.2 | A | 1 | 7.7 | B- |
| NB | 4.8 | D | 4.7 | D | 8.5 | B+ | 1 | 6.6 | C |
| QC | 0.0 | F | 3.6 | F | 8.9 | A- | 3 | 6.0 | C- |
| NL | 4.1 | D | 2.6 | F | 8.5 | B+ | 1 | 6.0 | C- |
| NT | 4.8 | D | 2.0 | F | 8.8 | A- | 0 | 5.8 | D |
| NU | 4.5 | D | 2.0 | F | 8.6 | B+ | 0 | 5.6 | D |
| YT | 1.3 | F | 3.0 | F | 8.8 | A- | 0 | 4.6 | D |
| The federal government is scored on two areas: the economic impact score based on the procurement exceptions they maintain from the CFTA in 2025, and the implementation status of reconciliation agreements. Both areas are weighted equally (50% each) as the select barriers area was not available for this analysis. |
The report grades three major areas of interprovincial/territorial cooperation: CFTA exceptions, select barriers to trade, and the status of items from reconciliation agreements. There’s an updated bonus indicator that rewards jurisdictions that accept other regions’ regulations and standards as sufficient within their own jurisdiction, said the CFIB.
“Three years ago, we challenged governments to blow a hole through Canada’s internal trade barriers by adopting mutual recognition policies to get the flow of goods, services and people moving across the country. At the time, we heard all the reasons why it couldn’t be done. But just in the past six months we’ve seen seven jurisdictions with mutual recognition legislation on the books,” said SeoRhin Yoo, CFIB’s senior policy analyst for interprovincial affairs.
“The internal trade file is finally getting the attention it has desperately needed since the CFTA was signed in 2017. While there’s lots of reason for optimism, we’ll be closely watching governments’ next steps, including the crucial regulations that will follow legislation, to ensure the rules match the rhetoric and small businesses feel actual progress on the ground.”
The CFIB is Canada’s largest association of small and medium-sized businesses with 100,000 members across every industry and region.
Related Retail Insider stories:
