The report delivers a compelling estimate: “fully eliminating non-geographic internal trade barriers could raise Canada’s real GDP by nearly 7 percent over the long run—roughly C$210 billion in today’s terms.” This gain would stem from more efficient labour and capital allocation, heightened competition, and greater scale for high-productivity firms.
Removing internal trade friction is already a focus for the federal government and other stakeholders, with measures such as Bill C‑5, the Free Trade and Labour Mobility in Canada Act which aims to remove red tape.
According to the IMF, services sectors such as finance, telecommunications, transportation, and professional services account for approximately four-fifths of the potential GDP boost, reflecting both their weight in the economy and their interconnections across other industries.
The uneven nature of internal trade costs means that smaller provinces and northern territories bear disproportionately high barriers, particularly in services like healthcare and education, where some measured frictions exceed the equivalent of a 40% tariff.
Enhanced domestic integration could improve investment climates, sharpen competitive dynamics, and strengthen Canada’s buffer against weaker external demand or global supply shocks.