A Stronger Canadian Economy Is Possible if We Confront Our Provincial Barriers

A Stronger Canadian Economy Is Possible if We Confront Our Provincial Barriers by Maj (ret’d) CORNELIU, CHISU, CD, PMSC FEC, CET, P.Eng. Former Member of Parliament Pickering-Scarborough East Canada’s economic challenge is not a mystery. Productivity has stagnated for over a decade, business investment per worker has fallen to half the U.S. level, and major projects—whether housing developments, transmission lines, or resource corridors—take too long and cost too much. What is less often acknowledged is the structural cause behind many of these problems: a fragmented federation where provincial legislation frequently pulls the national economy in different directions. For decades, Canada has tolerated a patchwork system in which goods legal in one province can be blocked in another, where a nurse or engineer licensed in Alberta cannot easily work in Ontario, and where a manufacturer must redesign packaging simply to sell the same product across provincial borders. Each of these irritants may seem trivial in isolation, but together they represent a profound drag on competitiveness. The Parliamentary Budget Officer estimates the cost of internal trade barriers to be equivalent to a 4% tariff we impose on ourselves—a hidden tax on productivity and prosperity. No other advanced economy erects so many internal walls inside a single country. The irony is that Canadians talk endlessly about trade diversification abroad while ignoring the inefficiencies at home. We spend years negotiating market access with Europe or Asia, yet a company in Manitoba still struggles to sell construction materials freely to Quebec or Nova Scotia. The obstacle is not geography—it is governance. Why has this problem proven so difficult to solve? The answer lies in Canada’s unique constitutional architecture. Provinces guard their jurisdiction fiercely, and for good reasons rooted in history and identity. Health care, education, and natural resources are provincial responsibilities; so too are many forms of licensing and regulation. The federal government cannot simply override provincial rules without igniting constitutional conflict. However, the result is a federation of 13 economic silos, loosely connected by federal transfers and national standards that are often voluntary or weakly enforced. The Canadian Free Trade Agreement (CFTA), meant to replace the 1995 Agreement on Internal Trade, was supposed to create a truly national marketplace. In practice, it has been timid. It relies on consensus, includes too many exemptions, and lacks meaningful penalties for non-compliance. The CFTA’s dispute-settlement process moves at a glacial pace, and its rulings are easily ignored. The outcome is predictably inefficient. Entrepreneurs face redundant approvals, transport companies navigate conflicting weight and safety rules, and engineers or tradespeople are forced to obtain multiple provincial certifications. These frictions add cost, discourage mobility, and undermine the very idea of a single Canadian economy. The solution is not to centralize power in Ottawa but to apply a simple, proven principle: mutual recognition. This model, used effectively in the European Union and Australia, holds that if a product, profession, or process is lawful in one jurisdiction, it is lawful in all—unless a province can demonstrate a compelling public-interest reason to refuse it. Mutual recognition preserves provincial autonomy while creating a seamless market for goods, services, and labour. It eliminates duplication without demanding uniformity. A nurse licensed in Saskatchewan would automatically be eligible to work in Nova Scotia; a builder approved in British Columbia could operate in Ontario under the same standards; a bottle of wine legal for sale in Quebec could be shipped freely to Alberta or Prince Edward Island. For housing and skilled trades, this reform could be transformative. Canada cannot meet its national housing targets if electricians, plumbers, and heavy-equipment operators spend months waiting for their credentials to transfer. A fast-lane system for high-demand professions—engineers, nurses, welders, teachers, truck drivers—would immediately boost labour mobility and help address regional shortages. Provinces would retain oversight of quality and safety but remove needless administrative delay. Large-scale projects face a similar maze of overlapping federal and provincial rules. A mine, pipeline, or power line might undergo two or three separate environmental reviews, each with different timelines, consultation processes, and documentation. This redundancy serves no one: not investors, not Indigenous communities, and not the environment. A single “one-project, one-assessment” model—jointly administered by the most competent jurisdiction—would shorten approval times without lowering standards. Early, continuous Indigenous engagement and revenue-sharing agreements would ensure both legitimacy and local benefit. The objective is not to weaken environmental protection but to make it predictable, transparent, and fast. Certainty, not deregulation, is what unlocks investment. Federalism is a partnership, not a hierarchy. Yet Ottawa has tools it rarely uses effectively—especially the spending power. The federal government transfers tens of billions annually to provinces for infrastructure, housing, and skills training. Those dollars should come with performance conditions tied to efficiency: streamlined permitting, faster credential recognition, or adoption of national data standards. Such conditional partnerships would respect provincial choice—provinces could opt out—but the public would see clearly who is supporting national growth and who is standing in the way. Taxpayers have a right to expect that federal funds produce national, not merely local, benefits. A First Ministers’ Scorecard, published quarterly, could track measurable indicators: project-approval timelines, housing completions, interprovincial freight delays, and credential-transfer times. Transparency is a powerful motivator; what gets measured gets fixed. Modern economic policy must also integrate Indigenous participation as a structural component not as an afterthought. Indigenous communities are often central to resource and infrastructure corridors, yet they face complex regulatory hurdles and limited access to capital. Federal and provincial governments should support Indigenous Project Offices that provide technical assistance, equity partnerships, and standardized benefit-agreement templates. Empowerment—through ownership and consent—creates predictability for all parties. While federal incentives can help, true progress depends on provincial initiative. Each legislature should adopt its own Mutual Recognition Act, stating that goods and credentials valid elsewhere in Canada are presumed valid locally. Provinces could harmonize building and electrical codes, publish red-tape reduction targets, and commit to public “no net new regulation” rules. Interprovincial compacts—formal agreements between two or more provinces—could advance shared priorities like energy corridors, labour mobility, or procurement standards. The Western Premiers’ Agreement and the New West Partnership once showed promise; similar regional blocs could revive the spirit of cooperation. In conclusion, these goals are ambitious but fully attainable if governments align around a single vision: one country, one economy, many governments. Canada’s productivity problem will not be solved by more subsidies or slogans. It requires political courage—the willingness of premiers and ministers to trade a measure of control for collective prosperity. The prize is immense: higher living standards, faster growth, and a stronger federation that competes globally rather than bickers internally. If Canada was able to build a transcontinental railway in the 19th century and a universal health system in the 20th, surely it can build a truly unified economy in the 21st. The obstacles are not technical but political—and they are entirely within our power to remove. A stronger Canadian economy is within reach. But it will remain out of grasp until we confront the provincial barriers that quietly hold us back. The time to act is now. The time for national coherence has arrived.