Here are the interprovincial trade barriers that are costing Canadian consumers more money

The Front Bench panel talks about the trade barriers Canada must overcome to develop its internal economy and find new markets internationally.

Buying that special cheese or case of beer from another province isn’t necessarily as simple as it sounds.

Depending on where you live in Canada, rules, standards or regulations may exist that mean the product could cost you more money or be subject to certain limits.

As Canada braces for the fallout from potential U.S. tariffs, Canadian federal, territorial and provincial officials are looking to reduce trade barriers.

While tariff worries have been top of mind for many, a patchwork of rules across provinces and territories is already affecting everyday Canadians.

Experts say the trade barriers between provinces and territories may not only be harming businesses, they also may be hurting consumers who have fewer choices and face higher prices.

“Forget about American competition,” Moshe Lander, senior lecturer in economics at Concordia University in Montreal, said in a video interview with CTVNews.ca on Monday.

“Any time that there’s an interprovincial barrier, whatever product is being barriered, you’re paying more for it. The stronger that barrier is, the more of those barriers that exist, the more you’re paying because each one of those barriers comes with a cost, financial or otherwise.”

Here are some ways interprovincial trade barriers are affecting everyday Canadians.

Car seats

Because regulations and rules vary by jurisdiction, products such as car seats must meet the safety standards of the province or territory they are sold in, Lander said.

To illustrate how trade barriers can be unnecessary, economist Jean Philippe Fournier noted an example with car seats in a social media post on X on Feb. 2.

Fournier had worked as a policy adviser in Quebec’s ministry of finance. He said the rules for stuffing in car seats were once different in Quebec and Ontario so consumers in the French-speaking province couldn’t use the car seats made or used in the other province. In the end, Quebec realized the stricter regulation didn’t matter and removed it, Fournier said.

Dairy and meat

Interprovincial trade barriers are making life more expensive for consumers, inflating grocery bills for instance, according to Lander.

Lander gives the example of supply management. The system allows farmers to control the supply and quantity of products. Under supply management, producers need a permit to sell their products to a processing plant.

“Supply management, when it comes to dairy, increases the cost of milk, cheese, eggs, meat,” Lander said. “It’s effectively because the various supply management groups are grouping together almost like a monopoly. And so if you imagine a monopoly in any other market is going to charge a higher price than would exist in a competitive market.”

Transporting food

Food transported from one jurisdiction to another must be both inspected by the federal government and the province or territory where the food business is based, says SeoRhin Yoo, a senior policy analyst for interprovincial affairs at the Canadian Federation of Independent Business. Federal inspections are not required if a product remains within its jurisdiction, she said.

“So a lot of the times this means extra costs put on the businesses, and so then extra costs put on consumers as well,” Yoo said in a video interview with CTVNews.ca on Monday.

Health and safety rules

Connected to the groceries we end up buying, health and safety regulations for agriculture and livestock differ among provinces.

“Farm products are going to have to submit to all kinds of health and safety regulations,” Lander said. “Where exactly are the chickens on the farm and how much space do they have between other chickens? And if you’re going to put a label on it, the labelling could be different, not just linguistically, but what is deemed to be free range could differ from province to province.”

As well, health and safety regulations and standards may serve to keep out the competition, Lander added.

“When you keep out that competition and drive the price higher, that’s what allows the firms to make bigger profits than they otherwise would and the consumer (is) forced to pay more than they otherwise would,” he said.

Alcohol

Many alcohol producers and wineries require new approvals and licensing to operate in various jurisdictions.

Most provinces have rules preventing non-local wine from being shipped directly to consumers. For example, Ontarians looking to bring in B.C. wine have to order it through Ontario’s liquor board, which increases the price by 72 per cent, according to Lorin Inglis, general manager of Enrico Winery on Vancouver Island.

It’s a different situation in Manitoba, where you can get Canadian wine, craft beer and spirits from any province shipped directly to you, according to Yoo.

“Even if we were to allow it in, each province would say, ‘hey, you’re welcome into this province, no different than anybody else, but you have to operate within the barriers that we’ve created to protect our own,’” Lander said.

While some provinces allow you to travel with liquor bought from another jurisdiction, New Brunswick prohibits residents from bringing a large amount of non-local alcohol into the province.

In a 2020 Fraser Institute report, University of Calgary economics professor Trevor Tombe says provincial monopolies over the wholesale distribution of beer and wine means “biased procurement, pricing, and marketing decisions by these agencies often favour local breweries and wineries.”

Regulations that categorize products for tax purposes, such as required ingredients for vodka, make it challenging to sell products across various provinces and territories.

“We have different taxation systems, different markup systems, we have different rules around storing alcohol, importing alcohol,” Jeff Guignard, executive director of the Alliance of Beverage Licensees (ABLE BC), told CTV Vancouver in a recent interview.

Professional licensing requirements

Professionals such as doctors and lawyers may need licences to work in other provinces, creating hurdles for both workers and the clients needing their services, especially in places where they are in demand.

“If you have an Alberta law degree, and you want to practise in B.C., you need licensing,” Lander said. “So those add costs, and those costs have to be paid by somebody, and it’s usually going to be the consumer.”

French-language laws

Some companies like GoodLife Fitness club and restaurant chain Swiss Chalet don’t exist in Quebec, partly because of the added complexity and cost of complying with French-language laws, Lander said.

“The French language laws are a huge interprovincial barrier,” he said.

Legal working age

Different labour laws could affect pay, as well as the ability for businesses to offer employment to residents, Lander suggested.

In Quebec, people as young as 14 can work as performers or babysitters, and with a parent’s permission, exceptions apply for those under that age.

In Saskatchewan, the minimum age for workers is 16, with exceptions for those aged 14 and 15. They need permissions from their parents or guardians and must complete a Young Worker Readiness Certificate Course.

Sales taxes

With differing sales taxes, businesses must program their cash registers and websites to adjust to the amounts, depending on where they are located in the country. Lander says this may deter some from expanding into other provinces if they don’t have the resources or money to adapt to the different requirements.

Trucking regulations

Varying rules for trucking range from vehicle sizes and weights to permits, safety standards and licensing, which stall the movement of goods and services across the country, according to a Macdonald-Laurier Institute report from May 2024.

The report suggests these “internal trade barriers” add costs to the goods being shipped and create inefficiencies.

“By requiring businesses to navigate a patchwork of provincial regulations, these barriers limit the overall market efficiency and raise prices for consumers,” according to the report. “The report finds that eliminating these barriers could lead to significant economic gains across Canada, with the potential to increase national GDP and reduce regional income disparities.”

With files from The Canadian Press and CTV Vancouver’s Rob Buffam