‘A really good way to start off the year’: New trade rules take effect in Canada

The legislation promised by PM Carney in 2025 aimed at reducing interprovincial trade barriers has officially come into effect, but issues remain.

Removing interprovincial trade barriers was a key priority for Prime Minister Mark Carney’s government in 2025 — and legislation that aims to achieve that has now come into force.

In November, the federal government announced it had finalized regulations first announced earlier in the year in Bill C-5, the Free Trade and Labour Mobility in Canada Act.

As of Jan. 1, provincial regulations and requirements for goods and services, as well as worker licenses and certificates, will be recognized at the federal level too.

“This removes duplication and red tape across the country, strengthening our economy for Canadian workers, businesses, and consumers,” said a government press release in November.

The bill incorporates a list of exemptions including food and alcohol.

“I think symbolically it’s a really good way to start off the year. (In terms of) actual impact, I think it’s more the provinces than the feds we’re looking for action from,” said Ryan Mallough, VP of legislative affairs with the Canadian Federation of Independent Business, in an interview with CTV News.

A separate mutual recognition agreement signed by all provinces and the federal government is also set to be implemented by June and would further impact interprovincial trade.

• New trade deal to chop red tape, knock down trade barriers across Canada

But experts suggest that with key goods excluded in both cases, there are still significant challenges.

“Alcohol - beer, wine, spirits - is one example that we hear a lot about, and so there are still ongoing conversations at the provincial level to make it easier to move those goods across borders,” said Stuart Trew, International Trade Policy Researcher with the Canadian Centre for Policy Alternatives.

While 2025 saw governments across the board push to trade more within the country – several bilateral agreements were signed between provinces – experts suggest 2026 needs to be about following through on those promises.

“There need to be tangible action on the ground this year and it needs to come quickly because the CUSMA threat is hanging over all of us,” said Mallough.

CUSMA Review

On the international trade front the stakes couldn’t be higher.

The Canada-U.S.-Mexico Agreement (CUSMA) is up for review this year, and Trew suggests the uncertainty is only putting more pressure on bolstering Canada’s domestic economy.

“I think it’s fundamental (to) our ability to respond to the threat from the United States,” he said.

Trew also says he believes tariffs won’t go away even if a new free trade agreement is signed.

While CUSMA has helped Canada avoid the widespread impacts of tariffs on the economy, the steel and aluminum, lumber and auto sectors have been hit hard.

“The fifty percent steel tariffs will in the short to medium term will probably substantially hurt if not destroy Canadian steel production, so that’s something we have to get a handle on,” said Trew. “We have to get a handle on the lumber tariffs; we need some resolution to that. We also have to deal on an emergency level with automotive trade.”

Formal talks for the review of CUSMA are set to get underway in mid-January ahead of a July deadline.

That’s when a decision will have to be made on whether to extend the agreement as is, negotiate a new one, or either country could also choose to walk away.