Carney vs. Trump: How Canada’s PM is Uniting Provinces to Defy U.S. Tariffs

🚀Carney’s Bold Move

As U.S. President Donald Trump’s tariffs put the squeeze on Canadian businesses, Prime Minister Mark Carney has a new game plan: tear down Canada’s own trade barriers to strengthen the economy and create new growth opportunities at home.

Carney is promising to remove all federal-level interprovincial trade barriers by July 1 — a move he says will unlock billions in new economic potential. “We can give ourselves far more than they can take away,” he said during the election campaign that propelled his Liberal Party to victory. Now, he’s racing to deliver on that promise.

💡 Why It Matters

Trump’s unpredictable trade policies have left Canadian exporters in the lurch, forcing them to find new markets overseas. But Carney argues the real low-hanging fruit lies within our own borders. Canada’s internal trade barriers — everything from inconsistent food safety standards to licensing roadblocks — hold back economic growth and productivity.

Incredibly, about half of Canadian businesses didn’t buy or sell goods outside their home province in 2023. Economists believe removing these barriers could boost the economy by anywhere from 0.5% to 8%. And the Bank of Canada agrees: more internal trade would mean more economic activity and less inflationary pressure.

📅 What’s Next?

Carney will meet with provincial and territorial premiers on Monday to push them to tear down the roadblocks that keep provinces from trading freely with one another. He’s also asking for their ideas on big, nation-building projects to fast-track — think pipelines, mining, and new trade corridors that could power Canada’s economic future.

Ontario is already blazing a trail. In April, it became the first province to scrap all of its exemptions under the 2017 Canadian Free Trade Agreement — a pact meant to promote internal trade, but one that’s been watered down by countless carve-outs. The federal government is now following suit, promising to wipe out its exemptions by July 1.

🏗️ But Challenges Remain

While Carney’s push is gaining momentum, it won’t be easy. Some trade barriers are deeply entrenched, like Quebec’s French-language labelling rules, which reflect local political will. And many provinces have long protected local industries by keeping out competitors.

Still, Trump’s tariffs have forced provinces to rethink old habits. Ontario, for example, has recently struck trade deals with Manitoba, Alberta, Nova Scotia and others, opening the door to more east-west trade as relations with the U.S. become more uncertain.

🔗 A Shift in Focus

Canada’s economy has traditionally flowed north-south — about three-quarters of Canadian exports head straight to the U.S. But Carney’s push for more internal trade aims to rebalance those flows, tapping into the huge economic potential across provinces and strengthening Canada’s independence in the process.

“Businesses and governments need to decide if they’re willing to make the changes and investments to unlock this,” said John McNally, a senior policy adviser at Scotiabank. Yes, some companies might lose local market power, he acknowledged, but they’ll also gain access to bigger, more diverse markets.

🍷 Cheers to Opportunity!

One sector already seeing the upside? 🍷 Wineries. Alcohol trade between provinces has long been hamstrung by rules designed to protect local producers. Aaron Dobbin, CEO of Wine Growers Ontario, said freer trade would be a huge win.

“We view this as a great opportunity to introduce Canadians to Ontario’s amazing wines and build a loyal customer base across the country,” Dobbin said. He admitted it would bring more competition, but he believes the benefits are worth it.

🤝 Building Consensus (and Facing Resistance)

But big questions remain. Will all provinces agree to open up? Some existing restrictions are tied to the market power of certain industries, making them hard to untangle. And Carney’s push to fast-track major infrastructure projects — to turn Canada into an “energy superpower” — could hit resistance from Indigenous leaders who say they’re being left out of decision-making.

Assembly of First Nations National Chief Cindy Woodhouse Nepinak said Indigenous communities feel “disrespected,” warning Ottawa that ignoring them now could bring bigger challenges down the road.

📊 By the Numbers

Trade in goods and services between provinces totaled $532 billion in 2023 — about 18% of Canada’s GDP, according to Statistics Canada. That’s impressive, but still well below the $978 billion in goods exports Canada sends abroad.

Meanwhile, imports accounted for nearly 34% of Canada’s GDP last year, compared to just 14% in the U.S. Half of Canada’s imports come from our southern neighbor — a risky reliance as Trump’s tariffs take hold.

👀 Looking Ahead

For Carney, this is more than an economic tweak — it’s a bold reimagining of Canada’s trade landscape. His campaign promise to beat Trump’s tariffs and make Canada the strongest economy in the G7 was a big reason he won in April. Now, it’s time to make good on that.

With provinces beginning to strike their own internal trade deals and federal-level barriers on track to disappear by July 1, momentum is building. But real success will depend on getting every province — and every sector — to buy in.