At some point in the future, Canada may find itself thanking Donald Trump for imposing cross-border tariffs, not because he sought appreciation, but because his actions forced us to examine our own economic structure and make necessary changes. His tariffs had an unintended consequence: they unified Canadians in their desire to buy Canada. Yet, despite this sentiment, the reality is that Canada does not make it easy for its own citizens to buy Canadian. The truth is, many industries in Canada remain heavily protected, operating within frameworks that limit true market competition.
A recent study by Christopher S. Cotton and Daniel Teeter, published in March 2025, found that an implicit 7% tariff exists on every product crossing provincial borders, leading Canadians to pay up to 14.5% more for goods than they would in a truly open market. This artificial pricing structure stifles competition, discourages innovation, and limits consumer choice. In addition to this, Canada’s long-standing supply management system has strictly controlled the production and pricing of dairy, poultry, and eggs, exacerbating these inefficiencies by increasing costs for consumers, limiting market entry, and restricting business growth.
Despite being a single country, Canada’s economy remains fragmented due to provincial regulations, protectionist policies, and inconsistent licensing requirements. Industries such as food, construction, transportation, and professional services are particularly affected. While national regulators exist, businesses frequently must comply with unique provincial rules, undergo multiple inspections at both federal and provincial levels, and navigate licensing barriers that restrict worker mobility. These unnecessary bureaucratic layers create friction in economic transactions, slowing business expansion and limiting productivity.
Quebec tends to have the most stringent regulations, often diverging significantly from national standards. In a promising development, provinces across Canada have begun working together to reduce internal trade barriers, recognizing that a fragmented market hampers economic growth and competitiveness. Ontario and Quebec introduce nuances that complicate compliance, while Alberta, Saskatchewan, and Manitoba align more closely with national regulations, making them among the most flexible provinces. The Atlantic provinces typically fall somewhere in between.
Recent discussions among provincial governments have focused on eliminating redundant licensing requirements, streamlining inspections, and aligning regulations to create a more seamless business environment. If successful, Internal Trade Minister Anita Anand believes this can unlock $200 billion of GDP over 10 years.
Canada’s supply management system dictates how dairy, poultry, and eggs are produced by imposing rigid quotas on farmers, negotiating prices through provincial boards, and using tariff-rate quotas to limit imports. This rigid structure leads to substantial food wastage while simultaneously removing incentives for farmers to innovate and increase efficiency. Without competition, industries stagnate, and productivity declines.
Businesses that rely on these products as inputs such as cheese producers, ice cream manufacturers, and restaurants, face inflated costs, which are inevitably passed on to Canadian consumers. Food manufacturers struggle to compete globally as supply-managed goods are significantly more expensive in Canada than in other markets. According to the World Bank’s 2021 International Comparison Program, food prices in Canada are approximately 52% higher than the global average, while prices in the United States are aligned with the global norm. These inflated costs affect every Canadian household, reducing purchasing power and increasing the cost of living.
Eliminating supply management would create a more dynamic and competitive agricultural sector, bringing down food costs for consumers and businesses alike. It would allow farmers and food manufacturers to expand operations, increase investment, and create jobs as market conditions become more favorable. The resulting price reductions and increased efficiency would enable Canadian businesses to be more competitive internationally. New Zealand serves as a compelling example of this transformation. After dismantling its supply management policies, its dairy production tripled between 1980 and 2014. Today, 95% of New Zealand’s dairy output is exported, demonstrating that a free-market approach fosters efficiency, growth, and global competitiveness. Canada has the potential to achieve the same success by embracing market-driven reforms.
Over the past four decades, Canada’s productivity has steadily declined in comparison to other nations. Prior to the pandemic, the country experienced annual productivity growth of 1.4%, but this has since reversed to an annual decline of 1.2%. Canada’s overreliance on easy access to the U.S. market has made the economy complacent, reducing the urgency to diversify and strengthen internal economic policies.
While Trump’s tariffs may have caused short-term disruption in Canada, they have also forced the country to confront our economic inefficiencies. History has shown that major disruptions often lead to necessary reform. Just as the COVID-19 pandemic accelerated digital adoption, these tariffs have compelled Canada to reevaluate outdated trade barriers and restrictive policies. If Canada embraces the principles of a free market, it will emerge stronger and thrive in the global economy.
Some steps have been taken toward regulatory and trade modernization, but incremental progress is no longer sufficient. A true commitment to open-market principles will generate higher GDP growth, drive innovation, and increase global trade opportunities. By eliminating supply management, dismantling interprovincial trade barriers, and reducing unnecessary regulations, Canada can create an environment that fosters business expansion, attracts foreign investment, and strengthens domestic industries. This transformation will not only improve economic efficiency but also lower costs for consumers, making life more affordable for all Canadians. The time for half-measures is over. Canada must fully embrace a free and open economy, one that competes on the world stage, drives national prosperity, and ensures a future of sustained economic growth. Trump has provided us a gift to be thankful for. Let’s not squander it.succession plan not only protects the business but also safeguards employees and supports the local economy.ing proactive financial management, working with professionals year-round, and leveraging modern accounting tools, you can turn your financial statements into a powerful asset for growth and success.
