Canada’s trade barriers between provincial borders is estimated to be equivalent to a 9% tariff.
The IMF estimates that eliminating these barriers could increase Canada’s economy, increase household incomes, housing construction, home prices and the size of mortgages Canadians need and can qualify for.
Source:
IMF – Canada’s Internal Trade Barriers
CMHC – Trade Barriers and Housing
The federal government’s Free Trade and Labour Mobility in Canada Act came into force on January 1, 2026. It allows certain goods, services and workers that meet requirements in one province to be recognized in another.
Approximately 19% of Canada’s GDP (goods, services) moved between provinces in 2022, A 2026 analysis by the IMF estimates that removing provincial trade barriers could increase real GDP by almost 7% (approximately $210 billion). Stronger economic growth and employment could raise household incomes and help more people qualify for mortgages.
Source:
Government of Canada – Free Trade and Labour Mobility Act
Statistics Canada – Interprovincial Trade
IMF – Canada’s Internal Market
Fewer Trade Barriers Could Increase Income, Housing and Homeownership
Reducing trade barriers could improve access to the workers, materials and services required to build homes.
Canada needs to build significantly more homes to keep up with demand and reduce pressure on housing prices. CMHC estimates that housing construction would need to increase by 72% to bring affordability back to 2019 levels. More construction could produce more purchase mortgages and construction financing.
CMHC estimates that approximately 25% of Canada’s construction workforce could retire by 2034. Recognizing comparable occupational qualifications could make it easier for skilled tradespeople to work in provinces facing labour shortages. This could increase housing construction and moderate the amount buyers need to borrow.
Furthermore, estimates forecast that eliminating trade barriers could increase household incomes by approximately 6% and initially give about 300,000 additional households access to homeownership.
Fewer Trade Barriers Could Lower Housing Costs
Removing trade barriers could give builders greater access to materials, professional services and prefabricated housing components from across Canada. More competition and fewer regulatory differences could reduce some costs and make additional housing projects financially viable.
This could increase construction financing and eventually produce more homes to meet mortgage demand. If supply grows sufficiently, greater choice could also moderate home prices and the amount buyers need to borrow.
Source:
CMHC – Trade Barriers and Housing Supply
CMHC – Construction Productivity
CMHC – Housing Supply Report
Overall, removing interprovincial trade barriers could increase housing construction, household incomes and mortgage qualification. But as with anything economically related, if housing demand grows faster than supply, home prices and required mortgage amounts could also rise.
