One Canadian Economy Act to Boost Internal Trade & GDP 

Recent U.S. tariffs have highlighted the need to remove barriers that split up the Canadian economy and reduce opportunities for citizens. Canada’s new government wants to build big, build bold, and build now. The federal government passed Bill C-5 on June 20, 2025, to support this vision. This new law creates the Free Trade and Labour Mobility in Canada Act and the Building Canada Act.

How Internal Trade Barriers Hurt the Economy

Unlike trade between countries, provinces cannot charge tariffs on transactions with each other because the Constitution prohibits this. Instead, Canada’s system has created internal trade costs by accident. This happened as an unintended result of having different rules, standards, and certifications across provinces.

A business that wants to buy or sell in another province may need to follow multiple regulations before starting operations. This naturally increases the cost of doing business, which in turn creates a small reason not to pursue such transactions in the first place. The same is true for companies looking to operate across provincial boundaries. These seemingly small problems can stop firms at the margins, preventing them from scaling up to the level their productivity might otherwise allow.

Internal trade problems, therefore, drag on productivity in much the same way that international trade barriers do. They allow relatively less productive firms to remain larger than they otherwise would be or, in some cases, to exist at all. These problems are not so large as to prevent internal trade entirely. But they do matter at the margins, subtly shaping business decisions and reducing economic efficiency. Currently, internal trade accounts for roughly one-fifth of Canada’s economy. This is significantly less than the share of international trade, which is nearly double. 

The success of this Act could bring many benefits beyond what experts have already predicted. The International Monetary Fund (IMF) estimates that removing Canada’s trade barriers between provinces could increase GDP per capita by about 4 percent for goods alone. The IMF also found that Canada’s non-geographic trade barriers between provinces could equal an average tariff of 21 percent on goods and services.

A stronger, more unified Canadian economy could also lead to a stronger Canadian dollar. This would be visible on any forex trading app, as the currency gains value through improved economic performance. A stronger dollar benefits Canadian consumers and businesses by making imports cheaper and increasing Canada’s purchasing power on the global market. 

What is the One Canadian Economy Act?

The One Canadian Economy Act aims to unite Canada’s economy by removing trade barriers between provinces and territories. This legislation will help businesses operate more easily nationwide and give workers better job mobility.

The Act includes two main parts:

• The Free Trade and Labour Mobility in Canada Act (FTLMA) 
• The Building Canada Act (BCA)

The Free Trade and Labour Mobility in Canada Act

The FTLMA requires that goods, services, and workers can move freely between provinces with few limits. It also makes it easier for federal agencies to accept provincial licenses and certifications by creating a single review process. Any product or service that meets one province’s standards will also automatically meet federal rules. The federal government will not add requirements when provincial standards are good enough. In these cases, meeting provincial rules means meeting federal rules as well. This system helps Canada work as one big market where businesses can easily sell their products anywhere in the country.

The federal government cannot do this alone. Provinces must also help remove trade barriers. Many provinces have already passed laws to support these national goals. Quebec passed Bill 112, Nova Scotia passed Bill 36, and British Columbia passed Bill 7 to align their rules with the national plan.

The Building Canada Act

 The BCA helps Canada’s economy by allowing federal approvals for major projects to be made faster. The goal is to cut approval time to two years instead of five. It gives project developers early federal approval, which reduces the chance of last-minute rejections. Projects still need full review and must follow all federal rules. The BCA includes a time limit. After five years, no new projects can use the faster approval process unless the government renews it through new laws.

The BCA also created a new Federal Major Projects Office and put one federal Minister in charge of all initiatives. This gives project developers one central contact point with the federal government, which should reduce delays when developers need to work with many different federal departments.

The Minister must first identify projects as National Interest Projects (NIPs). The Minister looks at several factors when deciding:

• Strengthen Canada’s independence, strength, and security
• Provide economic or other benefits to Canada
• Have a good chance of success
• Support Indigenous peoples’ interests
• Help with clean growth and Canada’s climate change goals

The NIP system covers major projects in energy, mining, and transportation. This includes ports, mines, renewable energy systems, and pipeline construction.

The BCA recognizes that many NIPs may fall under the Impact Assessment Act (IAA). The IAA sets out how to evaluate major projects’ environmental and social impacts. It aims to prevent or reduce significant adverse effects before they happen. The IAA process starts with a planning phase where the project developer defines the project scope and identifies potential concerns. This is followed by a detailed impact assessment phase. The IAA process still applies, but the BCA makes one key change: it removes the standard 180-day planning phase.

Summary and Future Outlook

The One Canadian Economy Act will help unite Canada’s economy by removing trade barriers between provinces and speeding up government approvals for critical national projects. The Act creates the groundwork for a unified internal market and faster project approvals. However, its success depends on provinces working together and effectively implementing the plan.