Can Canada’s bold move to free internal trade offset U.S. tariffs and boost its economy? Find out how!
In a bold move to counteract the impact of U.S. tariffs, Canada is setting its sights on removing internal trade barriers. Prime Minister Mark Carney announced plans to achieve free trade within the country by July 1, a strategy that could significantly boost the economy and reduce trade costs.
The Plan: Free Trade by July 1
Carney revealed that the government aims to introduce legislation by July 1 to allow goods to move freely across the country without federal barriers. “We can more than offset the effects of any U.S. tariffs by eliminating internal trade barriers alone,” Carney stated. This initiative is expected to reduce trade costs by up to 15% and expand the economy by 4% to 8%.
Strategies to Achieve Free Trade
To achieve free trade, Carney outlined three main approaches. First, he proposed harmonizing regulations across provinces. Second, he suggested mutual recognition of rules between provinces. Third, he emphasized creating common national standards. These steps aim to simplify processes and reduce the time needed to develop major resource projects, such as mines and oil pipelines.
Also Read: U.S. Tariff Spillover Risks: How Canada’s Economy Could Pay the Price
Addressing U.S. Tariffs
The urgency of this plan is heightened by recent U.S. tariffs on Canadian steel and aluminum. More tariffs are expected to follow. Given that 75% of Canada’s exports go to the U.S., the economy is particularly vulnerable to a prolonged trade war.
Carney’s strategy includes easing access to employment insurance for laid-off workers. Additionally, businesses will be allowed to defer corporate income tax payments to help them cope with the impact.
Simplifying Infrastructure Approvals
Carney also introduced a “one-window approval process” to make it faster to approve big infrastructure projects. This will remove repeated checks by both federal and provincial governments. The government will also pay for better transportation to places where resources are extracted. They will create a national plan for trade and energy routes to help with these projects.
Canada’s plan to remove internal trade barriers is a big step toward making the economy stronger. By making trade easier within the country, Canada hopes to balance the impact of U.S. tariffs. These changes are also expected to help the economy grow in the long run, which will be good for businesses and workers across the country.
Also Read: Tariffs as Inflation Shields: A Bold Move by the Federal Reserve
