Canada

Canada Weighs Internal Trade Reform Amid US Tariff Threat

Published JAN 23 2025

Story

Above: Canadian Prime Minister Justin Trudeau speaks Jan. 6, 2025. Image credit: Dave Chan/Contributor/AFP via Getty Images

The Facts

Canadian Prime Minister Justin Trudeau and provincial premiers met virtually Wednesday to discuss strengthening internal trade and craft a response to US Pres. Donald Trump's threatened 25% tariffs on Canadian goods, which could take effect Feb. 1.
CBC
CTVNews
Some provincial leaders supported potential dollar-for-dollar retaliatory tariffs against American goods. All except Alberta's Danielle Smith are opposed and Saskatchewan Premier Scott Moe advocates for smaller, targeted tariffs to minimize economic impact.
CTVNews
The premiers agreed to reconvene the Committee on Internal Trade urgently to recommend concrete measures for liberalizing interprovincial commerce, as current barriers reportedly hamper trade worth approximately $528B annually between provinces and territories.
CBC
Internal trade barriers in Canada include prohibitive restrictions on alcohol sales, differing technical regulations across provinces, and complex licensing requirements. There's reportedly potential for an increase of 4% in gross domestic product growth if fully liberalized.
The Free Press
Previously, British Columbia Premier David Eby on Tuesday announced a task force — including business, Indigenous, and labor representatives to coordinate the provincial response to the tariff threat. Eby also urged citizens to reconsider US travel and purchases.
Canada's National Observer
Also on Tuesday, Ontario Premier Doug Ford in an interview proposed instructing the provincial liquor control board to remove American-made alcohol from shelves if tariffs are imposed and targeting Republican-held areas for retaliation.
ap

Sources Split

LEFT

CENTER

RIGHT

ESTAB
CRIT

CENTER

PRO
ESTAB

The Spin

Narrative A

Trump may be bluffing in order to angle for a better deal when the current trade deal with Canada expires. But the Canadian federal government and its provinces need to be ready to respond. Not only must the premiers get on the same page, but reforms must be made to make it easier for consumers to buy Canadian products in order to solidify the country's economic independence.

Market Watch

Review

Narrative B

There may be a chance for the divided premiers to eventually agree to an approach for defending against these tariffs, but, unfortunately, Trudeau and his Liberal colleagues have put Canada at too much of a disadvantage already. Policies that promoted a radical agenda against climate change at the expense of Canada's energy industry — in addition to other Liberal follies — continue making the country susceptible to Trump's bullying.