Each year, Canadian businesses move more than $530 billion worth of goods and services across provincial and territorial borders — an amount equal to almost one-fifth of Canada’s gross domestic product. By eliminating federal, provincial, and territorial internal trade barriers, the federal government estimates this could boost Canada’s GDP by as much as $200 billion over time.
Starting in 2026, new internal trade rules began to take effect in Canada, opening new doors for businesses while also changing the rules of the game when it comes to risk. These reforms include measures set out in the Free Trade and Labour Mobility in Canada Act and the Canadian Mutual Recognition Agreement (CMRA). Under CMRA, goods that meet the regulatory requirements in one province or territory can now be sold in others, though important exceptions remain, including many food and alcohol products.
For many small businesses, this is good news, since it opens up potential new markets across the country, while reducing red tape. But change won’t happen overnight. Harmonizing thousands of rules and regulations — from labelling requirements to trucking weights — is likely to be a long, slow process. And, for small businesses, navigating this uncharted territory comes with potential operational and liability risks.
What are interprovincial trade barriers?
Interprovincial trade regulations in Canada were originally intended to protect local jobs and industries, but in most cases have made it harder and more expensive to do business across the country. A 2025 BDO survey of business leaders across Canada found that while the majority of respondents (88%) have been actively engaging in interprovincial trade, more than half (58%) say interprovincial barriers have prevented them from expanding into additional provinces.
Provincial taxation and tariffs were cited as the top trade barrier by 57% of respondents, while transportation and logistics — such as freight costs, infrastructure limitations, and regional transport rules — were an issue for 54% of respondents. Almost all business leaders (95%) in the BDO survey said they’ve faced delays or unexpected costs due to interprovincial transportation or warehousing regulations.
Interprovincial barriers come in many forms, from inconsistent professional licensing standards to local procurement restrictions to bans on direct-to-consumer purchases. By removing barriers to internal trade and labour mobility, the idea is to build one economy instead of 13, which could lower operating costs, increase market access, and enable faster expansion with fewer regulatory hurdles and streamlined compliance processes.
What these changes mean for your business
These regulation-related barriers are equivalent to a 9% tariff, though that’s even higher in service sectors such as education and health care. By removing internal trade barriers, Canada’s economy could gain nearly 7% in real GDP — or $210 billion — over time, according to a report by the International Monetary Fund (IMF).
While the benefits are clear, it will still take time to remove red tape and streamline regulations. During this transition, short-term friction could arise from the “regional regulatory ambiguity” and “uneven provincial adoption of federal standards,” according to BDO.
“With the removal of provincial trade barriers, Canadian businesses will likely have to navigate inconsistent licensing, workforce mobility restrictions, and lagging infrastructure updates in certain provinces,” according to BDO. That means, for risk mitigation, they should “conduct a regulatory audit, assess supply chain exposure, and update internal processes to reflect anticipated policy shifts.”
How insurance can help protect you from these changes
Small business insurance can help to mitigate risks during this transition period. For example, new transportation licensing requirements in another province could delay the shipment of goods. Or, changing rules could lead to contract disputes with a supplier in another province or territory.
Cargo insurance can protect your goods from damage, theft, or spoilage while travelling across provincial or territorial lines, while business interruption insurance can help to cover lost income for trade-related disruptions. As an extension of business interruption insurance, contingent business income coverage addresses supply chain interruptions caused by the failure of suppliers or customers.
Other optional coverages include legal expense insurance, which provides coverage for legal costs related to changing regulations, contracts, and statutory license protection, and specialty/management liability insurance, which covers unique risks that could arise from operating across provincial borders.
Your insurance needs may also change as these regulations evolve. The right coverage means you can benefit from the easing of trade barriers — without risking non-compliance and legal liability. Learn more about how you can protect your business by visiting our small business insurance page today!
