A quiet but determined shift is stirring in the Canadian economy. A new analysis from TD Economics shows that provinces across Canada are slowly chipping away at longstanding barriers to internal trade. These changes, while uneven, carry profound implications for the labour market and staffing firms that match talent with opportunity.
A Long-Dormant Engine
Canada’s internal trade(movement of goods and services between provinces) now accounts for about 35% of provincial GDP, down roughly 3 percentage points from a decade ago. That’s versus 65% for international trade, which has remained steady for years.
This decline starkly contrasts with European counterparts: inter-member-state shipments there contribute roughly 22% of EU GDP compared to just 18% here in Canada.
A Patchwork of Progress
The TD report finds that while every province has taken steps toward easing interprovincial barriers, progress is varied. Ontario leads the pack, followed by Nova Scotia and Manitoba. Prince Edward Island and British Columbia have also enshrined reforms into law. Meanwhile, Newfoundland and Labrador and New Brunswick have been more cautious.
Provincial initiatives include easing restrictions on mutual recognition of goods and licensed professionals. For instance, Ontario has eliminated exceptions to the Canadian Free Trade Agreement (CFTA) and simplified reciprocal recognition for licensed workers including in healthcare. Nova Scotia and Manitoba have enacted similar mutual-recognition laws, though often with carve-outs for certain regulated professions.
Gains That Could Be Bigger… or Diminutive
Optimists have pointed to potential boosts of $200 billion annually if interprovincial trade barriers were substantially dismantled. But more measured analysis, for example, a 2017 Bank of Canada study, suggests a modest 0.2% annual increase in potential GDP from a 10% barrier reduction.
Frictions As Costly As Tariffs
The Financial Times recently likened Canada’s internal trade barriers to a hidden 21% tariff equivalent. These arise from a tangle of licensing rules, regional regulations, and infrastructural inefficiencies, not to mention inconsistent provincial standards.
This obstructs not just goods but also services and labour mobility, raising costs, blunting productivity, and hampering staffing flexibility.
What It Means for Staffing Firms
Opportunities
1. Cross-Provincial Placements Made Easier
As licensing and quality recognition become more uniform, staffing agencies can place candidates in adjacent provinces with fewer hoops, especially in sectors like health, construction, wholesale trade, and professional services.
2. Broader Markets for Skilled Labour
Reduced regulatory friction opens up new territories. A firm in Ontario can more easily send workers to B.C. or Atlantic Canada, and vice versa, more efficient marketplace matching.
3. Infrastructure and Economy Projects Accelerated
The One Canadian Economy Act, enacted June 26, 2025, aims to fast-track both internal trade and major infrastructure projects by recognizing cross-provincial standards and labour credentials. Staffing firms positioned for megaproject staffing, especially in construction, engineering, and skilled trades stand to benefit.
Threats
1. Uneven Reform Creates Patchwork Demand
With provinces progressing at different paces, staffing firms must navigate a complex compliance landscape. Opportunities in one province may not translate seamlessly to another, particularly in regulated sectors.
2. Turf Wars and Pushback
Profession-specific associations and unions may resist easier labour mobility for fear of diluting standards or threatening local jobs. Legal and political opposition remains strong in some quarters.
3. Overhyped Growth Expectations
Large economic gains (like the $200 billion figure) are speculative. Realistic benefits may be smaller but still meaningful. Agencies that count on hyper-accelerated growth risk misallocating resources.
Canada’s push toward a more seamless domestic market is gaining traction but quietly and unevenly. As provinces unlock barriers to goods, services, and labour mobility, staffing firms find both new terrain and lingering obstacles ahead.
The most successful firms will be those nimble enough to adapt across provincial lines earmarking regulatory shifts as market signals, building cross-border mobility into their DNA, and positioning for sectors ripe for growth. In the evolving landscape of Canada’s internal trade, the demand ripple may be subtle but for the prepared staffing firm, every ripple counts.