Unless otherwise noted, economic estimates are drawn from Trevor Tombe, The Economic Implications of Alberta Separation, commissioned by the Calgary Chamber of Commerce.
Canada’s internal trade barriers impose a significant cost on the national economy. The federal government estimates that eliminating remaining barriers to trade and labour mobility could increase Canada’s GDP by as much as $200 billion – equivalent to approximately $5,100 per person. More than $500 billion in goods and services already moves across provincial and territorial borders each year, representing almost 20 per cent of Canada’s GDP, while roughly one-third of Canadian businesses participate in internal trade. The costs associated with internal trade barriers are felt across the economy, from manufacturing, transportation and agriculture to construction, professional services, retail and regulated occupations
Alberta’s economy depends heavily on access to customers elsewhere in Canada. Approximately 330,000 Alberta jobs – 13 per cent of the provincial workforce – are directly or indirectly supported by exports to other provinces, spanning manufacturing, professional services, wholesale trade, transportation, hospitality and agriculture. Interprovincial exports generate approximately $78 billion in income for Alberta workers and businesses. Alberta has therefore been among the provinces pushing mutual recognition, labour mobility and fewer regulatory barriers, including recent measures intended to allow goods approved elsewhere in Canada to be sold in Alberta without duplicative assessments.
For Alberta, however, frustration with internal trade barriers should be an argument for reforming Canada’s internal market, not leaving it. Separation would not eliminate existing barriers. It would risk converting imperfect interprovincial trade into international trade, while creating new uncertainty around market access, infrastructure, regulation, taxation and investment.
Alberta’s prosperity depends on trade
Alberta’s economy is deeply integrated with the rest of Canada. Businesses across the province rely on Canadian customers, suppliers, workers and service providers, while interprovincial trade supports activity across a broad range of sectors.
That dependence is particularly visible in manufacturing, professional and scientific services, wholesale trade, transportation and warehousing, accommodation and food services, and agriculture. These are not niche or isolated industries; they are part of the everyday economic infrastructure of the province and depend on the ability to move goods, services and people across provincial boundaries efficiently.
Internal trade also gives Alberta businesses access to the scale of the Canadian market. For many firms, the ability to sell beyond Alberta is essential to growth, investment and competitiveness. Barriers that fragment that market can raise costs, reduce productivity and make it harder for businesses to expand nationally.
This is why internal trade reform matters so much for Alberta. The objective should be to make it easier for Alberta firms to reach Canadian customers and operate across the country — not to introduce a new layer of uncertainty around that access.
Economic integration works in both directions
Alberta benefits from access to Canadian customers, but it also relies on goods, services and intermediate inputs produced elsewhere in the country. Those inputs allow Alberta firms to operate, invest and produce goods and services for both domestic and international markets.
The relationship is mutually beneficial. Trade with Alberta supports an estimated 800,000 jobs elsewhere in Canada, including approximately 230,000 in Ontario and 125,000 in British Columbia. Interprovincial trade involving Alberta generates approximately $151 billion in income across Canada, including $78 billion in Alberta, $34 billion in Ontario and $21 billion in British Columbia. Next to the United States, Alberta is Ontario’s largest trading partner.
Alberta is therefore both a major contributor to and a major beneficiary of the Canadian internal market. This mutual dependence strengthens the case for ambitious reform. It also demonstrates why separation would involve far more than a cha
Canada is making progress on internal trade
While Canada’s internal market still has considerable room for improvement, it is important to recognize that significant work is already underway.
The federal government has removed all 53 of its exceptions under the Canadian Free Trade Agreement since the agreement was introduced in 2017. Federal, provincial and territorial governments have also approved the Canadian Mutual Recognition Agreement (CMRA) on the Sale of Goods, built around a straightforward principle: with defined exceptions, a good legally sold in one participating province or territory should be able to be sold in another without additional requirements. Governments are also advancing faster labour mobility, including a 30-day service standard for processing applications in regulated occupations.
Alcohol provides a useful example of both the persistence of internal barriers and the progress that can be made through cooperation. For years, provincial restrictions have made it unnecessarily difficult for Canadian producers to sell directly to consumers in other provinces. Governments have begun dismantling those restrictions: Alberta and British Columbia have established direct-to-consumer arrangements for wine, while other provinces have entered similar agreements. A broader group of provinces and territories has also committed to developing a pan-Canadian framework for direct-to-consumer sales, although implementation has taken longer than originally planned.
Reforming barriers is preferable to creating a border
Supporters of separation may point to internal trade restrictions as evidence that Confederation limits Alberta’s economic potential. The barriers are real, and governments have moved too slowly to remove them. But separation would not result in frictionless trade. Instead, current differences in provincial rules could be compounded by customs and border administration, rules-of-origin requirements, separate regulatory and certification systems, tax and currency uncertainty, new inspection and reporting requirements, and negotiations over access to markets and infrastructure. The choice is not between today’s imperfect internal market and a frictionless market after separation. It is between continuing to remove barriers within Canada and creating a new border that would require the terms of Alberta’s economic relationship with Canada to be negotiated.
There is a useful parallel with Brexit where the UK moved from participating the EU’s Single Market to conducting trade across a new economic boundary. Alberta separation would similarly shift business from trade within a common national market to trade between separate jurisdictions.
Tombe’s analysis models the effect of increases in non-tariff trade costs similar to those experienced by the UK following Brexit. If separation increased the cost of Alberta’s trade with Canada by five per cent, the analysis estimates that Alberta’s real GDP per capita could decline by approximately 1.3 per cent, the province could have roughly 21,000 fewer workers, and annual GDP could be approximately $10 billion lower. At an eight per cent increase in trade costs, the estimated annual GDP loss rises to approximately $16 billion, with roughly 34,000 fewer workers and real GDP per capita nearly two per cent lower. These scenarios are not predictions of exactly what separation would produce as the ultimate outcome would depend on negotiations between Alberta and Canada, but they demonstrate that when hundreds of thousands of Alberta jobs and tens of billions of dollars in provincial income depend on the Canadian market, even relatively modest new friction matters.
Alberta should lead a stronger internal trade agenda
The shortcomings of Canada’s internal market should not be accepted. Alberta should position itself as the country’s leading advocate for a freer and more competitive national economy. The goal should be a domestic market in which, wherever practical, a product approved in one province can be sold in another; a qualified worker can move between provinces without duplicative certification; businesses can compete openly for procurement opportunities; and firms operating nationally do not face unnecessary layers of provincial paperwork.
Recent federal and provincial action demonstrates that progress is possible. The challenge now is to turn individual agreements and bilateral arrangements into a consistently open Canadian market.
Alberta has every reason to demand faster and more meaningful internal trade reform, but the weaknesses of the Canadian internal market should not obscure its enormous economic value. The right response is to dismantle barriers within Canada, not create a new border around Alberta.
About the Calgary Chamber of Commerce
The Calgary Chamber exists to empower our business community to advance a prosperous Calgary and Canada. As the convenor and catalyst for a vibrant, inclusive and prosperous business community, the Chamber works to build strength and resilience among our members and position Calgary as a magnet for talent, diversification and opportunity. As an independent, non-profit, non-partisan organization founded in 1891, we build on our history to serve and advocate for businesses of all sizes, in all sectors across the city.
