Internal trade improving on paper, but not yet in practice

Report card shows improved grades across Canada, but most small businesses say it's no easier to operate across provincial borders

TORONTO, July 15, 2026 /CNW/ -- Governments across Canada are making progress on internal trade, but many small businesses are still not seeing improvements in their day-to-day operations, according to the 2026 State of Internal Trade: Interprovincial Cooperation Report Card released today by the Canadian Federation of Independent Business (CFIB).

Governments across Canada are stepping up, making internal trade a national priority. But progress on paper isn’t the same as progress in practice. Marvin Cruz, senior director of research at the Canadian Federation of Independent Business (CFIB), looks at the remaining barriers and explains how Canada can truly achieve free trade.

The report shows clear improvement compared to previous years, with the federal government earning an A+ and 10 jurisdictions achieving an A. Much of this progress is tied to growing adoption of mutual recognition legislation, including a pan-Canadian agreement that will allow goods approved in one province to be sold in another without additional regulatory requirements.

2026 State of Internal Trade report card grades are:

Jurisdiction	Canadian Free Trade Agreement Exceptions (40%)		Select Barriers to Internal Trade (20%)		Status of Items from Reconciliation Agreements (40%)		Mutual Recognition (Multiplier)	Overall Score and Grade
MB	7.3	C+	5.4	D	9.6	A	9	9.8	A
SK	6.9	C	5.3	D	9.2	A	9	9.7	A
NB	5.9	D	6.4	C-	8.8	A-	9	9.7	A
NS	2.5	F	6.9	C	9.1	A	9	9.6	A
QC	0.0	F	5.0	D	9.6	A	9	9.5	A
ON^1	10	A+	6.1	C-	8.4	B+	5	9.3	A
NT	4.9	D	2.0	F	8.8	A-	8	9.2	A
PEI	3.3	F	4.3	D	8.8	A-	8	9.1	A
AB	8.0	B	4.9	D	9.5	A	5	9.0	A
YT	2.7	F	3.0	F	8.8	A-	8	9.0	A
BC	7.6	B-	4.1	D	9.6	A	5	8.9	A-
NU	4.6	D	2.0	F	8.6	B+	1	6.1	C-
NL*	4.3	D	2.7	F	8.5	B+	1	NA	NA
FED^2	10	A+			9.7	A	10	10.0	A+

Notes:

1. While "A+" is not currently included in the grading scale, Ontario and the federal government are awarded an A+ in the area of Canadian Free Trade Agreement Exceptions for having no exceptions.
2. The federal government is scored on two areas: an economic impact score based on the procurement exceptions it maintains from the CFTA in 2025, and the implementation status of reconciliation agreements. Both areas are weighted equally (50% each), as the select barriers area was not available for this analysis.

*NL given an NA due to recent change in government.

CFIB applauds the significant progress made but cautions that these high scores reflect commitments more than actual progress felt on the ground. Nearly seven in 10 small businesses (69%) reported not noticing meaningful changes in doing business across Canada over the past 12 months, with 16% reporting it has become more difficult. Many continue to face challenges related to regulatory differences, certification requirements, and delays, all of which add costs. Awareness also remains an issue, with more than half (57%) of business owners not yet familiar with recent reforms.

"It's encouraging to see governments achieving high grades and making further commitments to improve internal trade," said Keyli Loeppky, CFIB's senior director of interprovincial affairs. "But small businesses are still dealing with inconsistent rules, extra paperwork, and higher costs. Until announcements turn into barriers coming down in a meaningful way, progress on paper won't translate into results for small businesses."

Persistent barriers continue to affect key areas such as tax complexity, licensing and regulatory differences, and transportation and logistics. Restrictions on the movement of food and alcohol products also remain a source of frustration for many businesses, limiting market access and consumer choice.

CFIB will update its report card methodology for 2027 to better reflect the real-world experience of small businesses and the outcomes of internal trade reform.

"Internal trade progress has moved more in the last two years than in the last decade, and our methodology needs to keep pace," said Loeppky. "We want to make sure we're measuring what matters most to small businesses and highlighting where governments are making a real difference. We anticipate 2027 grades to be much lower than this year if governments don't take implementation of agreements and MOUs seriously."

CFIB is calling on governments to turn commitments into measurable results by accelerating implementation and removing the most persistent internal trade barriers. That includes:

• expanding mutual recognition to cover all the sale and use of all goods, services and labour (including food, alcohol, WCH and OHS);
• reducing exceptions under the Canadian Free Trade Agreement and Canadian Mutual Recognition Agreement;
• delivering on the direct-to-consumer alcohol sales MOU
• simplifying rules that add unnecessary cost and complexity for businesses operating across provincial and territorial borders.

"Governments have shown they can work together and make progress on internal trade -- now they need to deliver," concluded Loeppky. "Small businesses don't need more announcements. They need fewer barriers, clearer rules, and real improvements they can see in the day to day. Canadian leaders have held enough press conferences and signed enough MOUs. If we want a stronger, more competitive economy, the focus now must be on implementation and results."

About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada's largest association of small and medium-sized businesses with 103,000 members across every industry and region. CFIB is dedicated to increasing business owners' chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.

SOURCE Canadian Federation of Independent Business (Toronto)

For media enquiries or interviews, please contact: Dariya Baiguzhiyeva, CFIB, 647-464-2814, [email protected]