## Internal Trade in Canada: Case for Liberalization

_IMF Working Papers, July 22, 2019_

## Source details

**Canonical URL:** [Internal Trade in Canada: Case for Liberalization](https://www.imf.org/en/publications/wp/issues/2019/07/22/internal-trade-in-canada-case-for-liberalization-47100)

## Other formats

- [Markdown version](/en/publications/wp/issues/2019/07/22/internal-trade-in-canada-case-for-liberalization-47100/index.md)
- [Structured JSON version](/en/publications/wp/issues/2019/07/22/internal-trade-in-canada-case-for-liberalization-47100/index.json)
- [Bundle manifest](/en/publications/wp/issues/2019/07/22/internal-trade-in-canada-case-for-liberalization-47100/bundle-manifest.json)

## Bibliographic details
- Authors: Jorge A Alvarez, Ivo Krznar, Trevor Tombe
- Published: July 22, 2019
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498326650.001

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### Summary
- The paper assesses the costs of internal trade barriers in Canada and proposes policies to improve internal trade.
- Estimates suggest that complete liberalization of internal trade in goods can increase GDP per capita by about 4 percent.
- Employment is expected to be reallocated toward provinces that experience large productivity gains from trade.
- The findings underscore the need for federal, provincial and territorial governments to work together to reduce internal trade barriers.
- The paper notes significant scope to build on the new Canadian Free Trade Agreement to more explicitly identify key trade restrictions, resolve differences, and agree on cooperative solutions.

### Key findings and quantitative results
- Complete liberalization of internal trade in goods → increase GDP per capita by about 4 percent.
- Reallocation of employment toward provinces with large productivity gains from trade.

### Policy recommendations and implications
- Federal, provincial, and territorial collaboration is necessary to reduce internal trade barriers.
- Build on the Canadian Free Trade Agreement to:
  - More explicitly identify key trade restrictions.
  - Resolve differences among jurisdictions.
  - Agree on cooperative solutions to lower internal trade costs.

### Subject areas and keywords
- Subject: Employment; International trade; Labor; Trade agreements; Trade balance; Trade barriers; Trade liberalization
- Keywords: Canada; cost elasticity; costs of trade barriers; data description; elasticity of trade; Employment; free trade; free trade trade agreement; gains from trade; Global; government procurement rule; input-output linkages; Internal trade; migration model; real wage; Trade agreements; Trade balance; Trade barriers; trade cost; trade growth decomposition; trade in Canada; Trade liberalization; WP

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## Content in this bundle

- **Working Paper**
  - [Working Paper (Markdown version)](/-/media/files/publications/wp/2019/wpiea2019158.pdf.md){rel="alternate" type="text/markdown"}
  - [Working Paper (PDF)](/-/media/files/publications/wp/2019/wpiea2019158.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2019/07/22/internal-trade-in-canada-case-for-liberalization-47100_