'CFIB urges the federal government and its agencies to work in partnership with the provinces and territories to ensure Bill C-5 is implemented in line with its original intent'
Nova Scotia, Ontario, and Manitoba have emerged as the top performers in the Canadian Federation of Independent Business’s (CFIB) 2025 Interprovincial Cooperation Report Card, signalling a significant shift in efforts to reduce domestic trade barriers.
Nova Scotia scored the highest with a 9.4 (A grade), followed closely by Ontario (9.2) and Manitoba (8.9). At the other end of the scale, the Yukon received the lowest score at 4.6 (D).
"I’m thrilled Nova Scotia is being recognised for making things better for businesses and workers, and I hope it continues to encourage other provinces and territories to join us and make free trade a reality, nationwide," said Premier Tim Houston. "I won’t stop working in the best interests of hard-working Nova Scotians, and this government will continue to push to advance mutual recognition policies, cut red tape, and make it easier for businesses and people to thrive in Nova Scotia."
Previously, Nova Scotia introduced legislative amendments to enhance the new Traffic Safety Act, expanding access for a broader range of commercial trucks and passenger vehicles registered in other provinces.
The annual scorecard evaluates each federal, provincial, and territorial government’s progress on internal trade, grading them on areas such as Canadian Free Trade Agreement (CFTA) exceptions, regulatory reconciliation, and select trade barriers.
“Western provinces tend to outperform their eastern counterparts, largely due to the New West Partnership Trade Agreement (NWPTA). Signed in 2010, the agreement aims to reduce barriers to trade, investment, and labour mobility between British Columbia, Alberta, Saskatchewan, and Manitoba,” said CFIB in its report.
“For example, businesses operating in any of the four provinces can bid on government procurement contracts in the other provinces, which has helped to increase competition and drive down costs. This has had a particularly positive impact on small- and medium-sized businesses, which may not have had the resources to navigate different regulatory frameworks in each province.”
According to CFIB, Ontario became the first jurisdiction to eliminate all of its CFTA exceptions, a move that earned it an A+ for that indicator. Nova Scotia led legislative reform by enacting Bill 36, which commits to the mutual recognition of goods, services, and labour across jurisdictions.
Previously, Ontario Premier Doug Ford, alongside Saskatchewan Premier Scott Moe, signed an agreement aimed at boosting both provincial economies by enhancing competitiveness and dismantling trade barriers within Canada.
However, CFIB’s report also cautions that the broader national landscape remains fragmented, warning that bilateral memoranda of understanding could dilute the potential of true mutual recognition.
“Many of the new legislative measures apply only to ‘reciprocating jurisdictions,’ meaning a jurisdiction may require individual negotiation of agreements with each of its counterparts. With 14 federal, provincial, and territorial governments, this could result in up to 196 separate agreements – an overly complex and inefficient approach,” said CFIB.
“True mutual recognition should not require dozens of bilateral deals. Instead, it can be implemented more effectively through broader commitments that apply unilaterally, as British Columbia and Quebec have committed to doing.”
The 2025 edition of the report card also highlights that 79% of small businesses support their provincial or territorial governments adopting mutual recognition legislation. “While the momentum is encouraging, the challenge now lies in translating legislation into consistent, nation-wide implementation,” CFIB stated.
Small businesses continue to face obstacles that impede cross-provincial hiring and operations. CFIB found that 89% of business owners want faster government action on internal trade, and 58% believe reducing these barriers would create new opportunities. Challenges include delays in recognising professional certifications, differing workers’ compensation and occupational health and safety (OHS) requirements, and inconsistent tax regimes.
Labour mobility remains a key concern for employers. Although eight jurisdictions allow full mobility for licensed practical nurses, no province or territory fully recognises another's workers’ compensation or OHS standards. “Businesses repeatedly cited regulatory inconsistency as a key reason for not expanding into other provinces,” CFIB reported.
The report further revealed that only a few jurisdictions have set clear timelines for professional credential recognition. Nova Scotia and Prince Edward Island now require regulators to respond to applications within 10 business days, while Ontario and Manitoba have established a 30-day standard.
With 62% of small firms shifting focus to domestic markets due to tensions with the United States, CFIB argues that simplifying interprovincial trade is essential to bolstering Canada’s economic resilience. The organisation continues to advocate for a single, unified internal market to improve supply chains, labour mobility, and national competitiveness.
“CFIB urges the federal government and its agencies to work in partnership with the provinces and territories to ensure Bill C-5 is implemented in line with its original intent; to build a truly unified Canadian economy,” the group stated.
Recently, the federal government will remove all remaining federal exceptions from the CFTA, eliminating all 53 that have existed since the Agreement’s introduction in 2017.
