What will this Act achieve?

This legislation enables the removal of barriers to the movement of goods, services, and workers across provincial and territorial borders that result from federal regulation.

When federal regulation overlaps with provincial/territorial regulation and both sets of rules would achieve a similar objective, a business will be able to follow the provincial or territorial rule. This will remove duplication and cut red tape.

The legislation also allows a worker with a license from a province or territory to easily get a federal license for the same job when one is required, without having to take any additional steps to receive this credential.

Examples of areas where Government of Canada rules overlap with those of provinces and territories include energy efficiency for appliances and labelling of organic foods. Areas where the Government of Canada is the only authority, such as airlines and banking, would not be covered by this legislation.

How does this bill advance internal trade?

The Government of Canada is committed to doing everything it can to eliminate barriers to internal trade and labour mobility.

While there is limited regulatory overlap between the federal government and the provinces and territories, this legislation addresses the few federal barriers to interprovincial trade of goods and services and labour mobility.

The purpose of the Free Trade and Labour Mobility in Canada Act is to promote free trade and labour mobility by removing federal barriers to the movement of goods, services, and labour within Canada, while continuing to protect the health, safety, and security of Canadians, their social and economic well-being, and the environment.

In practice, it will help businesses and Canadian workers by removing duplication of regulatory requirements, when there is a burden from having to comply with provincial or territorial and federal standards that achieve the same objective. This will make it easier to do business and work across the country.

This Act is aligned with similar provincial legislation advanced by Nova Scotia, British Columbia, Ontario and others. The Government of Canada will continue to work with provinces and territories towards collective action. Although each act will reduce barriers on their own, together, we will lay the groundwork to eventually implement mutual recognition of requirements related to internal trade across the country.

Who was consulted in developing this Act?

With respect to internal trade, provincial and territorial governments, Indigenous rightsholders, and national and subnational business organizations were consulted in the development of the legislation, and asked about federal barriers they thought should be addressed. Through the development of the regulatory framework following the implementation of the legislation, stakeholders will have further opportunities for consultation.

With respect to the Building Canada Act, the Clean Growth Office undertook consultation with provincial and territorial governments, Indigenous groups and stakeholders over the past two years to seek views on efficiencies in the federal regulatory process for major projects, and this feedback informed development of the Bill. In addition, information about the proposed legislation was shared with Indigenous groups ahead of its introduction.

The One Canadian Economy Bill was advanced with urgency given the need for a timely response in the current economic context.

The Government seems to have fast-tracked this bill. Why the urgency? Doesn’t this prevent from the necessary consultation process? Does fast-tacking this bill impede on Canada’s democratic processes?

The U.S. imposition of tariffs has upended Canada’s longstanding economic partnership with its southern neighbour. In response, Canada needs to immediately bolster its economic resilience by encouraging internal trade, diversifying external trade, building trade-enabling infrastructure projects and responsibly developing untapped energy and natural resources.

Canada must build critical new infrastructure at speeds not seen in generations. This includes the infrastructure to diversify our trading relationship and to become an energy superpower in both clean and conventional energies.

We must also remove federal barriers to the movement of goods, services and labour within Canada, to help grow our economy.

To meet the moment, the new One Canadian Economy legislation provides a framework to remove federal trade barriers and to advance major projects of national interest, so Canada can be stronger at home and abroad.

This legislation followed all necessary parliamentary procedures for the legislative process, and sought feedback from Indigenous Peoples, respecting the commitments in the United Nations Declaration on the Rights of Indigenous Peoples.

The legislation provides an enabling framework, with opportunities for meaningful consultation before it is implemented – through regulations to remove internal trade barriers, and through the process for listing of projects in the national interest.

The legislation ensures that Canada is taking immediate steps to improve productivity, growth, and economic competitiveness, while ensuring the same federal standards for health, safety, environmental protections and for respecting Indigenous rights, are upheld.

What is the impact of this new legislation on our GDP? How much of the $200 billion will this legislation unlock?

A 2022 Macdonald-Laurier Institute study, Liberalizing Internal Trade Through Mutual Recognition: A Legal and Economic Analysis estimated that eliminating all federal, provincial and territorial barriers to internal trade would reduce business costs, increase productivity, and could add up to $200 billion to the Canadian economy.

The most common issue raised by Canadian business and industry across the country is the regulatory differences that impede the movement of goods, services and labour between federal, provincial and territorial governments. While the federal government has taken steps to address these barriers, much of the work of reducing them still falls on the provinces and territories themselves.

Measuring the gains from removing federal trade barriers alone, or more specifically federal administrative duplication, remains a challenge as existing estimates on the cost of trade barriers across Canada can only be narrowed to specific economic sectors, but not by federal, provincial or territorial regulations. Federal officials continue to work on estimating the impact of this new legislation.

This Act mirrors similar Acts from Nova Scotia, British Columbia, Ontario, New Brunswick, Prince Edward Island and Manitoba. This legislation alone will not lead to the immediate removal of all internal trade barriers. But together with provincial and territorial actions, they will all move us closer to realizing the full economic gains.

If the gains to GDP are so little, why are you passing this new legislation?

As signatories to the Canadian Free Trade Agreement, all jurisdictions have committed to working towards reducing internal trade barriers. While the Government of Canada’s role in removing regulatory trade barriers may be smaller than it is for other jurisdictions, we are committed to doing our part to remove federal restrictions to internal trade. This is an important part of building one Canadian economy.

This new legislation does reduce federal red tape for businesses, moving us closer to one Canadian economy. In practice, it will help businesses and Canadian workers by removing duplication of regulatory requirements on internal trade, when there is a burden from having to comply with matching provincial or territorial and federal requirements. Overall, it will make it easier to do business and work across the country.

Although gains are minimal as there are limited areas of overlap between federal and provincial and territorial regulations related to internal trade, this new legislation helps lay the framework to eventually implement coordinated mutual recognition across the country.

The federal government’s new legislation is aligned with recent efforts from provinces and territories to accelerate the recognition of regulatory differences. Nova Scotia led the way by passing the Free Trade and Mobility within Canada Act to enact the recognition of goods, services and labour mobility for jurisdictions that reciprocate, followed by similar agreements from British Columbia, New Brunswick, Prince Edward Island, Ontario, Manitoba and Newfoundland and Labrador.

If all federal, provincial and territorial barriers to internal trade are removed, this alone could expand the Canadian economy by $200 billion. This represents up to $5,000 for every Canadian.

How many goods and services will be affected by the removal of federal requirements? What’s an example of these goods and services?

There are limited economic sectors which are considered to have overlapping federal and provincial/territorial requirements. Some examples include agriculture and agri-foods, trucking, and manufacturing.

This new legislation applies to federal requirements on the trade of goods and services in these sectors and others.

Examples of where it would apply:

• Energy Efficiency Standards – a product meeting Ontario, Quebec or Nova Scotia’s energy efficiency standards (among others) will meet Canada’s comparable standards

• Organic products – a product certified as organic by Quebec or British Columbia will meet Canada’s organic standards

Examples of where it wouldn’t apply and why:

• Canada Labour Code – it applies to services, but its application does not impact interprovincial trade. (Application clause 7b). Federally regulated workplaces will still need to comply with the Canada Labour Code.

• Excise Tax Act – the GST and HST apply on goods and services, but its application does not impact interprovincial trade. (Application clause 7b). The GST and HST must continue to be paid on goods and services.

• Gasoline – Under the Canadian Environmental Protection Act, the Government of Canada regulates the level of lead content in gasoline, whereas PTS regular other aspects such as maximum prices for consumers. Products would therefore continue to need to meet federal environmental protection requirements, as there is no comparable provincial or territorial requirement.

When a provincial or territorial regulation is deemed comparable, what happens? Is the federal government removing its own?

When a good or service produced, used, or distributed in line with provincial or territorial requirements is recognized as meeting comparable federal requirements on interprovincial trade, it will be treated as if it meets federal requirements.

The Government of Canada is not revoking its own regulations; rather, it will deem a good or service acceptable if it has met a province or territory’s comparable requirements in order to remove federal barriers to internal trade.

The same applies for workers, where a worker authorized to work in a province or territory would be authorized to work the same occupation in federal jurisdiction without the need for further approvals or requirements.

Will this legislation result in the lowering of federal standards? How are we ensuring the health, safety and security of Canadians is maintained?

This legislation enables the federal recognition of comparable provincial and territorial requirements related to internal trade. In this case, “comparable” means that a provincial or territorial regulation/standard addresses the same aspect of a good or service and is intended to achieve a similar objective.

The Act will not apply to areas where the Government of Canada decides there is an unacceptable risk to the health, safety and security of Canadians, their social and economic well-being and the environment. There will be exceptions to the Act in these cases. Those will be made through regulations.

Will environmental protections still be in place?

Yes. Under the new One Canadian Economy Act (Bill C-5), the federal government can designate certain major projects as being in the national interest. When this happens, the project is allowed to proceed through a streamlined federal process, even if it affects areas protected under laws like the Species at Risk Act or the Migratory Birds Convention Act.

This does not remove environmental protections. Instead, it changes how approvals are granted:

• Streamlined Authorization: Once a project is designated as nationally important, it is conditionally approved to move forward. The focus of federal reviews shifts from deciding if the project can proceed to determining how it should proceed responsibly.

• Coordinated Oversight: A single federal minister, in consultation with other departments and Indigenous communities, will issue a unified set of conditions. These conditions will include measures to protect the environment and ensure compliance with existing laws.

The goal is to balance environmental stewardship with the need to advance projects that support Canada’s economic resilience, energy security, and climate goal.

What review processes (environmental and regulatory) will be maintained for projects under the One Canadian Economy Act?

Projects will still follow all the usual review processes based on their type and sector. What changes under Bill C-5 is how approvals are handled for projects declared to be in the national interest.

Instead of waiting for separate approvals under each law, these approvals are considered “conditionally granted” from the start. However, project developers must still provide all the required information to federal departments.

That information will be used to create a single conditions document—a unified set of rules and requirements that replaces the need for multiple separate authorizations. This document will ensure environmental protections, Indigenous rights, and other legal obligations are respected, while helping important projects move forward more efficiently

Projects will continue to be subject to all regulatory review processes that would ordinarily apply to the project – which will vary depending on the project type and sector. While the discretionary decision points under this Act and regulations will be deemed conditionally approved, the proponent will continue to follow processes to provide information to the relevant departments and agencies, to inform the development of a conditions document that will take the place of the authorizations under each of the Acts and regulations.

What is the role of the Major Projects Office?

A major projects office will be established to help implement this new process for national interest projects

A key intent is for the Office to be the point of contact to coordinate project reviews and work with the various implicated departments. It will be responsible for assisting proponents as they navigate through the assessment and permitting process. This includes consultation with Indigenous Peoples and working with provinces and territories in areas of shared jurisdiction.

Project proponents will continue to provide the requisite information to federal agencies and departments, including the Impact Assessment Agency, who will review the project as they would in the ordinary course. However, instead of multiple ministers rendering individual regulatory decisions pursuant to their respective statutory authorities, those ministers will inform and advise the designated minister, who will then issue a consolidated “conditions document.”