Late last year, we examined Canadian Prime Minister Mark Carney’s ambitious plan to boost productivity by breaking down internal trade barriers, cutting red tape and accelerating investment. Six months on, many of those proposals have been translated into law. We asked leading accounting firms how the reforms are affecting businesses, where progress has been made and how advisers are helping companies navigate continued trade tensions with the US.
Six months ago, when AB examined Canada’s internal trade barriers, Carney was promising to break them down. Today, several of those reforms have become law. The former central banker has pushed through legislation designed to ease the movement of goods, services and workers, fast-track major projects and reduce federal red tape – the most ambitious attempt in a generation to create a more integrated Canadian market.
‘There’s been more progress in the past year than in the previous 20 years’
The economic rationale is straightforward. Earlier this year, the International Monetary Fund estimated that Canada’s internal barriers act like a nationwide tariff of around 9%, concentrated in services. At the same time, business investment has been so weak for a decade that Canadian workers now receive only about 55 cents of new capital for every dollar invested per US worker, according to analysis by the CD Howe Institute using OECD data. The result has been weaker productivity, slower wage growth and growing concern about the country’s long-term competitiveness.
Obstacle removal
The clearest progress in Carney’s reforms has come on the barriers themselves. A federal law removing obstacles to the movement of goods, services and workers took effect on 1 January 2026; a mutual-recognition agreement signed by all 13 jurisdictions allows most goods approved in one province to be sold in another from June; and Ontario’s credential reforms, including a new 30-day standard for recognising qualifications, are making it easier for skilled workers to move.
‘There’s been more progress in the past year than in the previous 20 years,’ says Joy Nott, partner in trade and customs at KPMG in Canada. It is a striking claim, and she qualifies it immediately. Progress has been uneven and ‘we are not yet at the point of having a truly seamless internal market’. Food, alcohol and many licensed professions remain partially shielded from competition, while ‘the momentum has slowed somewhat over the last few months’.
Even so, the changes are already creating opportunities for professional advisers. As more companies consider expanding into neighbouring provinces, they encounter unfamiliar sales tax regimes, reporting requirements and regulatory obligations. Nott says much of the practical work currently flowing to advisers focuses on helping businesses understand provincial tax differences and compliance requirements.
The second obstacle is Canada’s long-standing difficulty in getting major projects built. The government’s response has been to create a Major Projects Office tasked with pushing nationally significant schemes through approvals that have historically delayed investment.
‘Investors need bankable propositions’
Fifteen projects have been referred so far, representing more than C$125bn of investment and roughly 60,000 construction jobs. In November, Carney and Alberta Premier Danielle Smith also agreed plans for a new bitumen pipeline to the British Columbia coast. Foreign direct investment reached C$96.8bn in 2025, its highest level since 2007, although the CD Howe Institute notes that much of the total reflected acquisitions rather than entirely new investment.
Improve the offer
Yet faster approvals are not the same thing as successful projects. ‘Investors need bankable propositions,’ says Mauricio Zelaya, partner and national economics leader at EY-Parthenon. ‘That means clear risk-return profiles, predictable timelines and a high degree of certainty around approvals.’
The constraint, he argues, is increasingly shifting from regulation to execution. Labour, materials and industrial capacity may prove bigger obstacles than red tape. For finance teams, that changes the nature of the work. As barriers fall and approvals accelerate, the focus shifts towards building credible business cases, forecasting returns, securing financing and managing project risks.
Internal focus
Progress on internal reform is unfolding against a dramatically different external backdrop. Relations with Canada’s largest trading partner have deteriorated sharply over the past two years. ‘The quarrel with the US has added to the urgency,’ says Nott. Long-standing frustrations with internal barriers suddenly appeared more costly once tariffs raised questions about Canada’s dependence on the American market.
‘Internal trade reform helps, but it will not offset these impacts in the short term,’ he says. ‘This is simply one lever among several.’ Diversification, Nott argues, is likely to matter more. Companies are increasingly exploring new trading relationships and ‘NATO-aligned markets’ as they seek alternatives to excessive reliance on the US.
The tariff shock has also transformed the value of trade data. ‘Most companies don’t normally have direct access to their own trade data,’ says Nott. Historically, customs information attracted little attention because tariffs were negligible. Today, finance teams need detailed visibility over where products cross borders, how much duty they incur and how alternative scenarios might affect profitability. In response, KPMG has developed a tariff modeller that allows clients to analyse trade flows and quantify their exposure under different tariff assumptions.
The coming year will provide the first real test of Carney’s strategy. The review of North American trade arrangements, the first financial closes on fast-tracked infrastructure projects and the continued removal of internal barriers will all reveal whether a more integrated Canadian economy can finally reverse years of weak investment and productivity growth.
