Finalized Canadian Free Trade Agreement to Replace Agreement on Internal Trade


On April 7, 2017, a Canadian Free Trade Agreement (“CFTA“) News Release announced that Ministers representing the federal, provincial and territorial governments concluded negotiations on a new CFTA that will help to reduce barriers to trade and increase economic growth across the country.  The CFTA will come into effect on July 1, 2017 and will replace the existing Agreement on Internal Trade, which has been in place since 1995.  Internal trade represents about one-fifth of Canada’s annual GDP, or $385 billion, and accounts for almost 40% of provincial and territorial exports.  According to the Bank of Canada, removing interprovincial trade barriers could add up to two-tenths of a percentage point to Canada’s potential output annually.

The initiative to strengthen and modernize internal trade was started in December 2014.  The CFTA is aimed at reducing barriers to trade, investment, and worker mobility as well as increasing choice for consumers, expanding access to government contracts, and creating more jobs for Canadians.  The CFTA includes provisions that are intended to increase access to billions of dollars in government procurement opportunities for Canadian businesses.  For instance, suppliers and service providers will be able to bid on government procurement opportunities outside their home provinces.