Several readers were surprised to hear that Canada imposes provincial “tariffs” or trade barriers that simply act as tariffs. Canadian politicians have been promoting a marketing campaign against US-imposed tariffs, but must recognize that their own domestic policy is hurting the Canadian economy in a massive way. Canada’s tariff rate on international imports averages 1.4%, utterly disproportional in comparison to domestic trade barriers. Estimates believe that current domestic trade barriers cost the Canadian economy $32 billion annually, but these interprovincial trade taxes can surpass 14% on domestic goods.
It is quite difficult for provinces to conduct business with one another; in fact, it is often more cost-efficient to work with international companies. Section 121 of the Constitution Act of 1867 implemented by the British Parliament states:
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