Canadian Free Trade Agreement

The Canadian Free Trade Agreement (CFTA) is an intergovernmental trade agreement signed by Canadian ministers representing the federal government and all 13 provinces and territories (PTs). The objective of the CFTA is to reduce and eliminate, to the extent possible, barriers to the free movement of persons, goods, services, and investments within Canada and to establish an open, efficient, and stable domestic market.

The Agreement commits provincial, territorial and federal (FPT) governments to a comprehensive set of rules that will help to achieve a modern and competitive economic union for all Canadians.

Importantly, the CFTA preserves the ability of FPT governments to adopt and apply their own laws and regulations for economic activity in the public interest to achieve public policy objectives. Such objectives include the protection of public health, social services, safety, consumer protection, the promotion and protection of cultural diversity and workers’ rights.

The CFTA rules apply automatically to almost all areas of economic activity in Canada, with any exceptions being clearly identified.

Federal Exceptions under the Canadian Free Trade Agreement

An exception under the CFTA is a carve out taken by a signing government, which includes the federal government and all provincial and territorial governments, to indicate where the agreement does not apply. For example, a signing government could choose to take an exception to exclude a specific industry. This would mean that the rules of CFTA would not apply to the industry listed in the exception.

The Government of Canada has taken exceptions to ensure it can uphold national security, national economic and social policy, international trade obligations, and its responsibility to support regional interests.

Under the CFTA, the Government of Canada has taken:

• Exceptions for Existing Measures – refers to agreements, legislations, regulations, policies and other measures by the Government of Canada that were already in place before the signing of the agreement.
• Exceptions for Future Measures - refers to areas where an existing or future agreements, legislation, regulations, policies or other measures by the Government of Canada may need to be introduced.
• Procurement Exceptions – refers to existing and future government fully or partially owned organizations, agencies and entities that follow procurement rules when buying goods and services.

As part of the Government of Canada’s commitment to reducing barriers to internal trade, it has undertaken successive reviews of its exceptions under the CFTA, which has resulted in the removal of more than 60% of federal exceptions since the Agreement was first launched in 2017. Details:

• Government of Canada removing more than half of federal exceptions to the Canadian Free Trade Agreement to strengthen Interprovincial Trade (February 21, 2025)
• The Government of Canada is making it easier to trade within Canada (July 23, 2024)
• Removal of Federal Exceptions in the Canadian Free Trade Agreement

Committee on Internal Trade (CIT)

The CIT is comprised of all FPT ministers responsible for internal trade, and is responsible for supervising the implementation of the CFTA, including providing oversight over a number of CFTA working groups; assisting in the resolution of disputes; approving the annual operating budget of the Internal Trade Secretariat (ITS); and considering any other matter that may affect the operation of the CFTA.

The CIT meets annually. The chair rotates each year between all 14 parties, including the federal government, as set out in the CFTA. The federal government last chaired the CIT in 2013.

Regulatory Reconciliation and Cooperation Table (RCT)

The CFTA established the Regulatory Reconciliation and Cooperation Table (RCT), a FPT body that oversees the process to align regulatory frameworks across all jurisdictions to reduces barriers to trade, investment, and labour mobility within Canada.

Internal Trade Secretariat (ITS)

The ITS is an FPT intergovernmental affairs body located in Winnipeg, Manitoba, provides administrative and operational support to the CFTA and CIT Ministers.