Thursday, April 30, 2026
Foreword by Tim Sargent, model statutes by Paul Salembier
Canada’s constitutional architecture contains an implicit but unmistakable economic vision: a single national market in which people, goods, services, and capital move freely across provincial boundaries. This vision is not merely aspirational. It is woven into the logic of federalism, reflected in the distribution of powers, and reinforced by the animating principles of mobility, mutual recognition, and economic union.
Yet despite this constitutional foundation, Canada has never fully realized the integrated national economy that its founders assumed would emerge. Instead, the country has accumulated a dense thicket of regulatory barriers, fragmented standards, and jurisdictional inconsistencies that impede productivity, distort investment, and weaken national competitiveness.
Since its inception in 2010, the Macdonald-Laurier Institute has been a strong advocate for the removal of internal trade barriers – stating clearly that the federal government has the legal power and moral duty to ensure that there are no restrictions and impediments to the free movement of people, goods, services, and investment in Canada.
This foreword builds on that work, and introduces MLI’s legislative drafting project. We asked Paul Salembier – an expert in legislative drafting – to draft model statutes for both federal and provincial governments that would reflect this economic vision. These statutes are based on three papers commissioned by MLI to develop the intellectual underpinnings for the project: a paper by Paul Daly and Mark Mancini on a federal-provincial economic integration agency; a paper by Ryan Manucha on mutual recognition; and a paper by Paul Warchuk on property rights, all of which draw heavily on Malcolm Lavoie’s book, Trade and Commerce: Canada’s Economic Constitution.
Download the draft model statutes here:
Regulatory Harmonization Act, MLI
Trade Harmonization Act, Provincial, MLI
Property Rights Act, Provincial, MLI
The economic vision of the Constitution
The starting point for this project is the recognition that Canada’s Constitution presupposes an integrated economic union. Section 121 of the Constitution Act, 1867 –though interpreted narrowly by the Supreme Court of Canada – was drafted against a backdrop of intended economic unification. The division of powers assigns the federal government responsibility for trade and commerce, currency, banking, and interprovincial undertakings, while provinces retain jurisdiction over property and civil rights. The structure is not accidental: it reflects a belief that local autonomy and national economic coherence can coexist, provided institutions exist to manage the interface between them.
This vision aligns with the principle of subsidiarity, which holds that decisions should be made at the level closest to citizens unless broader coordination is required. Internal trade and labour mobility are precisely the kinds of issues where subsidiarity and federalism intersect. Provinces legitimately regulate professions, land use, and local markets, but when those regulations impede interprovincial movement or create duplicative standards, the national interest in economic integration becomes paramount.
However, this vision is very far from being realized.
Despite the vision of the Fathers of Confederation, Canada is very far from being an integrated economic union. Examples of interprovincial trade barriers include:
- Labour mobility: Dozens of professions require separate provincial certifications, even when training and competencies are equivalent.
- Product standards: Provinces maintain differing rules for food safety, trucking, construction materials, and energy systems.
- Regulatory duplication: Businesses operating in multiple provinces often face redundant inspections, reporting requirements, and compliance regimes.
- Capital movement: Financial services, securities regulation, and investment rules vary across jurisdictions.
- Transportation and logistics: Weight limits, vehicle configurations, and permitting rules differ between provinces.
These barriers impose real costs. Studies estimate that eliminating internal trade barriers could increase Canada’s GDP by 3–7 per cent – equivalent to hundreds of billions of dollars over time. In a world of geopolitical fragmentation, supply‑chain instability, and intensifying global competition, Canada can no longer afford the inefficiencies of a fragmented internal market.
Why does the vision remain unfulfilled?
If the Constitution implicitly supports an integrated economic union, why has Canada struggled to achieve it? The scholarship of Daly and Mancini provides a compelling explanation: Canada lacks the institutional machinery necessary to translate constitutional principles into operational reality. Their paper argues that internal trade reform repeatedly fails because governments rely on political agreements, working groups, and voluntary coordination rather than binding, enforceable mechanisms. The result is a system where provinces can agree in principle to reduce barriers while maintaining them in practice.
This diagnosis aligns with decades of experience. Internal trade barriers persist because:
- No institution has the authority to determine equivalency of standards across jurisdictions.
- No body can compel provinces to recognize each other’s regulatory decisions.
- Existing agreements lack enforcement mechanisms with real consequences.
- Regulatory fragmentation is often politically convenient, even when economically harmful.
The Canadian Free Trade Agreement (CFTA) illustrates this dynamic. While it contains commitments to reduce barriers, its dispute‑resolution system is slow, its penalties are modest, and its exceptions are numerous. As a result, the CFTA has not produced the deep integration that many hoped for.
Mutual recognition and the Daly/Mancini interdelegation model
How then to move forward? How can policymakers remove the political logjam that makes genuine free trade within Canada so hard? Ryan Manucha’s work on mutual recognition provides a crucial conceptual principle for moving forward. This is mutual recognition, which means that if a product, service, or professional qualification is lawful in one province, it would be lawful in all provinces – unless a province can justify a deviation on legitimate public‑interest grounds. This approach preserves provincial autonomy while preventing unnecessary duplication.
Daly and Mancini build on this by proposing a federal-provincial economic integration agency – a body to which both federal and provincial governments could delegate authority to determine equivalency, resolve disputes, and maintain a coherent national market. Their model recognizes that Canada’s constitutional structure does not easily permit unilateral federal action in areas of provincial jurisdiction, but it does allow for cooperative delegation to a shared institution.
The Federal Regulatory Harmonization Agency in the draft legislation draws heavily on this insight. It is designed to:
- Establish harmonized national standards.
- Determine equivalency between provincial standards.
- Facilitate dispute resolution.
- Publish studies identifying barriers.
- Make recommendations to provinces.
Crucially, the agency’s standards would not be imposed on provinces. Instead, provinces could adopt them through their own legislation, consistent with the principle of cooperative federalism. The draft provincial legislation allows them to do just that, in a way that overrides inconsistent provincial laws.
Property rights and the Warchuk framework
The third intellectual pillar of this project is Paul Warchuk’s work on property rights. His analysis highlights the fragmented and inconsistent protection of property rights in Canadian law, particularly in relation to regulatory takings – situations where government action does not formally expropriate property but effectively eliminates its economic use.
The Property Rights Act in the attached document responds directly to this problem. It provides that property is taken when “an owner of property is deprived of all reasonable uses of the property” or when “restrictions in an enactment eliminate all economically beneficial use of the property.” It also requires compensation for administrative takings, such as planning changes or permit refusals that render property unusable.
Two excerpts illustrate the Act’s approach:
- “Where an enactment reduces the value of a property by 75% or more, the owner of the property is entitled to compensation equal to the value of the reduction.”
- “Where a planning change … substantially reduces the value of a property … the owner may serve a notice … requiring [the authority] to acquire the property in the same manner as a taking.”
These provisions ensure that the costs of public policy are borne by society as a whole, not disproportionately by individual property owners. They also create incentives for governments to pursue regulatory objectives in ways that minimize unnecessary interference with property rights.
The importance of concrete legislative design
Why did we think it necessary to provide actual draft statutes? Even within government, legislative drafting is seen as a very specific task, one best left to a narrow priesthood of Department of Justice drafters.
The answer is that one of the recurring themes in internal trade reform is the gap between principle and practice. Governments often announce ambitious commitments that lack enforcement mechanisms, institutional support, or statutory authority. The result is a cycle of reform efforts that generate political attention but little structural change.
This project aims to break that cycle by providing specific language that would:
- Create defined rights.
- Establish durable institutions.
- Clarify jurisdictional boundaries.
- Provide mechanisms for dispute resolution.
- Ensure that harmonized standards have legal effect.
- Protect property rights in a comprehensive and coherent manner.
The drafting process requires precision because statutory language determines how institutions operate, how courts interpret obligations, and how governments interact.
A central design goal was to ensure that the proposed reforms would have real practical effect. Several mechanisms accomplish this:
- Priority clauses ensure that harmonized standards prevail over inconsistent provincial laws.
- Mandatory reporting requirements compel governments to identify and address conflicts.
- Clear definitions of takings prevent governments from avoiding compensation through regulatory means.
- Judicial review provisions allow courts to assess whether takings are “demonstrably necessary.”
- Institutional independence ensures that the federal agency can operate without political interference.
These tools move the proposals beyond symbolic commitments toward enforceable, durable reforms.
Conclusion
If Canada were to implement reforms like those contained in this project – stronger property rights, effective regulatory harmonization, and meaningful internal free trade – the economic impact would be profound. Canadians could expect higher productivity, greater labour mobility, lower costs for businesses and consumers and a stronger national economy better positioned for global competition. Individual citizens would also enjoy greater economic security, with less likelihood that they will be subject to arbitrary loss of property by governments.
The legislative proposals in the attached document are designed to make that vision achievable. They provide a practical, institutionally grounded pathway toward the integrated economic union that Canada’s Constitution implicitly promises but has never fully delivered.
Download the draft model statutes here:
Regulatory Harmonization Act, MLI
Trade Harmonization Act, Provincial, MLI
Property Rights Act, Provincial, MLI
Paul Salembier, BSc, LLB, LLM, is a former general counsel with Canada’s Department of Justice, in which capacity he provided advice on legislative and regulatory initiatives. He has more than three decades of experience as a legislative drafter, and has drafted well over 1,000 bills and regulations. Salembier has also taught regulatory law, statutory interpretation and legislative drafting at the University of Ottawa’s Faculty of Law, legislative drafting at Queen’s University’s Faculty of Law and legislative drafting as a visiting professor at the University of Hong Kong’s Faculty of Law. He has also given courses in legislative drafting and regulatory law to legislative counsel in Canada, Bangladesh, Malaysia, Singapore, and Hong Kong. He authored Regulatory Law and Practice, Third Edition, published by LexisNexis Canada in 2021, and Legal and Legislative Drafting, Third Edition, published by LexisNexis Canada in 2024, and has published articles on Aboriginal law, regulatory law, statutory interpretation and legislative drafting. He has produced and currently oversees an online course in legislative drafting at www.legislativedrafting.co.
Dr. Tim Sargent is a senior fellow and director of the Domestic Policy Program at the Macdonald-Laurier Institute. He is also a distinguished fellow at the Centre for International Governance Innovation, a Waterloo-based think-tank that addresses significant global issues at the intersection of technology and international governance. Prior to joining MLI, Sargent was deputy executive director at the Centre for the Study of Living Standards. He also spent 28 years in the federal government, where he held deputy minister and associate deputy minister positions at Fisheries and Oceans, International Trade, Finance, and Agriculture and AgriFood, as well as senior positions at the Privy Council Office. At Fisheries and Oceans, he oversaw passing and implementation of major overhauls of the Fisheries Act and the Oceans Act, and the Canadian Coastguard’s multi-billion-dollar fleet renewal plan. At International Trade, he oversaw successful negotiations for the Canada-US-Mexico Agreement (CUSMA) and the Comprehensive and Progressive Agreement for Partnership for Trans-Pacific Trade (CPTPP). Sargent has a PhD in Economics from the University of British Columbia, an MA in Economics from Western University and a BA (Econ) from the University of Manchester.
