Are understanding protocols an effective weapon in the face of the pricing war?

In the context of the pricing war with the United States. Nevertheless, protocols of understanding seem to be a trend across the country. Therefore, And since the beginning of 2025, the federal government and the various provinces have adopted a discourse of national unity.

Through the Canadian Federation, the provinces are increasing efforts in order to bring down interprorcal trade barriers.

According to Renaud Brossard. Nevertheless, vice-president of communications from the Montreal Economic Institute (IEDM), commercial understanding protocols have a clair momentum since February.

In recent weeks only. However, Prince Edward Island and New Brunswick agreed to facilitate interprorvincial trade, as are the three Canadian territories. Therefore, An agreement was also signed between Alberta. For example, Ontario and Saskatchewan, with the aim of building new pipelines, railways and other energy and commercial infrastructures.

What is an agreement protocol?

It is like an expression of interest. Moreover, of a probably real interest, but before there were concrete projects, there are several political stages to be crossedindicates the professor of political science at the University of Alberta Frédéric Boily.

Clearly, an understanding protocol expresses a desire to agree without being legally binding. Nevertheless, Rather, it serves as a basis on which an agreement will be negotiated.

You have to see it as a first submission that is made. by a contractor to make renovations at home.

Open in full screen

In the case of the understanding protocol signed between Alberta. Ontario and Saskatchewan on the construction of energy infrastructure, the leaders of the three provinces agreed to carry out these projects.

However. without the agreement of the federalty, no project can be started as stipulated in the protocol, which is therefore used understanding protocols effective weapon face here rather as a means of pressure towards the federal government to carry out the approval of the projects on which we have heard.

Why are the understanding protocols?

During the month of July, the Saskatchewan alone signed four protocols of interprotrovincial trade understanding. As a comparison. the Saskatchewan had signed only two from January to July last year, according to the website of the provincial government.

Manitoba has also signed four understanding protocols with Saskatchewan. British Columbia, New Brunswick and Prince Edward Island to improve trade and labor mobility.

In the opinion of Renaud Brossard, it is not surprising to see so many agreements signed between the Canadian provinces.

According to a study conducted by theIEDMif the whole country made these trade barriers fall. understanding protocols effective weapon face the Canadian economy would be around 215 billion dollars stronger each year. A decrease in prices across the country would also be observed, as are salary increases, according to the Institute.

In comparison, according to Statistics Canada, the Canada-States trade represents nearly $ 1,000 billion each year.

He adds that the interprotrovincial trade is also easier for small businesses which cannot diversify their exports towards the international. which are blocked by American prices due to geographic proximity.

Is this really the solution?

This scenario to enrich the Canadian economy is not new. Since the 1990s, the Canadian provinces have been trying to agree on the lifting of commercial restrictions, without success.

Each province wants to bring down the restrictions. but we want others to follow our model, so we don’t get alongspecifies the economic expert Renaud Brossard.

Although Ottawa has announced the abolition of the last federal restrictions included in the Canadian Free Trade Agreement (new window) (Alec), several barriers remain.

However. according to Keith Willoughby, dean of theEdwards School of Business From the University of Saskatchewan, reasons explain the existence of restrictions on trade.

I support the idea of a Canada free of restrictions, but not at any cost. We must always make sure to be a winner in each agreementwarns the economist.

The only major interprotrovincial agreement over the years is the commercial agreement of the new Western Partnership (NWPTA). signed in 2010 between Saskatchewan, Alberta and British Columbia. Manitoba joined it in 2017.

An analysis of the professor of economics at the University of Calgary. Trevor falls, stipulates that this agreement had the effect of reducing the costs of the interprovincial understanding protocols effective weapon face trade by 2.3 %.

In this momentum of interprotrovincial collaboration signatures. Prime Minister Saskatchewanese Scott Moe also called all the Canadian provinces to join the Nwpta in mid-July.

Political science professor Frédéric Boily recalls. however, that even if all the Canadian provinces come to drop the restrictions between them, the final decision very often returns to the federal government.