Ontario, Manitoba agree to boost interprovincial trade, facing U.S. tariff crunch

As the threat of U.S. tariffs ratchets up pressure on the Canadian economy, the governments of Ontario and Manitoba have agreed to ease barriers on the flow of goods, services and workers between the two provinces.

Ontario Premier Doug Ford and Manitoba Premier Wab Kinew announced a memorandum of understanding (MOU) at a news conference Wednesday. The Ford government has recently signed similar MOUs with Nova Scotia and New Brunswick.

Speaking to reporters, Ford said interprovincial trade barriers cost the national economy $200 billion every year.

"Like President Trump's tariffs, they divide us and hold back our economy," Ford said.

The premier added that he looks forward to signing similar agreements with other provinces.

Kinew said in a news release the agreement will "unlock more economic opportunities for people in both provinces."

"We're facing a tariff war on two fronts and now is the time to build up this country we love so much," Kinew said in the release. "As premiers, we are all working toward the common goal of powering our Canadian economy toward the future."

Ontario's top exports to Manitoba include household goods, food and beverages, the province says. Manitoba's top exports to Ontario are canola oil products and conventional crude oil.

In 2021, trade between Ontario and Manitoba was valued at $19.5 billion, the province says.

Wednesday's agreement also includes direct-to-consumer sales of alcohol and improved interprovincial labour mobility, saying the provinces will aim to ensure a good, service or worker deemed acceptable in one province is also deemed acceptable in the other.

Last month, Ontario tabled new legislation that Ford said will make the province the first in Canada to unconditionally remove exceptions to interprovincial free trade.

Asked if he was disappointed that Ontario has only signed three MOUs with other provinces so far, Ford said he feels things are moving quickly and he hopes to sign with all the provinces and territories by July 1.

Ford also said he remains hopeful for a trade deal with the U.S., noting Trump appears to be "friendly with everyone now."

"You can't just ignore your largest customer, your largest trading partner," he said.

The agreement comes one day before Ford unveils his first Ontario budget since winning a third-straight majority government in February — one where the impact of Trump's tariffs on the auto and steel sectors will loom large.

Asked if he would divulge any budget details ahead of time, Ford was tight-lipped, but said U.S. tariffs have changed the calculus.

"We have to look at it through a different lens now since these tariffs have been put on us," Ford said.

"You have two options in a budget, you can start cutting and slashing, which I've never believed [in]. In tougher times, you go out there, you put money in infrastructure and keep building," he said.

"We can always balance in a year or two," Ford said. "The way I can describe is like the pandemic. You have to put money into the economy to keep things going."

The premiers are set to meet with Prime Minister Mark Carney early next month to discuss their wish lists of large-scale infrastructure projects.

Asked what's on his, Ford replied: building a new nuclear facility, a tunnel under Highway 401 and the mining of critical minerals in northern Ontario's Ring of Fire, the latter of which would be designated a "special economic zone" under new legislation called the Protect Ontario by Unleashing Our Economy Act.

The Ford government has faced fierce criticism from opposition parties for the proposed bill, which would allow the government to exempt itself from following laws on certain projects.

Ontario's Minister of Economic Development, Job Creation and Trade Vic Fedeli defended the special zones Wednesday by pointing to economic pressures from the U.S.

"We are in a war. We are in an economic war with the U.S.," said Fedeli, adding the zones will "help reduce red tape, help speed up the projects."

"This is all about paving the way for these companies to come to Ontario," said Fedeli. "We've got to get through the permiting and all of the things that are holding us back."