Charles Napier Sturt — I want you to remember this name. Sturt was a British army officer who contributed much to the mapping of the Australian interior. He and other members of an official 1844 expedition risked their lives trying to find a freshwater inland sea deep in Australia’s desert regions. So sure was Sturt of the sea’s existence that the expedition included a boat and some sailors to pilot it (!). The idea, of course, turned out to be an illusion.

Sturt’s story has a useful lesson for Canada in 2025. While we navigate the changed regional and global trading landscape created by the upheaval south of the border, Canada too must avoid steering a course guided by convenient illusions or comforting mirages.

And that is why I feel I must, with due respect, address the growing chorus of Canadian economists, elected officials, think-tanks, pundits and others who have been hyping one specific response to the American tariff threats: pulling down Canada’s “interprovincial trade barriers,” which, they claim, would add as much as $200 billion annually to our domestic economy. If true, that sum is greater than the anticipated impact of the Trump tariffs.

What are these barriers? A recent RBC report defines them as “the many factors that impede access to a provincial market for businesses or workers from another province.” Per RBC, these include “regulatory and administrative differences such as variations in licensing recognition, safety certifications, and technical standards.”

A potential $200 billion annual economic boost sounds too good to pass up. But this is where, upon closer inspection, the hype begins to fade. The $200 billion figure is itself an estimate. As CIBC’s economics team recently commented about this issue, “Remember that economists don’t really have the ability to measure each of these barriers and do a study of them one at a time. So, they naturally look for some roundabout methods to estimating the (cost of the) barriers.”

CIBC continued: “And essentially these (estimates) revolve around trying to explain trade flows, looking at the size of the markets and their distances, and then looking at what isn’t explained and essentially assigning that to a trade barrier.”

Thus, the “estimating” behind this $200 billion figure is really a projection of the results that may (or may not) materialize after particular barriers are removed.

That is, the estimate is a theoretical take on how much internal trade Canada should ideally have.

This is a bit like Charles Sturt’s dogged insistence that somewhere in the middle of Australia there “should” have been a freshwater inland lake.

There’s another very sound reason to question the urge to put interprovincial trade barriers at the top of Canada’s economic “to do” list. When it comes to improving our economic resilience, there are other opportunities we should immediately focus on, with objectively larger upside potential. Significantly, they all involve putting energy into diversifying our products, not just markets.

To improve our current poor terms of trade, for example, we need more high-margin, Canadian-made products and more value-added exports from our natural resources sold in more markets. We must also reform our tax code to support the creation of entrepreneur-led companies in the innovation economy and develop strategies to help new companies scale up, increasing our stock of valuable intellectual property and maintaining control of crucial data.

Chasing zombie issues distracts us from focusing on where our public policy and public discourse needs to go. Specifically, how do we build a resilient, sovereign, higher value-added economy that reflects our human and natural potential?

This kind of economy starts with sovereign digital and communications infrastructure, value-added energy and critical mineral solutions, and shrewd import substitution — underpinned by transparent spillover analysis for all public sector investments. So why aren’t we talking about these goals with the same vigour?

Is there a lot of latent internal economic dynamism that can be unlocked? Yes. Should we be trying to unlock it with smart policy changes? Definitely. Right now, chasing new shiny objects while we need to dramatically shift how Canada governs its economy is a luxury we cannot afford.

Taking down interprovincial trade barriers that date back to Confederation and have survived wave after wave of previous reform attempts — we will get to those in due time. For today, our most pressing task is to position a small, open economy like Canada’s for success in highly contested global markets, which means thinking beyond our relatively small internal market and focusing on where the biggest growth potential resides.

This is a time to commit ourselves to big goals — to build big, not small.

John Ruffolo is the Founder and Managing Partner of Maverix Private Equity, a private equity firm focused on technology-enabled growth and disruption investment strategies and Co-Founder and Vice Chair of the Council of Canadian Innovators.

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