Industry Minister Christian Paradis, this year's chairman of the national committee on internal trade, says such barriers cost the country billions of dollars every year.
Provincial and territorial laws and regulations often make it difficult or impossible to sell goods or do business across their borders.
The various levels of government signed an agreement on internal trade in 1995, but progress on opening things up has been slow and haphazard.
The committee was set up to review progress under the agreement.
Paradis says he will push for real regulatory reform, simplified business registration and reporting, consistency between international and internal trade rules and removal of barriers created unilaterally by federal regulations.
"The barriers to trade within our own country cost billions every year," Paradis said in a speech to the committee. "Some estimate as much as $50 billion in GDP is lost. This is a cost that we simply cannot afford."
He said red tape needs to be cut to open up the country.
"What I hear from Canadian business owners is clear: overlapping and inconsistent regulations and standards cost them time and money," Paradis said.
"Something as simple as varying regulations for tire widths forces companies to purchase different tires for different provinces.
"This increases costs and decreases growth and expansion across the country."
The need to file different kinds of paperwork and pay separate fees in each province drives up the cost of opening a business, he added.
Solving the problem of internal trade barriers requires co-operation, he added.
"Our government is committed to working with all our partners to make it better."