This report was published in partnership with the Fraser Institute.
Key Points
- Occupational licensing makes it illegal for aspiring workers to begin working before obtaining a credential issued by the government. To obtain the credential, workers must often obtain minimum levels of education and training, pass exams, pay fees, and meet additional entry requirements.
- By limiting the supply of labour, licensure can raise the wages of those who are licensed. But this comes at a social cost by reducing employment, suppressing the wages of non-licensed workers, raising prices, and increasing income inequality. Moreover, there is little evidence that licensure increases either the quality or safety of services.
- Approximately 11 percent of Canadian workers are licensed, and requirements vary significantly by region.
- This bulletin introduces the first comprehensive index of occupational licensing across Canada’s provinces.
- It finds that Alberta, Quebec, and Ontario have the highest licensing burdens, whereas Prince Edward Island and Newfoundland & Labrador license the fewest professions.
- As demonstrated by the case of Alberta, occupational licensure does not strongly correlate with other measures of economic freedom, such as lower taxes and spending.
- By comparing Canadian and US regulatory frameworks, our research highlights how licensing requirements are often arbitrary and fail to serve the best interests of consumers.
Introduction
Occupational licensing makes it illegal for aspiring workers to begin working before obtaining a credential issued by the government. To obtain the credential, workers must often obtain minimum levels of education and training, pass exams, pay fees, and meet additional entry requirements.
Occupational licensing has been studied extensively in the US. A comprehensive summary of the effects of occupational licensing published by the Obama Administration (2015) found that occupational licensing raises prices by as much as 16 percent. Occupational licensing has also been linked with higher wages for licensed workers.
Higher wages may sound like a good thing on the surface. To more carefully evaluate the outcome, it is critical to understand the mechanism for the wage change.
It is possible that occupational licensing is increasing wages by improving the quality of services delivered to consumers. This might lead to increases in demand for licensed workers and thus higher wages (see figure 1). If this is the case, then licensing may confer some benefits to society. Licensing may address a market problem like information asymmetry and thus allow consumers to gain more value from a market exchange (Akerlof, 1970).
Occupational licensing may also increase the wages of professionals by reducing the supply of workers. Figure 2 illustrates this change. Many workers may not be able to complete the required education and training or might find that the time and financial resources that are required create a barrier to entry. If this is the main mechanism for the higher wage, then occupational licensing is creating a cost for society. In effect, licensing reduces the total value from exchange, what economists call “economic surplus” (Friedman, 1962).
Although it is difficult to observe, researchers have examined how licensing affects quality. An excellent summary from the Obama Administration (2015) finds little evidence that licensing improves quality. A more recent published volume from the Upjohn Institute also finds little evidence that licensing improves quality (Kleiner and Koumenta, 2022).
Research suggests that occupational licensing is raising wages primarily by restricting labour supply and is thus primarily imposing costs on society (Kleiner and Soltas, 2023). In addition to its estimated effect on prices and wages, recent studies find that occupational licensing reduces employment (Blair and Chung, 2019), limits opportunities for self-employment (Kukaev and Timmons, 2026), and increases income inequality (Bae, Kleiner, Norris, and Timmons, 2025).
Compared to the US, the effects of occupational licensing have been studied far less in Canada. There is some evidence that occupational licensing is associated with a 15 percent wage premium for licensed professionals (Zhang, 2019). Research also finds that occupational licensing contributes to wage inequality (Zhang and Gunderson, 2020).
Before we can explore and understand occupational licensure specifically in Canada, it is important to draw a distinction between a regulation that confers a “right to practise” and one that confers a “right to title.”
Many regulations in Canada confer exclusive right to practise. Exclusive right to practise aligns with the textbook definition of occupational licensing. Individuals are not permitted to perform the tasks associated with the profession unless they have obtained a licence from the provincial government. To obtain a licence, workers must complete minimum levels of education and/or training, pass exams, and complete additional requirements.
Other regulations in Canada confer exclusive right to title, as opposed to practise. This means that anyone is permitted by law to do the jobs associated with the profession, while it is illegal to use the protected title without obtaining a certificate from the appropriate regulatory body. Obtaining the certificate requires completing similar requirements to obtaining a licence.
In Canada roughly 20 percent of jobs are in regulated occupations (CICIC, n.d.). This figure includes jobs with exclusive right to title and exclusive right to practise. If we focus solely on jobs with exclusive right to practise, regulations that align more closely with occupational licensing regulations, the most recent estimate that most closely matches our methodology suggests that 11 percent of workers in Canada are licensed. This is approximately half of the fraction of workers licensed in the US (Zhang and Gunderson, 2020). A recent working paper relies on self-reported licensing status in a survey of a random sample of Canadians and estimates that 25.1 percent of the labour force is licensed in Canada (Hartley and Kleiner, 2026). It is worth noting, however, that the US is also estimated to have a higher percentage of the labor force that is licensed (28 percent) using the same self-reported method.
Moving forward, we will use licensing to describe a regulated profession with exclusive right to practise in addition to compulsory trades. We will use the term certification to describe a regulated occupation with exclusive right to title.
Measuring licensure in Canada
For the purposes of tracking occupational licensing in the Canadian provinces, we will count the number of licensed job titles. We will provide some information on the use of certification, but it is not the main focus of this analysis.
Another way to measure the extent of licensing would be to calculate the fraction of the labour force in each province that is licensed. We prefer to highlight counts of licensed occupations for several reasons. First, policy makers cannot easily influence the fraction of licensed workers in each province. This fraction will be determined by many factors outside of policy. Counts, on the other hand, are entirely determined by policy. Second, the methodology matches the existing State Occupational Licensing Report (SOLI) report to facilitate comparison (Trudeau, Timmons, and Seevers, 2025). Third, calculating fractions of workers requires additional subjective research judgement. Our preference is to present as objective a measure as possible.
To better understand how occupational licensing requirements compare across provinces, we will follow the methodology of the US State Occupational Licensing Index (SOLI) and produce a Licence Score for each province (Trudeau, Timmons, and Seevers, 2025). Licence score in province will be computed as follows:
Licence scorei = 10 X (Total licences in province i – Total licences in province with fewest licences)
/
(Total licences in province with most licences – Total licences in province with fewest licences)
The licence score will range from 0 to 10. A score of zero will denote the province with the fewest licences. A score of 10 will denote the province with the most licences. Higher scores in general will denote that the province licenses a greater number of job titles relative to other provinces.
We follow the methodology of Zhang (2017) in collecting data on occupational licensing in Canada. Data on licensed occupations was hand collected by reviewing occupational statutes and regulations in each Canadian province. Data on licensing status was matched with four-digit National Occupational Classification (NOC) codes. In this respect, our matching of occupation and regulation differs from the SOLI. The SOLI uses narrower job titles—collecting information on licensing status for 254 unique titles. To better allow for our index to be matched to Canadian data sources, we felt that matching to NOC codes was most appropriate for this index.
We should emphasize that the assignment of licensing status requires human judgement. Each of the authors are highly experienced at reading and interpreting statutory language in occupational licensing. Other readers may reach different conclusions when reviewing statutes. We are confident, however, in our interpretation of the statutes and our classifications.
158 of the 500 four-digit NOC job titles are either licensed or certified in at least one province in Canada. Of these, 104 are subject to occupational licensing in at least one province. The remaining 54 professions are instead subject to certification or right to title protection in at least one province.
Currently, 32 job titles are universally licensed in all 10 provinces. Two of these 32 job titles—airline pilots and air traffic controllers—are regulated at both the federal and provincial levels. Immigration consultants are regulated at the federal level and are thus subject to licensing in all 10 provinces. There are 26 jobs licensed in only one province.
Results
Alberta licenses 73 of the 158 NOC job titles and licenses more professions than any other province. Alberta’s high score in this index is completely the opposite of how the province scores in the Economic Freedom of North America report (Stansel, Torra, Mitchell, and CarriónTavárez, 2025). The Fraser Institute report ranks Alberta as the freest province in Canada. Quebec licenses 67 and receives a score of 8.1, coming in second, and Ontario licenses 62 and receives a score of 62, coming in third. The provinces that license the fewest professions are Prince Edward Island, Newfoundland & Labrador, and Manitoba. Prince Edward Island licenses 41 of the 158 NOC titles—32 fewer titles than Alberta licenses. The average number of occupations licensed across all 10 provinces is 55.
It has been estimated that 11 percent of workers in Canada are subject to occupational licensing. The largest fraction of licensed workers in Canada are in the 32 universally licensed occupations. Nevertheless, measurable differences exist across provinces regarding the fraction of the workforce subject to licensing. Based on national estimates of workers in each NOC code, we can approximate that 13 percent of workers in Alberta are licensed, but only 9 percent of workers in Prince Edward Island are licensed. This is an approximation based on national estimates.
Comparing Canada to the US
Using data from this report, we matched NOC titles to 60 job titles used in the SOLI report. This allows us to perform some comparison and ranking of occupational licensing in Canada and the US combined. For the puposes of comparing occupational licensing within and across Canada, the scores above are more meaningful. The scores above capture licensing differences across a broader number of NOC job titles.
Focusing on this subset, however, we can perform some preliminary comparisons between the US and Canada. Table 2 reports on this comparison.
We caution readers against putting too much confidence in these rankings, given the smaller sample of NOC titles included in this comparison. It would not be appropriate, for example, to equally rank the licensing burden of the District of Columbia, South Dakota, West Virginia, and Wisconsin. If readers are more interested in ranking states in the US, we would encourage them to explore rankings in the State Occupational Licensing Index.
In providing this comparison, however, we can safely say that Alberta, Quebec, and Ontario have high licensing burdens because they show up at the top of the list whether one uses all NOC codes or the smaller subset of NOC codes. Prince Edward Island and Newfoundland & Labrador have low licensing burdens in both calculations.
Another way that we can compare the extent of licensing is to focus on select job titles in the US and Canada. Barbers and estheticians are universally licensed in the US. In Canada, barbers are licensed in only four provinces: Alberta, Manitoba, Ontario, and Nova Scotia. Estheticians are licensed solely in Manitoba. Massage therapists are licensed in 45 of the 50 states. In Canada, massage therapists are licensed in only half of the provinces: British Columbia, Saskatchewan, Ontario, New Brunswick, and Newfoundland & Labrador.
Denturists and opticians are universally licensed in Canada. In the US, denturists and opticians are licensed in only six and 22 states, respectively. Chemists are licensed in Alberta and Quebec, but not licensed in a single US state. Motorcycle and ATV mechanics are licensed in Alberta, British Columbia, and Nova Scotia, but are also not licensed in a single US state.
There are also many examples of similarity. Doctors, dentists, lawyers, and CPAs are universally licensed across the US and Canada. Interior designers and foresters are both licensed in just a handful of provinces and US states.
Certification, or government mandated right to title protection, is much more commonly used in Canada relative to the US. According to the Bureau of Labor Statistics (2026), 2.5 percent of US workers were subject to certification. Certification in Canada is much more commonly used and covers as many as 10 percent of Canadian workers.
Some interesting examples of occupations subject to certification in Canada include dental hygienists, funeral directors, and landscape architects. Each of these occupations is universally licensed rather than certified in the US. Dietitians are also subject to licensing in most states, but are instead subject to certification in Canada.
Portability of Licenses Across Provinces
Because occupational licences are often issued at the provincial level, they are not always portable when Canadians move from one province to another. Research in the US shows that specific restrictions on licence portability reduce mobility by as much as seven percent (Johnson and Kleiner, 2020).
In the European Union, occupational licences are fully portable across member states since the enactment of the Professional Qualifications Directive in 2005 (2005/36/EC) (DG EMPL, 2026).
Several provinces have entered into an agreement similar to the EU. The New West Partnership Trade Agreement (NWPTA) facilitates the movement of licensed workers across the participating provinces: Alberta, British Columbia, Manitoba, and Saskatchewan (New West Partnership, 2016). Alberta, British Columbia, and Saskatchewan fully implemented the agreement in 2013. Manitoba joined in 2016.
Ontario and Quebec also entered into the more limited Ontario-Quebec Trade and Cooperation Agreement in 2016 that covers a subset of licensed job titles (Quebec, 2025).
Last year, the Free Trade and Labour Mobility in Canada Act was adopted, and this removes federal barriers that workers (e.g., land surveyors and locomotive engineers) face (Canada, 2025).
Several provinces also signed memorandums of understanding (MOUs) that made clear that each province signing the MOU will mutually recognize licences from the other provinces. These are similar to reciprocity agreements in the US, but cover all occupations rather than one occupation at a time. New Brunswick agreed to MOUs with Manitoba, Ontario, and Newfoundland & Labrador (New Brunswick, 2021). In addition to New Brunswick, Ontario has agreed to MOUs with five other provinces: Alberta, Manitoba, Nova Scotia, Saskatchewan, and Prince Edward Island (Ontario, 2025).
Another model that has successfully improved licence portability across US states is universal recognition. Universal recognition is a unilateral action on the part of a US state to recognize licences that are in good standing from other states. Specifics on the reform vary across states (Bae and Deyo, 2024), but currently, 28 states and Puerto Rico have implemented some form of this reform (Timmons, 2026).
Policymakers in provinces that currently lack a framework for enhancing licence portability can either explore entering into the NWPTA, pursue bilateral or multilateral MOUs, or they may also pursue unilateral action and choose to accept licences from other provinces that are in good standing.
Conclusion
Occupational licensing imposes significant costs on consumers with little measurable benefits. In this report, we compare the extent of occupational licensing across Canada’s provinces. We find that Alberta, Quebec, and Ontario license the most job titles in Canada. Prince Edward Island licenses the fewest job titles. The gap between the number of job titles licensed by Alberta (73) and Prince Edward Island (41) is large and worthy of further consideration by policy makers.
Some additional observations are in order. Other measures of economic freedom do not necessarily correlate with the extent of occupational licensing in both the US and Canada. Freer provinces like Alberta and Ontario have more licensing than other provinces. This is similar to what we observe for states like Tennessee and Texas who score highly in economic freedom, but more poorly in terms of the extent of occupational licensing.
There are also important policy considerations that emerge when we compare licensing across the US and Canada. Given the costs that occupational licensing imposes, and the fact that notable differences exist in whether licensing is used when comparing US states and Canadian provinces, cross-country comparisons can yield insights on the appropriate regulatory tool. Many Canadian provinces do not license barbers, for example. The risk to consumers from unlicensed barbers is very low. US states should consider reforms given the different regulatory environment in Canada. The same takeaways can be observed when Canada compares several of its licensing regulations to those of the US.
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