Hoping to head off Canada's looming breakup over Quebec's demand for special status, Prime Minister Brian Mulroney has a new plan: give Ottawa stronger constitutional powers to free up trade among the 10 provinces and give Quebec more autonomy on language and education.

No fewer than 500 interprovincial trade barriers, from buy-local provisos to trucking curbs, cost Canada's economy an estimated $6 billion annually. Even New Brunswick's Moosehead beer, widely sold in the U. S., is barred from much of Canada. Such business handicaps are increasingly costly now that Canadian industry faces continental competition under the free-trade pact with the U. S.

If Mulroney's unity drive fails, the pact may have to be renegotiated. Quebec independence would cause "economic disruption," including capital flight and a severe recession, warns Vancouver's Fraser Institute. Despite Quebec's separatist sentiments, such warnings may keep it from following through on its threats to secede.