TILMA: Professor Eric Howe; the potential risk to Aboriginal people and programs, social policy and non-profit organizations in Saskatchewan

University of Saskatchewan economics professor Eric Howe deserves credit for at least being honest. He discloses at the outset of his analysis The Economic Impact of the Trade, Investment and Labour Mobility Agreement (TILMA) on Saskatchewan (January 2007) that “Like most economists, he usually promotes free trade.”

It comes as no surprise then that Howe appears to support the agreement concluding “If Saskatchewan does not sign TILMA, it will forgo an economic opportunity.”

What is surprising, in fact unsettling, is that Howe’s support of TILMA could come at the expense of things he seems to hold dear.

Prepared for the Trade Policy Branch of the Saskatchewan Department of Government Relations, Howe’s twenty-one page assessment devotes ten of those pages to his Curriculum Vitae, or résumé.

Howe’s body of work is extensive and impressive. Among his stated fields of interest is Aboriginal Social Policy Research. Howe has projected that Saskatchewan’s Aboriginal population will reach at least 50 per cent of the province around 2050.

“Saskatchewan has no higher social priority than to increase the extent to which Aboriginal people fully participate in the economic mainstream,” said Howe in an April 13, 2006, Saskatchewan Institute of Public Policy (SIPP) news release promoting his research Saskatchewan with an Aboriginal Majority: Education and Entrepreneurship (April 2006).

In his paper Howe noted “[E]ducational programs are being created at the University of Saskatchewan, as well as other educational institutions such as the Saskatchewan Institute of Applied Science and Technology, the Saskatchewan Indian Institute of Technology, the First Nations University of Canada and the University of Regina. It is notable that the University of Saskatchewan offers more Aboriginal programs than any other university in Canada. Two examples are the Aboriginal First Year Experience Program and the Native Access Program for Nursing.”

“The cost of education is further reduced by federal programs which allow some Registered Indians to attend university without paying tuition,” said Howe.

According to Identifying Potential: Saskatchewan with an Aboriginal Majority (SIPP Newsletter, Spring 2006), “This spring’s Saskatchewan Budget has increased support for Aboriginal students through several initiatives, including in-come support, grants, scholar-ships and bursaries. The 2006 federal Budget included improving education outcomes as one of the objectives for the federal government’s $450 million increase in direct spending on programs and services for Aboriginal peoples across the country, along with improving water supplies and housing on reserve and improving the socioeconomic conditions for Aboriginal women, children and families.”

The rate of unemployment nationally among Aboriginals is reportedly 2.5 times greater than among non-Aboriginals.

In Inching Towards Equality (Planet S Magazine, Mar. 15, 2007), Howe commented on Statistics Canada figures showing employment increased by 23 per cent for Aboriginals—compared to 11 per cent for non-Aboriginals—between 2001 and 2005 saying, “With a continuing development of appropriate social policies, such as the increasing number of educational programs for Aboriginal people, cautious optimism is appropriate.”

Federal and provincial assistance is critical not only to Aboriginal peoples and programs but also for academic research and non-profit organizations. TILMA could eventually put these and many other vital social policies at significant risk.

With this in mind Professor Howe’s support of TILMA is puzzling. It leaves one to speculate whether he considered carefully the extraordinary breadth and depth of the agreement’s reach.

Part V of TILMA (Pages 18-22) lists a number of “Exceptions to the Agreement.” They include, among other things:

– Measures adopted or maintained relating to: Aboriginal peoples; water; regulated rates established for the public good or public interest; social policy, including labour standards and codes; minimum wages; employment insurance; social assistance benefits and worker’s compensation.

– Business subsidy measures adopted or maintained to provide: Compensation to persons for losses resulting from calamities such as diseases or disasters; assistance for book and magazine publishers, sound recordings, and film development, production and distribution; assistance for recreation, academic research or to non-profit organizations.

– Measures adopted or maintained relating to the management and disposal of hazardous and waste materials.

It is interesting to note that health and education are not specifically exempted.

Under TILMA a measure includes any legislation, regulation, standard, directive, requirement, guideline, program, policy, administrative practice or other procedure.

Part V of TILMA is not so much a list of exceptions as it is a hit list of areas the creators and supporters of the agreement intend to eventually target since Article 17 of the agreement requires a Ministerial Committee to “review annually the exceptions listed in Part V with a view to reducing their scope.”

The list of TILMA exceptions is meant to shrink over time not to expand.

The Conference Board of Canada’s (CBoC) impact assessment for the BC Government describes this on Page 14:

“The change in the architecture of the TILMA is considered to be an improvement, in terms of the coverage of the measures included, when compared to the AIT. It is also more transparent since future negotiations can focus on the removal of the exceptions from the explicit exclusion list. However, the approach also presents some risks since it requires that the signing Parties have a full understanding of all measures that are included in the TILMA.”

(The CBoC’s recent impact assessment of TILMA for Saskatchewan Government Relations does not contain this ominous warning.)

A February 2007, TILMA brochure by Alberta International, Intergovernmental and Aboriginal Relations confirms the CBoC analysis saying “Ongoing efforts continue to reduce exceptions and ensure broad and comprehensive coverage, and to encourage other provinces and the federal government to join the TILMA.”

Lastly, according to the Fraser Institute, an organization that despises exceptions, “The TILMA is not a perfect agreement. Part V of the agreement lists exceptions for both parties, as well as exceptions for the two individual provinces…Thankfully, however, both governments have already committed to reducing these exceptions.” (Fraser Forum July/August 2006)

It’s funny, you don’t read about exceptions being added to the agreement only removed.

Also, when promoting TILMA in speeches and news releases provincial representatives Colin Hansen, BC Minister of Economic Development and Guy Boutilier, Alberta Minister of International, Intergovernmental and Aboriginal Relations seem to avoid mentioning the true intent of Article 17 when talking about exceptions. The same can be said for the Canadian Federation of Independent Business, the Saskatchewan Party and countless other TILMA supporters. It’s something they don’t seen to want to draw attention to.

The Conference Board of Canada does not like exceptions. They view them as barriers that should be limited or removed altogether. This comes through loud and clear when discussing either TILMA or the current Agreement on Internal Trade (AIT) that came into force in 1995.

In An Impact Assessment of the BC/Alberta Trade, Investment and Labour Mobility Agreement (September 2005) the CBoC states on Page 12:

“There are many exceptions and transitional provisions embodied in the legal text of the AIT which makes the Agreement quite difficult to implement. These exceptions include those for regional development objectives, environmental protection, consumer protection and labour standards as well as those for aboriginal peoples, culture, national security, taxation and financial services.”

In Assessing the Impact of Saskatchewan joining the BC-Alberta Trade, Investment and Labour Mobility Agreement (December 2006) the CBoC states on Pages 8:

“While the objective of the AIT is for the federal, provincial and territorial governments to work together to reduce and eliminate barriers to the free movement of persons, goods, services and investment within Canada, the capacity of the agreement is limited by its numerous exemptions and the ambiguity of some provisions…Some important activities or subjects are also completely exempt from the AIT’s coverage, such as financial services, regional development programs, aboriginal people, cultural matters, national security and taxation.”

TILMA’s objectives are clear with blunt language used to get its purpose across.

The agreement’s Operating Principles require Parties to “ELIMINATE barriers that restrict or impair trade, investment or labour mobility.”

Article 3 requires “No Obstacles” and compels each Party to “ensure that its measures do not operate to restrict or impair trade between or through the territory of the Parties, or investment or labour mobility between the Parties.”

Article 5.3 requires Parties “not establish new standards or regulations that operate to restrict or impair trade, investment or labour mobility.”

Article 20 notes “Further to Article 1800 (Trade Enhancement Agreements) of the Agreement on Internal Trade, any Canadian province, territory or the Federal Government may accede to this Agreement upon acceptance of its terms.”

Article 22 requires Parties “to jointly advocate for the removal of any Federal Government measures that operate to restrict, impair or distort trade, investment and labour mobility between the Parties.”

That the Federal Government is mentioned is not an accident.

As mentioned earlier a February 2007, TILMA brochure by Alberta International, Intergovernmental and Aboriginal Relations reported “Ongoing efforts continue to...encourage other provinces and the federal government to join the TILMA.”

In a speech to the Lloydminster Chamber of Commerce on April 5, 2007, Alberta Premier Ed Stelmach said “we have already had informal discussions with other jurisdictions about lowering trade barriers — including, Saskatchewan, Ontario, the federal government, and Yukon.”

In the Budget 2007 delivered by Finance Minister Jim Flaherty on March 19, 2007, the federal government’s support of TILMA was unequivocal:

“In April 2006, the Governments of Alberta and British Columbia signed the Trade, Investment and Labour Mobility Agreement (TILMA), a wide-ranging internal trade deal that will make it much easier for goods, investments and skilled workers to move between these two provinces. This agreement, the most comprehensive of its type in Canadian history, has created significant momentum. The federal government is committed to building on this momentum and will work with interested provinces and territories to examine how the TILMA provisions could be applied more broadly to reduce interprovincial barriers to trade and labour mobility across the country.”

In Harper promises increased Asia-Pacific Gateway spending (Vancouver Sun, May 4, 2007) Conservative Prime Minister Stephen Harper hailed the B.C.-Alberta trade, investment and labour mobility agreement which came into effect April 1, 2007:

“This is a bold step that has been undertaken by two forward-looking provinces committed to successfully competing in global markets, and I believe their success will set an example other provinces will find hard to resist,” Harper told an audience at the Asia-Pacific Gateway and Corridor Initiative International Conference at the Pan Pacific Hotel in Vancouver.

The federal and provincial governments, as Professor Howe knows, provide funding for many social and academic programs for thousands of Canadians including aboriginals and non-profit organizations. The impact of TILMA on these areas could be devastating.

Proponents of TILMA lead people to believe that Aboriginal peoples, social policies, education and the environment are exempt from the agreement but as the Council of Canadians succinctly put it “The greatest strength of the case against TILMA is that it is entirely based on the wording of the agreement itself.”

In effect TILMA is its own worst enemy.

It is interesting to note that TILMA mentions health and health services, social policy and education but does not define them. It does, however, make damn sure that definitions for business subsidy, enterprise, government entity, investment, investor, measure, regulation and standard are provided.

Incredibly, in his assessment for the Saskatchewan Government, Professor Howe devotes just a mere two sentences to describe the negative impact TILMA would have on the province:

“The disadvantage of signing TILMA is reduced sovereignty. TILMA will restrict some abilities of provincial and local governments to enact certain laws and requires that some regulations be standardized across the signing provinces.”

With all due respect to Mr. Howe one cannot help but wonder how closely he read the TILMA or the impact assessments prepared by the Conference Board of Canada for the BC and Saskatchewan governments.

Howe goes on to say “there is very little discussion of future social policies for Saskatchewan that will be prohibited by signing TILMA. In the absence of such discussion of anticipated future social policies, it is nearly impossible to objectively quantify what the social disadvantage of signing TILMA will be.”

“Moreover, existing [non tariff barriers] NTB’s are extremely heterogeneous in nature. It is difficult to know how signing TILMA will affect current government policies.”

The agreement’s Operating Principles combined with Articles 3, 5, 17, 20, 22 and Part V of TILMA should give a good indication of what TILMA’s future impact on current government policies could be.

There was no public consultation or debate in British Columbia or Alberta prior to TILMA’s signing on April 28, 2006. Discussions to objectively quantify what the social disadvantage of signing TILMA would be in those provinces did not occur and have yet to take place in Saskatchewan yet Howe seems to support TILMA regardless.

“The advantages of Saskatchewan signing the TILMA are mostly in terms of economic growth and improved material standards of living for provincial residents,” said Howe.

“We don’t want to get this wrong. We need to weigh the tradeoff between the social advantages and disadvantages.”

At this juncture the social advantages to signing TILMA appear to be slim to none. The potential disadvantages, however, appear to be enormous.

According to the BC Ministry of Small Business and Economic Development 2003/04 Annual Service Plan Report it was at British Columbia’s request that Alberta agreed “to negotiate a comprehensive bi-lateral agreement on trade, investment and labour mobility.”

In Provinces unite to tackle skill shortages (Vancouver Sun, December 14, 2006) BC Premier Gordon Campbell said Saskatchewan and Ontario were welcome to join TILMA “provided they don't try to tinker with the deal.”

It’s clear that the exceptions listed in TILMA are meant to decrease. It is difficult to imagine BC and Alberta agreeing to any significant amendments or concessions to the agreement that would entail a more permanent safeguard of social policies including health and education programs.

If Professor Howe feels otherwise it would be interesting to hear his views.