TILMA: City of Edmonton report validates “race to the bottom” concern

A recent letter to the Alberta government from the City of Edmonton appears to validate many of the concerns raised by opponents of the Trade, Investment and Labour Mobility Agreement (TILMA) – concerns which business groups, conservative think tanks, the media and the BC/Alberta governments have routinely condemned as alarmist and fear mongering.

At its July 11, 2007, meeting the City of Edmonton’s executive committee considered the following report from its Corporate Services Department: 2007COF065.

The report provides information outlining the process and timelines for discussions with the Province on the British Columbia/Alberta Trade Investment and Labour Mobility Agreement.

According to the report the province has met with City of Edmonton representatives to discuss TILMA on at least two occasions: June 12 & June 19, 2007.

The report noted:

“It is apparent that the Province has not yet established a final position with respect to TILMA and the Municipalities, Academic Institutions, Schools and Hospitals (MASH) sector. However, they have scheduled a series of meetings with stakeholders in the MASH sector to receive and consider issues and concerns prior to negotiations with British Columbia to be held later this fall.”

As a follow-up the City of Edmonton forwarded a list of concerns and comments on the TILMA Agreement in advance of the negotiations.

The June 28, 2007, letter by Roger Rosychuk, the City of Edmonton’s finance manager, to Shawn Robbins, the Director of Internal Trade for the Province of Alberta identified numerous areas of concern. Among them are:

Article 3: No Obstacles

“It is essential that municipalities retain the ability to license and regulate business to meet Legitimate Objectives. We are concerned that current and potentially, future municipal bylaws and regulations will be ruled “off-side” with respect to TILMA, such as: Placing limitations on the number of businesses in a market sector; Requiring businesses in a market sector to install specific equipment or software; Prohibiting the sale and use of certain types or classes of products. Clarification is required to ensure that TILMA will not restrict municipal powers under the Municipal Government Act (in particular ss. 7 and 8) as the types of measures as described above may be considered trade restrictive.”

Article 4: Non-Discrimination

“Edmonton has a tiered system of business licensing fees; one fee for Edmonton businesses and a higher fee for out-of-town businesses. Clarification is required to ensure that this Article does not affect municipal bylaws and the municipality’s powers to enact them.”

Article 5: Standards and Regulations

“There is concern that Standards and Regulations will be reduced to the lowest common denominator. It would help if wording could be included in TILMA stating that there will be no reduction of results, performance, or competence during the Standards and Regulation reconciliation process.”

Article 11: Investment

“The provisions of this Article may be construed to limit municipal powers to enact business licensing bylaws. This should be clarified to ensure that the municipality’s powers in this regard are not impaired.”

Article 12: Business Subsidies

“This provision restricts the ability of the parties to provide business subsidies. Municipalities may provide grants, loans, or tax incentives to certain entities if it benefits the municipality. This provision should be clarified to ensure that the municipality’s powers to do so are not restricted in any way.”

Article 13: Labour Mobility

“This provision should be clarified to ensure that where there are two standards, the more stringent or higher standard should be the one that is accepted by both Parties.”

Article 14: Procurement

“At $10,000, the TILMA tender threshold for goods is too low.”

“Under current construction market conditions, the AIT and TILMA thresholds for construction purchases ($250,000 and $100,000 respectfully) are so low that it essentially means that all construction purchases will be tendered.”

“There is concern that that we will be required to post to multiple tendering systems, such as the Alberta Purchasing Connection, BC-Bids, Coolnet Alberta, Coolnet Edmonton, Coolnet BC. Could the Parties commit to developing a single electronic tendering system?”

“There is no evidence to suggest that purchase price reductions generated by the potential of increased competition of distant suppliers will offset our additional operating costs. Will consideration be given to compensating municipalities for additional costs to implement and operate at the lowered TILMA tendering thresholds?”

“Sub section 4 considers the implementation of a bid protest mechanism. This is a particularly troubling concept because bid protests mechanisms always prevent work from proceeding until the protest is resolved. We believe there are sufficient legal remedies in place to allow unsuccessful bidders to seek redress through the courts if they feel they have been improperly treated during the tender-call and contract award process. The MASH Sector should be exempted from this provision.”

“Purchases by municipalities from municipally owned utilities should be exempted from the tender-call provisions of TILMA. It is not practicable for Edmonton to consider tendering for electrical energy and services because EPCOR is a City owned corporation.”

Articles 17 & 18: Ministerial Committee and Committee Structure and Procedures

“MASH Sector representation should be included at the Ministerial Committee.”

Article 21: Further Negotiations

“MASH Sector representation should be included at the time of further negotiations.”

DISPUTE RESOLUTION PROCEDURES

“Articles 24 to 32 should be clarified to outline how the dispute resolution procedure will be applied to municipalities. These Articles should also explain the degree of municipal participation in dispute proceedings. In the event that the implementation of a Disputes Panel ruling causes the municipality to incur additional costs, the municipality should be able to opt-out or, alternatively, the Province should provide compensation.”

Article 32: Costs and Remuneration

“The Province should assume all MASH Sector costs for Panel Proceedings.”

Business Subsidies

“Sub-section 1c, Assistance for Recreation, should be clarified. Does this include subsidies for professional and semi-professional athletes or teams?”

Government Procurement

“Notwithstanding comments made under Article 14, Sub-section 2, Registered Professionals should be exempted from TILMA tender-call provisions.”

According to the meeting minutes the recommendation that the June 28, 2007, Corporate Services Department report 2007COF065 be received for information was carried.