Friday, August 03, 2007

TILMA: A Saskatchewan Party government could seek agreement with BC-Alberta after April 1, 2009; media reports continue to mislead public

The biased, misleading and slanted reporting continues. In other words, it’s business as usual.

In Sask. won't join Alberta-B.C. trade deal (August 1, 2007), CBC News reported that “TILMA was originally a bone of contention between the NDP government and the Opposition Saskatchewan Party, which had expressed concerns that Saskatchewan might be missing the boat. However, earlier in the summer, Sask. Party Leader Brad Wall said it had thought it over and decided Saskatchewan shouldn’t join the deal.”

What goes unsaid is that for the last 18-months Saskatchewan Party Leader Brad Wall had condemned the Calvert government for not being part of the closed-door negotiations with BC-Alberta and for not immediately signing the agreement. During all that time the Saskatchewan Party raised no concerns about the agreement and made it clear that if elected would join the pact. Only when the problems with TILMA became too obvious to ignore and reached the point where it might become a wedge issue in the next provincial election did the party decide to flip-flop its position using the weak excuse that it was the recent report from the Standing Committee on the Economy hearings into the state of internal trade in Saskatchewan that changed its mind.

According to a June 28, 2007, Saskatchewan Party news release a government under Brad Wall would seek to safeguard perhaps just three areas:

1. The protection of Crown Corporations;
2. The exemption of provincial new growth tax incentives; and
3. The potential loss of new growth tax incentives at the municipal level.

It would seem everything else is expendable. This goes unsaid as well.

In Sask. won't sign trade deal (August 2, 2007), the StarPhoenix once again shamefully cites the widely discredited Conference Board of Canada estimates saying “that signing on would increase Saskatchewan’s gross domestic product by $291 million and increase annual employment by 4,400 person years.”

Detailed analysis exposing the Conference Board’s flawed process can be found online in the following reports:

– Submission by the Canadian Labour Congress to The Standing Committee on the Economy, Saskatchewan Legislative Assembly on TILMA’s Supposed Economic Benefits (June 2007)

John F. Helliwell, Review of Conference Board of Canada’s Report Assessing the Impact of Saskatchewan Joining the BC-Alberta Trade, Investment and Labour Mobility Agreement (January 2007)

The methodology used by the Conference Board to arrive at its Saskatchewan estimates was nearly identical to the one it used in its impact assessment of TILMA for the BC Government in 2005, which was shown to be not credible by Patrick Grady, a former senior official in the federal finance department and also by Erin Weir & Marc Lee in a detailed analysis for the Canadian Centre for Policy Alternatives.

And yet the StarPhoenix continues to cite the Conference Board figures as fact.

The Saskatchewan Chamber of Commerce reportedly expressed disappointment at the government’s decision not to join the accord saying “entering discussions around TILMA would have at least provided the government leverage in difficult AIT negotiations.” The article does not explain how.

At present only BC and Alberta have signed TILMA and both are having problems trying to sell the damn thing at home. That leaves eight provinces and three territories that don’t appear to want any part of the beleaguered trade agreement. It’s difficult to pinpoint where the leverage is here.

According to the article Saskatchewan chamber president Dave Dutchak said the province faces major hurdles because all 13 provinces and territories must be in agreement to make changes to the existing agreement.

“The membership of the provincial chamber is concerned that if the AIT decision-making process is not reformed to some type of majority rule, the government will have little success in its endeavours,” he said in a news release.

TILMA might be no different. There appears to be nothing in the agreement to suggest that changes can be made at later date by majority rule. It seems to be designed as a take or leave it arrangement. Article 20: Accession and Withdrawal spells this out stating “any Canadian province, territory or the Federal Government may accede to this Agreement upon acceptance of its terms.”

In December 2006, BC Premier Gordon Campbell made it clear that Saskatchewan and Ontario were welcome to join TILMA provided no changes were made to the agreement. This was further confirmed on June 6, 2007, when Shawn Robbins, the Director of Internal Trade for the Alberta Department of International and Intergovernmental Relations and Alberta’s chief negotiator on TILMA, made a PowerPoint presentation to Halifax-based conservative think tank Atlantic Institute for Market Studies. On the subject of accession the audience was told: “Parties must accept its terms” and that “Exceptions must be comparable to Alberta’s and B.C.’s.”

TILMA requires mutual consent when adding measures to its list of exemptions. Steven Shrybman of Sack Goldblatt Mitchell describes this in his analysis of TILMA for the Ontario Federation of Labour:
“While additional measures may be added to those exempted under Article 8, that is possible only by mutual consent of the Parties. Thus unless the negotiations authorized under Article 9.2 result in such consent, the protection afforded by listing transitional measures, with the exception of those listed under the heading labour mobility, will expire in April 2009. In effect, TILMA accords both Parties a veto that can be used to prevent the other Party from unilaterally amending or defining the list of measures that it will exempt under the regime, unless that is to simply remove a measure from those listed in Part VI.”
Unless significant changes are made to TILMA it seems that no matter how many provinces or territories sign on mutual consent would still be required.

It is interesting to note that in its June 14, 2007, presentation to the Standing Committee on the Economy the Saskatchewan Chamber of Commerce identified only a few specific areas where concerns appear to exist. They include:

– harmonization of trade regulations (i.e. rules regarding tri-drive tractor units and trailer lift axles).
– businesses registration and workers’ certification
– procurement policies

As for providing a list of “barriers” to trade and investment it appears the Saskatchewan Chamber of Commerce does not have one. In response to a question from committee member Joanne Crofford, Mike Carr, the Co-Chair of the Chamber’s human resources committee said “we want to canvass our members and come back and help create the list.”

The Saskatchewan Chamber of Commerce prefers TILMA, an agreement that goes after everything, as opposed to the AIT which has been shown to be a better avenue for Saskatchewan to take.

In his cross-review of U of S Professor Eric Howe’s analysis of the Conference Board’s Saskatchewan report, UBC Professor John Helliwell wrote: “Saskatchewan, as one of the smaller provinces, has the most to gain by making sure that any and all efforts to expedite interprovincial trade are national in scope, and are implemented through the AIT. To avoid regional Balkanization, any trial moves initiated by pairs of provinces should explicitly be made freely available for all other provinces to join in, and should be designed for this to be easy to achieve.”

Joining TILMA might seem easy but the conditions that provinces and territories must accept in order to do so are simply too harsh to consider.

Helliwell goes on to say “it is necessary that the standards chosen by the TILMA group reflect the preferences of Saskatchewan. In the three-province community of British Columbia, Alberta, and Saskatchewan, it is realistic to think that the agreed standards would be set to match the preferences of the larger provinces, so that any cost reductions are only achieved by accepting the standards of the other provinces. Given the different resource endowments, growth prospects and sometimes political orientations in the three provinces, Saskatchewan would almost surely be better to wait for the greater gains flowing from harmonization at the level of the AIT. National-average preferences are probably more likely than are those of Saskatchewan’s two western neighbours to match provincial hopes and needs.”

The media never mention these things though.

The Saskatchewan Party critic for Western Economic Cooperation, Mike Chisholm, said he believes the NDP government has shut the door permanently on the deal. Let’s hope he’s right.

According to the article “a Saskatchewan Party government could potentially seek to enter an agreement with Alberta and B.C. after the end of TILMA’s two-year transition period, which sees ongoing discussions on areas such as Crowns and municipalities.”

“On the other hand, we had an opportunity three years ago to be at the table when that agreement was drafted, but the government chose not to do that. That was the time when we perhaps could have got these things clarified and perhaps the government would have been in a position to say yes,” Chisholm said.

Voters in the expected fall provincial election should keep in mind the Saskatchewan Party’s June 28, 2007, news release where leader Brad Wall said that his party would not sign TILMA “in its present form.” Chisholm’s comments go a long way to confirm suspicions that if elected the Saskatchewan Party would sign TILMA or something just as destructive.

In his July 2006 MLA Report, Wall recalled a meeting he had with former Alberta Premier Ralph Klein regarding TILMA.

“I informed Premier Klein that although he will soon be stepping down as Premier, that a Saskatchewan Party government would, on a priority basis, get to the table with Alberta and BC,” he said.

Chisholm also appears to be perpetuating the myth that Saskatchewan could and should have been involved in the original TILMA negotiations between BC & Alberta. In reality there appears to be no evidence to suggest that Saskatchewan or any other province was meant to be involved.

The fact is it was British Columbia that first approached Alberta with a proposal to negotiate a comprehensive bi-lateral agreement on trade, investment and labour mobility. On October 8, 2003, the Governments of British Columbia and Alberta signed a joint Protocol of Co-operation, identifying the goal of expanding trade, investment and labour mobility between the two provinces. On May 26, 2004, the two governments signed an Internal Trade Framework Agreement confirmed as the basis for consultations and negotiation of a comprehensive bilateral agreement to enhance trade, investment and labour mobility between the two provinces. These documents and their accompanying news releases do not show that any other provinces or territories would or should participate.

A search for newspaper accounts of these two events yielded only a handful of articles:

Alberta, B.C. forge western alliance, Calgary Herald, October 9, 2003
Of one mind: Provincial accord bodes well, but premiers must stick together, Editorial, Calgary Herald, October 9, 2003
B.C., Alberta forge political bond, Vancouver Sun, October 9, 2003
Alberta, B.C. sign off on eight trade issues, Vancouver Sun, May 27, 2004

None of these articles indicate that any other provinces or territories were invited or should be present.

At the June 4, 2007, Standing Committee on the Economy hearing Saskatchewan Government Relations Minister Harry Van Mulligan described the events leading up to TILMA:
“Ten years on, it was clear to premiers that the AIT, while a very important and useful first step, suffered from some procedural and structural deficiencies. To address those, the premiers’ Council of the Federation adopted an ambitious 17-point internal trade work plan in 2004. The federal government subsequently agreed to this plan. This work plan has since been narrowed to a six-point agenda of priorities including labour mobility, energy, agri-food goods, regulations and standards, business subsidies and dispute settlement.

“One element of the premiers’ internal trade work plan was the identification of so-called gaps in exemptions in the AIT’s scope of coverage and of options for addressing them in ways that could streamline that agreement’s operation. Alberta and BC agreed to be the two lead jurisdictions on that work for the council and federation.

“Internal trade ministers originally asked Alberta and BC to develop two different approaches to this set of issues: a comprehensive approach — which Alberta, BC, and Ottawa supported in principle — and an incremental or issue-specific approach which Saskatchewan and the rest of the provinces and territories preferred. In the end Alberta and BC chose to collapse the two. In September last year they tabled the TILMA, which they had signed four months earlier, as the sole option for internal trade ministers’ consideration.”
Clearly what happened is that BC and Alberta failed to honour the approach that was agreed upon by internal trade ministers and develop “two different approaches.” They instead chose to develop only one then went ahead and signed it, forced it upon their constituents without consultation and have been trying ever since to peddle it to the rest of Canada as the only available option. That it has blown up in their face so badly is their own fault.

The federal government’s influence cannot be ignored either. Conservative Prime Minister Stephen Harper supports what BC-Alberta have done and federal Finance Minister Jim Flaherty has said that “internal trade barriers are on top of his agenda” and that he “has already told provinces to either piggyback onto the Alberta-B.C. deal, as is allowed, or emulate the pact.” [Flaherty wants to tear down trade barriers inside Canada, National Post, July 5, 2007]

TILMA is merely a stepping stone to the larger Security and Prosperity Partnership of North America (SPP) and the “deep integration” agenda that the Harper Conservatives and Canadian Council of Chief Executives have been pushing. Like TILMA, it is a process that has excluded the general public. In conjunction with this is the North America Leaders' Summit taking place August 20-21 at Montebello, Quebec between Stephen Harper of Canada and US President George W. Bush and President Felipe Calderon of Mexico. A 25-kilometre security perimeter is in place and designed to prevent protestors and critics from getting anywhere near the meeting.

The debate over TILMA, or something similar but under a different name, is not over.


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