TILMA: A re-elected Conservative Government led by Stephen Harper would force a deal on provinces and territories by 2010

The Conservative Party of Canada 2008 election platform released Oct. 7, 2008, shows that a re-elected Harper government intends to ramp up its fight with provinces and, if necessary, force them to bend to its will on internal trade by 2010.

Under the title Breaking Down Trade Barriers within Canada page 16 of the Conservative platform states:

“A re-elected Conservative Government led by Stephen Harper will work to eliminate barriers that restrict or impair trade, investment or labour mobility between provinces and territories by 2010. In 2007, the government announced that it was prepared to use the federal trade and commerce power to strengthen the Canadian economic union. Since that time, we have seen progress among the provinces and territories in strengthening the existing Agreement on Internal Trade. We hope to see further progress, but are prepared to intervene by exercising federal authority if barriers to trade, investment and mobility remain by 2010.”

As usual no detailed list of these so-called barriers is provided.

The reference to the 2007 government announcement is the Speech from the Throne that was delivered on Oct. 16, 2007. On the matter of bullying the provinces to fall in line the Harper government said:

“Our Government will also pursue the federal government’s rightful leadership in strengthening Canada’s economic union. Despite the globalization of markets, Canada still has a long way to go to establish free trade among our provinces. It is often harder to move goods and services across provincial boundaries than across our international borders. This hurts our competitive position but, more importantly, it is just not the way a country should work. Our Government will consider how to use the federal trade and commerce power to make our economic union work better for Canadians.”

The Budget 2007 delivered by Conservative Finance Minister Jim Flaherty on Mar. 19, 2007, contains a number of seemingly benign references to TILMA but on closer inspection reveals a government determined to put private profits permanently ahead of the public interest.

Chapter 5 of Budget 2007 states:

“Budget 2007 takes action on creating an Entrepreneurial Advantage in Canada by...Committing to work with interested provinces/territories to examine how the Alberta-British Columbia Trade, Investment and Labour Mobility Agreement could be applied more broadly. This will help build our economic union and promote the free flow of people and goods within Canada.”

“A more competitive domestic market will better prepare Canadian businesses for further success in the global economy. Artificial barriers to labour mobility can make it difficult for firms to find the skilled labour they need. Other impediments to internal trade can raise business costs and reduce competition. Reducing internal trade barriers will benefit us all through greater product and service choice, lower prices and higher economic growth.

“All governments within Canada can contribute to a stronger domestic market. 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.”

“...developing a more comprehensive trade and investment relationship with our closest trading partner, the United States, is key to the success of Canadian business. For more than 60 years, we have been able to rely on our trade relationship with the world's largest, most dynamic economy. We continue to benefit from this relationship, yet we must recognize that new players are challenging us in our traditional market. The Global Commerce Strategy will address this challenge by reinforcing our U.S. presence and implementing new initiatives such as the direct engagement of private sector experts in order to connect Canadian companies with new opportunities and attract investment.”

“At the heart of the Government's strategy is the adoption of a new Cabinet Directive on Streamlining Regulation that will come into effect on April 1, 2007...To meet the Government's Advantage Canada commitment to a new modern approach to regulation and improved efficiency and effectiveness, Budget 2007 provides $9 million over two years to implement this initiative.”

Prior to that, on November 23, 2006, Flaherty released “a long-term, national economic plan” called Advantage Canada: Building a Strong Economy for Canadians. Page 39 of the plan states:

“All governments within Canada have a responsibility to allow our internal market to operate as freely as possible. In that regard, encouraging progress has been made recently. The governments of Alberta and British Columbia have signed a comprehensive agreement that could significantly enhance the movement of goods, services and capital between these two provinces.”

The plan made the following policy commitment:

“The Government intends to foster a stronger Canadian economic union by continuing to engage with the provinces and territories to enhance internal trade and labour mobility and create a common securities regulator, and by encouraging the provinces to move ahead with the harmonization of sales taxes with the GST.”

The Conservative Party’s 2006 election platform was subtler than its 2004 platform stating that “A Conservative government will:

“Support the creation of practical intergovernmental mechanisms to facilitate provincial involvement in areas of federal jurisdiction where provincial jurisdiction is affected, and enshrine these practices in a Charter of Open Federalism. We will work with the provinces in areas such as culture, environment, and trade, within the context of the Constitution. Specifically, we will:

“Support the important contribution the Council of the Federation is making to strengthening intergovernmental and interprovincial cooperation, expanding the economic and social union in Canada, and advancing the development of common standards and objectives of mutual recognition by all provinces.” (p. 42)

The Conservative Party of Canada 2004 election platform was forthright and in the voters faces stating:

“A Conservative government will renegotiate the Agreement on Internal Trade to end provincial exclusions, create a prompt and binding dispute settlement process, and allow greater mobility for workers. If voluntary agreement cannot be achieved, we will use the Constitution to ensure that trade among the provinces is at least as free as trade with the United States and Mexico under NAFTA.” (p. 15)

Make no mistake a government led by Stephen Harper will eventually force its will onto provinces. Should Harper win look for Saskatchewan Party Premier Brad Wall to move quickly on negotiating a TILMA-like deal with Alberta using the excuse it’s better to do it now than being forced to later.