Wall gov’t reneges on offer to provide comprehensive list of barriers to trade and investment between Saskatchewan, Alberta and British Columbia

Prior to the signing of the New West Partnership between Saskatchewan, Alberta and British Columbia on April 30, 2010, in Regina, the Council of Canadians initiated an email campaign asking the public to write to Saskatchewan Premier Brad Wall and Deputy Premier Ken Krawetz to demand the release of the full text of the agreement and hold a legislative review and full public consultations before they consider signing on to the partnership.

The premier responded with a form letter dated May 13, 2010, thanking those that wrote for taking the time to raise their concerns.

In the letter, Wall said the agreement “will create Canada’s largest interprovincial barrier-free trade and investment market.” This was followed by the outright lie that his government “has been fully transparent on the New West Partnership,” and the half-truth, that subsequent to the TILMA hearings in 2007 (or, as Wall calls them, “the broad legislative multi-party consultations on regional trade”), two key concerns were then identified: protecting the public ownership of Crown Corporations and retaining the ability of municipalities to encourage economic development.

For the past five years right wing politicians, think tanks and business lobby groups have inundated Canadians with apocalyptic rhetoric that the country’s economy and competitiveness is suffocating under a blanket of interprovincial trade barriers too numerous to count.

In July 2004, the Canadian Chamber of Commerce, a national lobby group that speaks for more than 175,000 businesses, embarked on a mission to survey its members to identify barriers to trade. The goal was to forward the results to provincial and territorial governments to assist in their efforts in implementing the Agreement on Internal Trade (AIT), an intergovernmental trade agreement signed by Canadian First Ministers that came into force in 1995.

“Unfortunately the AIT has not been fully implemented and numerous barriers to trade exist within Canada,” the Chamber claimed in the survey questionnaire sent to members. “Internal trade barriers increase the costs to both businesses and consumers and negatively impact the competitiveness of the Canadian economy.”

The final report released in November 2004 shows the exercise was a total disaster.

Out of the tens of thousands of businesses that likely received the survey only 106 bothered to respond. Of those, just 37 companies said they experienced barriers to trade within Canada, seven of which said they “worked with the provincial or territorial government to resolve the barrier.”

The abysmal response might have been worse had the Chamber not coached members along by including in the survey seven “examples” of barriers then asking them if they’d experienced any.

Despite the poor results, the Chamber’s then president and CEO Nancy Hughes Anthony publicly stated: “What our members told us is that they face a plethora of barriers.” [B.C., Alberta are leading the way (Windsor Star, April 26, 2007)]

In May 2006, the Conference Board of Canada published the report Death by a Thousand Paper Cuts that examines the extent of the barriers to competition in Canada and their impact on productivity.

The Conference Board claims Canada has a “bewildering array” of internal trade barriers yet only identifies two examples: Quebec prohibition of margarine from having the same colour as butter and Ontario’s restriction making it illegal to manufacture and sell products that resemble a dairy product if those products combine edible oils.

The Conference Board admits “little research” has been done on interprovincial barriers but is convinced they exist “in all sectors of the economy.” They acknowledge, “No comprehensive listing of these barriers seems to exist” then lamely suggest this is because “their sheer numbers present a daunting obstacle to any attempt to compile a full list.”

Incidentally, in July 2008, the Quebec government lifted the ban on coloured margarine and on July 22, 2010, in Toronto, a summary panel conducted a hearing under the dispute resolution provisions of the AIT to review the Ontario case.

TILMA and New West Partnership supporters will now have beat the bushes to scare up another example of a genuine interprovincial trade barrier.

In a web-exclusive commentary to the Globe and Mail on May 1, 2010, BC Premier Gordon Campbell, Saskatchewan Premier Brad Wall and Alberta Premier Ed Stelmach said “it is critical that we break down unnecessary barriers between our provinces.”

“We cannot afford to allow internal borders to stifle opportunity or permit antiquated ways of thinking to continue to impede our ability to move forward with new ideas with new partners,” they said.

Through the New West Partnership the three provinces will enhance the competitiveness of the region “by removing barriers to trade, investment and labour mobility.” [We are stronger as one than if we stand apart (Globe and Mail, May 1, 2010)]

As usual, no list of barriers was produced.

With that in mind a letter was sent to Premier Brad Wall on May 18, 2010, asking him to provide separate comprehensive lists of the barriers to trade and investment that currently exist between Saskatchewan, Alberta and British Columbia.

Wall replied three weeks later, but only to say that an access to information request had to be submitted.

The subsequent request to Executive Council resulted in a phone call from Garett Murray, the manager of corporate planning at central management services with the Ministry of Municipal Affairs, on June 28, 2010, to discuss the matter. The central management services branch provides support to intergovernmental affairs through a shared services agreement.

Murray advised that there is no one document containing a comprehensive list of barriers to trade and investment between the three westernmost provinces, but proposed that the provincial government would create a new record that had the information. It was further agreed that such a record would also contain the source for each barrier listed.

Unfortunately, the Wall government reneged on the offer without explaining why.

In a letter dated July 22, 2010, Bonita Cairns, the executive director of corporate services with Executive Council, provided a one-page record prepared by intergovernmental affairs staff listing five “general examples” of barriers to trade and investment that currently exist between the three westernmost provinces.

“A comprehensive list of barriers does not currently exist,” the document states. “To implement Article 5 of the trade component of the New West Partnership, i.e., to mutually recognize or otherwise reconcile differences in standards and regulations that operate to impair trade, investment and labour mobility, the three governments will be compiling a comprehensive list of all existing differences.”

The “general examples” of trade barriers include: differences in commercial vehicle registration rules; differences in labour mobility rules for financial services professionals such as insurance agents and mortgage brokers; differences in procurement rules for ministries, Crown corporations, municipalities, health regions, school divisions, universities and colleges; differences in business registration; and, differences in reporting requirements.

It appears all the Wall government did was expand on what is stated in the New West Partnership Trade Agreement implementation schedule shown on page four of a provincial government backgrounder released on April 30, 2010.

What’s good about the new record is that it exposes the absurdity of the three governments signing such an intrusive, heavy handed trade agreement without first identifying the alleged barriers to trade, investment and labour mobility it was created to eliminate. Perhaps this was done to avoid having to answer questions had the list been compiled before the agreement was signed.

Besides confirming that no list of barriers exists, the document also shows that, like TILMA, the New West Partnership is primarily an attack on standards and regulations – not bona fide trade barriers. The Wall government – in lock-step with business groups and conservative think tanks – is falsely claiming that differences in public interest regulation amount to “trade barriers.”

Economists Marc Lee and Erin Weir point out in their study, The Myth of Interprovincial Trade Barriers and TILMA’s Alleged Economic Benefits (February 2007), that most serious studies conclude that there are few significant obstacles to trade and investment within Canada. There are no customs inspection stations along provincial borders, nor any kind of tariffs on interprovincial trade. Canadians use the same currency and share common legal, financial and economic institutions. Canadians are free to live and work anywhere in the country. The federal government has constitutional power over interprovincial trade and the courts have consistently struck down attempts by provincial governments to obstruct it.

“What corporate Canada calls “trade barriers” are in fact differences across provinces in government procurement systems, labour standards, consumer-protection measures, environmental regulations, and taxes,” Lee and Weir explain. “Harmonizing these policies down to the lowest common denominator would certainly reduce the cost of doing business. However, the alleged trade distortions resulting from these differences, and the supposed public benefits of removing them, have been greatly exaggerated. Genuine trade barriers are quite small and exist in only a few areas.”

It seems like the average Canadian is more apt to spot a UFO or run into Bigfoot than encounter a legitimate trade barrier.

By signing the New West Partnership, Premier Brad Wall has committed Saskatchewan to adopting or recognizing standards that might be lower than its own.

According to the April 30 backgrounder Alberta and British Columbia already “fully comply with the agreement.” Saskatchewan has until July 1, 2012, to mutually recognize or otherwise reconcile differences in regulations and standards that restrict or impair trade, investment or labour mobility.

An undated question and answer document released by the Wall government on May 25, 2010, through an access to information request notes that: “The New West Partnership supersedes TILMA. In practice, obligations for Alberta and British Columbia do not change under the New West Partnership Trade Agreement.”

A March 10, 2010, briefing note prepared by intergovernmental affairs staff indicates that one of the main obligations in the agreement for Saskatchewan is to essentially agree not to discriminate against its western neighbours. For example: “recognize Alberta and British Columbia standards and regulations as our own.”

What if those standards and regulations are lower than Saskatchewan’s?

The three governments deny that the agreement will result in provinces adopting the lowest common denominator when it comes to standards and regulations. They say that the agreement requires them work toward the enhancement of sustainable development, consumer and environmental protection, and health, safety and labour standards and the effectiveness of any such measures.

In theory, the New West Partnership could result in some higher standards being adopted. However, if Alberta and British Columbia already comply with the agreement why would they adopt a tougher Saskatchewan standard? Mutual recognition means there could be up to three sets of different standards and regulations putting regulators in competition with each other. How long will regulators put up with that nightmare scenario?

Despite claims to the contrary, the Wall government has not been “fully transparent” on the New West Partnership. Executive Council has denied several access to information requests.

▪ On March 2, 2010, access was denied to copies of any briefing notes regarding the Western Economic Partnership (now the New West Partnership) since October 1, 2009.

▪ On April 21, 2009, access was denied to copies of any agendas, minutes, reports, briefing notes, memorandums or letters, including attachments, regarding the trilateral cabinet meeting that took place on March 13, 2009, in Vancouver. It was at this meeting that the three governments agreed to enter into an economic partnership. Access to any agreements or memorandums of understanding that were signed at the meeting was also turned down.

▪ On October 22, 2009, access was denied to copies of the two most recent draft versions of the Western Economic Partnership Agreement (now the New West Partnership).

And when Wall says that following the June 2007 TILMA hearings “two key concerns were then identified: protecting the public ownership of Crown Corporations and retaining the ability of municipalities to encourage economic development,” what he’s not telling people is that those were the only concerns the Saskatchewan Party would listen to. All the other concerns raised at the hearings were ignored.

And finally, just so there is no mistaking how close the new agreement resembles TILMA is the following passage from a fact sheet posted on the Government of Alberta website: “Built on the groundbreaking success of the Trade, Investment and Labour Mobility Agreement (TILMA) between Alberta and British Columbia, the NWPTA extends Alberta and British Columbia’s commitments to include a new partner, Saskatchewan. The trade obligations under the NWPTA remain the same as those made under the TILMA, but they now apply across the three western provinces.”

Maybe now the Wall government will stop trying to distance itself from TILMA.