Friday, May 18, 2007

TILMA: Saskatoon StarPhoenix editorial board lacks credibility, adopts Saskatchewan Party hypocrisy

In TILMA gives clout to Sask. (SP May 15) the StarPhoenix editorial board does an admirable job of scuttling its own credibility and adopting Saskatchewan Party-style hypocrisy along the way.

The editorial states:
The Calvert government deserves congratulations for establishing a committee to study TILMA and should be encouraged to push for Saskatchewan's inclusion as soon as possible.
The StarPhoenix congratulates the Calvert government for establishing a committee to study TILMA yet pre-determines the outcome saying the province should sign the agreement as soon as possible. This line of thinking robs the committee’s public hearings and final report of any credibility. The genuineness of the StarPhoenix’s support for the committee rings hollow at best.

It appears the StarPhoenix shares the same hypocrisy as Saskatchewan Party Leader Brad Wall who in the legislature on April 2, 2007, criticized NDP Premier Lorne Calvert saying “Why is he only starting consultations now?”

Wall went on to call the Premier’s plan “inadequate” and said “will he at least ensure that the consultations are done by an all-party standing committee of this legislature?”

This would be the same Brad Wall that on May 1, 2006, in the legislature and in a news release ridiculed and condemned the Premier for not being at the table with BC and Alberta during their closed-door negotiations – a process that ignored public and legislative debate – and criticized the Premier for not dutifully signing the agreement.

Both the Saskatchewan Party and StarPhoenix lack credibility.

The StarPhoenix editorial states:
TILMA increasingly is becoming a political football for the usual anti-trade and protectionist suspects. They see the deal as an extension of an American plot to take over this country, an instrument to sell off Canada's water and a "race to the bottom" precipitated by businesses who would do away with labour laws, unions, social legislation and environmental rules through litigation and backroom deals.
BC Premier Gordon Campbell and former Alberta Premier Ralph Klein made TILMA a political football when it signed the agreement on April 28, 2006, without any public consultation or legislative debate.

The StarPhoenix conveniently ignores the fact that concerns with TILMA have been raised by the City of Saskatoon Solicitor’s Office, the Saskatchewan Urban Municipalities Association, the City of Yellowknife, the City of Burnaby, the City of Coquitlam, the District of Kent, the British Columbia School Trustees Association and to some extent the City of Edmonton. No doubt more will follow.

While the StarPhoenix is more than willing to accept without reservation the so-called expert opinion of the Conference Board of Canada as dependable and trustworthy it rejects out-of-hand the carefully researched work conducted by the Canadian Centre for Policy Alternatives, the Council of Canadians, Marc Lee, Erin Weir, Ellen Gould and Steven Shrybman. This is despite the fact that the survey and methodology used in the impact assessments prepared by the Conference Board for the BC and Saskatchewan governments were deeply flawed and have been thoroughly discredited. This does not seem to stop the Saskatchewan Party or StarPhoenix, though, from shamefully citing its findings.

It is also interesting to note that on April 3, 2007, the Edmonton Journal editorial board said there is “little in the way of genuine trade barriers remaining between the two westernmost provinces,” and Saskatchewan Party Leader Brad Wall in a news release said Saskatchewan has “fewer trade barriers and restrictions than either B.C. or Alberta.”

The StarPhoenix scoffs at the “race to the bottom” theory but provides no evidence to support its inference that TILMA would not harm labour laws, social legislation or environmental rules.

Where the critics of TILMA attempt to provide evidence to support their arguments the StarPhoenix provides none, only name-calling in an attempt to frame the entire issue as one of business vs. union.

The “race to the bottom” scenario was well presented by Steven Shrybman of Sack Goldblatt Mitchell LLP in his independent analysis of TILMA for the Ontario Federation of Labour.

In his report Shrybman states:

“[I]t is reasonable to expect significant pressure to reconcile such measures in favour of a lower common denominator of government regulation, because in many ways TILMA is by intent, design and structure no more than an instrument for de-regulation - after all, the entire regime is based on the premise that government regulation is the problem.

“The pressure that TILMA creates to reduce regulatory standards to the lowest common denominator was recently described by the Executive Vice-President of the Canadian Institute of Chartered Accountants in testimony before the Standing Senate Committee on Banking, Trade and Commerce:

“Although we support the merits of trying to enhance labour mobility, we bring to your attention the important need to recognize that provisions such as article 13.1 of TILMA could lead inevitably to the risk that standards of qualification for professionals are thereby reduced to the lowest level prevailing in the country.

“As provincial standards for regulation of professions are not uniform to begin with, this provision essentially makes the lowest of the standards that may exist in Canada acceptable as the base of qualification — essentially a race to the bottom, if you will. We do not believe that this is consistent with the obligation of legislators and governments nor of the professions themselves to ensure that the public is protected.

“Given the broad prohibition on regulatory intervention set out by Articles 3 and 5.3, it is inevitable that various efforts for reconciling or harmonizing provincial standards will create real pressure to reduce standards and regulations to the lowest common denominator, or abandon them altogether. If further evidence of TILMA’s deregulatory intent is needed, it can be found in the fact that it fails to incorporate AIT provisions intended to moderate the “race to the bottom” effect of trade liberalization.”

The local media ignores this.

The StarPhoenix editorial states:
Saskatchewan could be perpetually disadvantaged if the scaremongers already among us have their way.
In its report Saskatchewan’s Internal Trade at a Glance (April 2007), Saskatchewan Government Relations notes, “Empirically, Canada ’s and the West’s internal trade growth and their overall economic growth have mirrored each other - some economists cite this as evidence that few impediments to internal trade exist in Canada.”

“According to the OECD, Canada is amongst the most ‘open’ of all industrialized countries, both in terms of its international trade and in terms of its domestic economic and administrative regulatory ‘restrictiveness,’” the report states.

Furthermore, within Canada, Saskatchewan is currently the second most export-oriented province in Canada; and, the second most ‘open’ province to internal trade in Canada.

Finally, Government Relations states, “While SK’s average (and current) productivity level is lower than its main internal trade partners (i.e. ON, AB, BC, QC), with the sole exception of Manitoba, its productivity growth rate has recently exceeded both the national and western rates: that is, SK’s faster productivity growth rate is already closing the ‘gap’ in levels.”

In his analysis Steven Shrybman states:

“As most Canadians will readily recognize, Canada is a free society in which they are free to live, work and invest anywhere in the country. There are no customs stations along provincial borders and no tariffs of any kind on interprovincial trade. Moreover, inter-provincial trade is a federal responsibility and provincial measures that interfere even indirectly with such trade have been consistently struck down by the courts.

“Nevertheless, the Conference Board of Canada has produced two recent reports promoting the TILMA cause. Neither report offers substantive empirical evidence that significant and unwarranted barriers to internal trade and investment actually exist in Canada. While certain provincial procurement rules and subsidy programs still favour local contractors and hiring practices, most of the examples cited by the reports concern the remnants of international trade, investment and services measures that have survived free trade, such as foreign ownership limits for Canadian broadcasting companies. Few, if any, of these examples are relevant to Canada’s internal market.”

In a province that is said to be booming this hardly seems to depict one that is disadvantaged and at risk of slipping into an abyss.

The StarPhoenix editorial states:
TILMA's success is based on the notion of including everything unless there's a darn good reason to leave out a sector. And those exceptions are rare.
TILMA’s exceptions include measures 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; 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; the management and disposal of hazardous and waste materials; and the management or conservation of forests, fish and wildlife.

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

Article 17 of TILMA requires a Ministerial Committee to “review annually the exceptions listed…with a view to reducing their scope.”

This means the list of exceptions will shrink over time eventually exposing them to the full force of the agreement. In fact, a February 2007 TILMA publication ominously states “ongoing efforts continue to reduce exceptions.”

An October 2006 TILMA fact sheet states “if a measure is not clearly identified as an exception, it is subject to the rules of the agreement.”

Since health and education measures are not clearly identified as exceptions, it would seem they too could be at risk.

Proponents of TILMA like the StarPhoenix, Saskatchewan Party, Canadian Federation of Independent Business, Canada West Foundation and Fraser Institute never seem to mention these things, though.

The StarPhoenix editorial states:
As University of Saskatchewan economist Eric Howe notes in a recent report on TILMA's economic potential…“If Saskatchewan does not sign TILMA, it will forgo an economic opportunity.”
According to UBC economist Dr. John Helliwell, whose critique of Dr. Eric Howe’s report for the Saskatchewan government has been completely ignored by the StarPhoenix and Saskatchewan Party, “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.”

Helliwell goes on to say “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.”

“[T]he size of the cost reductions likely to be made available by TILMA are so small as to make it essentially costless to use whatever leverage Saskatchewan may have to improve the AIT rather than join TILMA,” Helliwell said.

The StarPhoenix editorial states:
As Howe says: “If Saskatchewan decides to not sign TILMA, it will tend to further the isolation of our businesses and make them more insular relative to their competitors to the west.”
In his report Howe also said “We don’t want to get this wrong. We need to weigh the tradeoff between the social advantages and disadvantages.”

Howe’s report does not do that. In fact, Howe inexplicably devotes just two measly sentences to describe the trade agreement’s negative impact: “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.”

“[T]here 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,” Howe said.

Those discussions have not taken place in Saskatchewan. They certainly did not happen in British Columbia and Alberta where TILMA was signed without public consultation or legislative debate.

Howe says non-tariff barriers are extremely heterogeneous in nature. “It is difficult to know how signing TILMA will affect current government policies,” he said.

The absence of such information did not seem to deter Howe, though, from concluding that Saskatchewan must join TILMA anyway.

Unfortunately, Howe appears to have fallen into a trap similar to that of the StarPhoenix and Saskatchewan Party. He cites the need for further debate but has pre-determined the outcome suggesting Saskatchewan must sign the agreement regardless of what the impact might be, what the public might think or whether enough quality information has been gathered to make an informed decision.

The StarPhoenix editorial states:
TILMA is too important to become a political football. With other provinces already clambering to join, Saskatchewan has to decide whether our twinned highways are to be used to connect us to the modern world or serve as a faster way to pass us by.
Which provinces are “clambering” to join? The StarPhoenix names two – Saskatchewan and Ontario. The former is leery and deservedly so while Ontario has shown little sign of wanting to engage the public in consultation or have legislative debate. A lot of the “clambering” appears to be coming from business lobby groups and conservative think tanks like the Canadian Chamber of Commerce, The Fraser Institute, C.D. Howe Institute and Atlantic Institute for Market Studies.

It is too late to stop TILMA from becoming a political football. The CanWest family of conservative, pro-business newspapers in western Canada in conjunction with the governments of British Columbia and Alberta along with the Saskatchewan Party and federal government, through its Budget 2007 comments in support TILMA, has already allowed that to happen.