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The Progressive Economics Forum

Saskatchewan Rejects TILMA . . . Again

Saskatchewan’s new Premier, Brad Wall, addressed the Petroleum Club in Calgary on Monday to emphasize his willingness to continue giving away his province’s oil reserves for scandalously low royalties. Several media outlets reported that he also expressed interest in joining TILMA, which he had previously rejected. For example, The Globe and Mail reported, “He mentioned his desire to become part of a pact that now includes Alberta and British Columbia that is aimed at removing interprovincial trade barriers.”

In the following story, “New gov’t turfs TILMA,” Wall’s Minister of Enterprise and Innovation set the record straight. Fittingly, this article was printed in The Meridian Booster of Lloydminster, which straddles the Saskatchewan-Alberta border.

The Saskatchewan Party’s instinct was clearly to embrace TILMA. Wall was apparently happy to indulge this instinct before an out-of-province business audience. Today’s story confirms that his party still clings to the notion that TILMA is flawed only because Saskatchewan was absent from the initial negotiations. However, it also confirms that the Saskatchewan Party correctly perceives serious problems with, and opposition to, the deal.

New gov’t turfs TILMA

The Meridian Booster

Wednesday, January 23, 2008

Page: A1

Section: News

Byline: Christopher Heffernan

The new Saskatchewan Party government has indicated it will not enter a controversial trade deal with Alberta and British Columbia, saying it is not willing to put the province’s Crown corporations at risk.

The Trade Investment and Labour Mobility Agreement (TILMA) was rejected by the previous NDP administration last summer on the grounds that it left too many unanswered questions. The new administration has upheld the decision, saying Saskatchewan has missed the boat on TILMA and it’s too late for the province to renegotiate.

“We’re revisiting the idea of reducing and removing trade barriers between the Western provinces, but with TILMA we’re late in the game,” said Lyle Stewart, minister of enterprise and innovation. “A number of parameters are set and among those we’re concerned about a couple of things.”

Among their worries is the threat TILMA poses Crown corporations. While formally protected under the agreement, there are concerns the Crowns could be attacked through various legal loopholes. For instance, TILMA allows an individual or corporation to sue any government entity – including municipalities, school boards, or Crown corporations – that it believes are impeding its ability to do business.

The agreement also explicitly prohibits the use of government subsidies, which would prevent provincial and municipal governments from offering investment and growth incentives to support local industries.

“Those are deal-killers for us,” said Stewart, adding the agreement could have better represented Saskatchewan’s interests had the former government been at the table during its negotiation.

“I don’t see us signing onto the deal unless there’s some willingness to re-negotiate it from the ground up, and I don’t see that.”

This is not good enough for business groups who want to see Saskatchewan join its neighbours in creating the country’s largest single market. No where is enthusiasm for the agreement stronger than among Lloydminster’s business community, which deals day in and day out with the red tape of inter-provincial regulations.

“I find it so silly that we talk about free trade and international trade but here in Canada, between the provinces, we have some of the largest barriers,” said Glenn Fagnan, president of the Lloydminster Chamber of Commerce.

On Feb. 12, the chamber will be proposing a resolution on TILMA to its members. If passed, it will be sent to the Saskatchewan government urging them to sign the agreement.

The main irritants for local businesses include the costs of dual-licensing for professionals in both provinces, different building codes and workplace safety regulations, trucking weights, dimensions, and licensing requirements, and restrictions on the inter-provincial movement of meat, dairy products, and eggs for resale.

Stewart says these are “mostly minor irritants” but admits that added together, they can impede the ability of businesses to be productive and competitive. He says he would like to work with other provinces to lower trade barriers outside of TILMA. However, he confirms that no formal discussions have yet been planned with any other provinces.

Comments

Comment from Gary Schoenfeldt
Time: January 23, 2008, 8:10 pm

Mr. Fagnan incredibly claims that some interprovincial trade is frustrated by barriers greater than what exist at international borders. What a monumental exaggeration! You’d think that we had border guards and customs agents at the borders between the provinces. The last time I checked those facilities were operating across international boundaries, along with duties and tariffs, prohibitions on certain imports and exports, to say nothing about regulations upon regulations upon regulations. Where is Lloydminster located anyway? It sounds like it straddles some fictional reproduction of the Berlin Wall!

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