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The Progressive Economics Forum

Internal Trade Hypocrisy?

Murray Campbell’s excellent column in today’s Globe and Mail (excerpted below) accurately portrays the current state of play on the interprovincial trade front, including Steven Shrybman’s constitutional challenge of TILMA in Alberta and BC, Saskatchewan’s continued rejection of TILMA, the Quebec-Ontario negotiations and corporate Canada’s unrelenting push for new powers. One can only hope that the Globe editorial board reads its own newspaper.

While Murray Campbell appropriately questions corporate Canada’s inability to formulate a list of interprovincial barriers, the Premiers who have been shrillest in denouncing such barriers have recently unveiled some new ones.

Several North American jurisdictions will be putting a price on carbon emissions through the Western Climate Initiative (WCI). They will also have to find ways to apply this price to the carbon content of imports from jurisdictions that do not price it. In particular, BC will apparently be imposing a tariff on imports of coal-fired electricity from Alberta. One wonders whether this measure is TILMA-compliant.

By most accounts, Jean Charest initiated the current Quebec-Ontario negotiations. But earlier this month, his government trumpeted a requirement that new wind farms incur at least 60% of their costs in Quebec. This sort of preferential provincial procurement is one of the few tangible examples of alleged trade impediments within Canada.

Gordon Campbell and Jean Charest present themselves as champions of the struggle against supposed interprovincial barriers. It’s interesting that both have now found apparently compelling public-policy rationales to enact measures that could restrict economic flows from other provinces.

Ontario, Quebec: Just say no to TILMA

The Globe And Mail

Saturday, May 24, 2008

Page: A13

Byline: Murray Campbell

. . .

The agreements unveiled June 2 in Quebec City will likely deal with certification and other credential issues and that’s harmless enough. But the pursuit of the “expanded accord” that the premiers want has only begun and many in the hardy band of people who monitor trade issues in Canada believe, like Elmer Fudd, that “there’s something scwewy going on around here.”

Their fear is that Ontario and Quebec are pursuing something similar to the Trade, Investment and Labour Mobility Agreement that British Columbia and Alberta struck in 2006 and which will take effect next spring. Critics charge that this TILMA deal is a Trojan horse pushed by businesses to restrict the regulatory powers of provincial and municipal governments. They point to a “general rule” of the deal that there should be “no obstacles” to freer trade and the right it gives businesses to sue governments for up to $5-million “on any matter” involving the interpretation or application of the deal.

The quasi-judicial tribunal to hear disputes is one reason why lawyer Steven Shrybman concluded this week that TILMA and the B.C. legislation enabling it violate the Canadian Constitution by usurping the role of judges and endowing cabinet with too much power. He wrote his brief for the Canadian Union of Public Employees but it’s worth nothing that the right-wing Saskatchewan Party has also taken a pass on joining the pact despite the invitation from Alberta Premier Ed Stelmach.

TILMA isn’t on the table in Quebec City but that doesn’t mean the pressure for it (or something similar) has eased. The business community is still urging a new mechanism to supersede the 14-year-old Agreement on Internal Trade. AIT has reduced the barriers to labour mobility but businesses say it is ineffective because it doesn’t have a binding dispute-resolution mechanism like TILMA. For example, a national coalition of 10 industry and professional organizations wants to allow individuals or businesses to challenge the decisions of elected governments before tribunals whose authority is beyond a government or the judicial system.

The business case is weakened, however, because it hasn’t produced a list of the barriers that need to be eliminated. Their claim, with no supporting data, is that restrictions take $3-billion off the GNP. (Mr. Stelmach says it’s $14- billion.) To her credit, Ontario Economic Development Minister Sandra Pupatello says there’s a lot of “political rhetoric” about trade barriers that doesn’t withstand scrutiny.

The smart thing for the premiers to do is to take a pass on TILMA and simply work a little harder on their bilateral irritations. They should resist the pressure to hand over power to unelected tribunals.

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