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The Progressive Economics Forum

Premiers on Labour Mobility and Internal Trade

Regarding the Premiers’ announcement in Quebec City last week, I would reiterate what I wrote a year ago about a very similar federal proclamation by then-Minister of Industry, Maxime Bernier. The main piece of real news is that Premiers have attached financial penalties to the existing Agreement on Internal Trade (AIT):

Premiers announced an enhanced and effective dispute resolution mechanism to enforce AIT dispute panel recommendations in government-to-government disputes. Effective January 1, 2009, the strengthened mechanism includes the use of monetary penalties ranging from a maximum of $250,000 for the smallest provinces and territories to a maximum of $5 million for the largest.

The governments of Saskatchewan and the Yukon explicitly rejected the Trade, Investment and Labour Mobility Agreement (TILMA). The governments of Ontario and the Atlantic provinces publicly considered this deal and quietly decided not to join. The main reason for steering clear of TILMA was that its dispute-resolution mechanism gives private interests too much latitude to directly challenge public policy. Citizens of these provinces should ask their Premiers why they agreed to inject TILMA’s most objectionable element into the existing AIT.

Of course, the amended AIT is not as bad as TILMA. The AIT is less open-ended and somewhat more focussed on areas where inter-provincial frictions might conceivably exist. The graduated system of fines will have less of a “chilling effect” than TILMA’s $5-million fines in small jurisdictions. These fines will only apply to government-to-government disputes, which means that private interests will have to convince at least one government that their case has merit before launching a challenge. Progressives must remain vigilant to ensure that this enforcement regime is not extended to all disputes.

On Monday, The National Post ran yet another editorial encouraging Premiers to crack down on supposed inter-provincial barriers. It specifically claimed that pharmacists lack inter-provincial mobility. However, a letter printed in Tuesday’s Post from Dr. Barry Graham of Mississauga explains that pharmacists may easily work in any province but Quebec, as long as they can pass a test on the province’s drug plan.

Similarly, lawyers can practice in any province by passing a bar exam to demonstrate sufficient knowledge of the province’s jurisprudence. These procedures seem like reasonable requirements, not excessive “barriers” to labour mobility.

In today’s Post, I have the following letter on supposed inter-provincial trade barriers:

 


Our economy’s real challenges

National Post
Wednesday, July 23, 2008
Page: A15
Section: Letters 

Re: Free Trade, From Sea So Sea, editorial, July 21.

Your editorial argues, “one of the reasons Canada’s economic growth since 1994 has relied almost entirely on expanded opportunities in the United States is that, in many cases, it is now easier for Canadian companies to trade with the Americans than with counterparts in other provinces.”

True, during the 1990s, a falling Canadian dollar and a growing U. S. economy increased exports from Canada to the United States. However, from 2000 through 2007, exports to the United States fell by 1% while inter-provincial exports rose by 39%. These figures do not support the notion of “obstacles to interprovincial trade.” The real challenges now facing our economy are an overvalued Canadian dollar and a weakening U. S. market.

Erin Weir, economist, United Steelworkers, Toronto.    

 

 

 

 

 

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