Everyone’s favourite non-issue came up again at last week’s First Minister’s meeting. The outcome of two amendments to the Agreement on Internal Trade was another bit of “progress”, I suppose (see backgrounder below). As usual, the release offers no details on actual trade barriers that are presumed to exist in Canada. With the long-standing margarine case settled as of last year, and this being essentially the only bona fide example of a trade barrier in existence, the premiers must have been searching high and low for other barriers that they could eliminate.
I take it they could not find any because, in the usual fashion, the topic quickly changed to labour mobility, which is, of course, not trade. The existing AIT has actually done a good job of settling outstanding labour mobility issues, so I’m not sure what this amendment gets us. I’m not opposed to such provisions but it seems to me that the only area that still has some contention to it is accountants. If anything there is a danger that we have allowed a process where the lowest standard in the country is acceptable everywhere.
Given that there are no trade barriers to be resolved, the second amendment was to allow for penalties to be imposed for violations of the agreement. At a maximum of $5 million a pop, this hardly seems like much of a deterrent anyway. That said, this is not aimed at trade but differnces in provincial regulations that might pose additional costs to businesses (which is different from actual impediments to trade). I do not like the precedent of penalties being paid for having, for example, strong environmental standards, although the langauge of the AIT is quite balanced in terms of weighing the need for local differences in regulation, unlike the BC-Alberta TILMA.
The final part of the release suggests three outstanding areas to resolve:inclusion of an energy chapter; completion of a broader agriculture chapter; and reconciliation of regulations in the transportation sector.
The energy chapter is really about a longstanding dispute between Newfoundland and Quebec, where NF wants to sell power to the US but has to go through Quebec, who is not letting them. This is not likely to be resolved at the AIT table.
The second relates to provincial differences in meat inspection, although there is already a solution to this as there already is federal inspection process.
Finally, in transportation this is all about trucking and whether provinces like BC should have the same standards for its mountainous roads as its flat neighbours in Alberta and Saskatchewan. If harmonized downwards this “solution” will be revoked once the first truck flies off the rails into Kicking Horse Canyon in eastern BC.
16 January 2009Ottawa, OntarioPrime Minister Stephen Harper and Canada’s Premiers and Territorial Leaders signed a new Agreement on Internal Trade (AIT) during the First Ministers’ Meeting on the economy.
This agreement contains two key amendments to the existing AIT and marks a significant milestone toward eliminating internal trade barriers and enhancing labour mobility in Canada.
This new agreement is the latest example of the federal Government’s commitment to work with the provinces and territories to enhance the economic union of Canada. The Government of Canada commends Canada’s Provincial and Territorial leaders for their economic leadership.
Today, it is more important than ever to ensure that we have a strong and efficient internal system of trade, particularly in the current economic environment. Stronger internal trade will help Canadian workers in businesses of all regions, improve Canada’s competitiveness and productivity, lower costs and attract more foreign investment.
Improved labour mobility will help ensure that Canadian workers’ credentials are recognized across provincial and territorial boundaries. The Prime Minister and Premiers have also agreed to a tangible dispute resolution mechanism and new incentives for compliance.
The specific changes to the AIT are as follows:
Ninth Protocol of Amendment: Labour Mobility (Chapter 7)
Canadians should be able to work in their chosen occupations anywhere in Canada. The revised labour Mobility Chapter of the AIT will provide that any worker certified for an occupation by a regulatory authority of one province or territory is to be certified for that occupation by all others.
Any exception to full labour market mobility will have to be clearly identified and justified as necessary to meet a legitimate objective, such as the protection of public health or safety.
The Committee on Internal Trade has approved, in principle, that all Canadians will enjoy full labour mobility by April 1, 2009.
Tenth Protocol of Amendment: Dispute Resolution Mechanism (Chapter 17)
The revised government-to-government dispute resolution mechanism of the AIT will, among other things, provide for monetary penalties of up to $5M for the largest jurisdictions for continued non-compliance with AIT obligations.
These amendments will also significantly strengthen enforcement mechanisms. As a result there will be a more effective compliance and appeals process, including the possibility of monetary penalties and suspension of dispute resolution privileges.
Signatories must obtain ratification from their respective governments for these amendments to take effect. This process is already underway.
About the Agreement on Internal Trade
On July 1, 1995, Canada’s First Ministers signed the AIT to eliminate barriers to commerce and labour mobility within Canada. The AIT continues to evolve to meet the changing needs of business. It requires ongoing negotiations and adjustments in order to further liberalize trade throughout the Canadian economy.
In August 2007, at a Council of the Federation meeting, the Premiers agreed to strengthen the AIT through a five-point action plan related to:
full labour mobility; stronger dispute resolution, including monetary penalties; inclusion of an energy chapter; completion of a broader agriculture chapter; and reconciliation of regulations in the transportation sector.
The Government of Canada continues to work closely with all provinces and territories toward implementing this action plan with the goal of improving the AIT for the benefit of all Canadians.
- TPP: Renegotiating NAFTA, By the Back Door (September 22nd, 2015)
- Primer on Investor-State Dispute Settlement (March 16th, 2015)
- The Troubled Economics, and the Curious Politics, of the Canada-Korea Trade Deal (October 17th, 2014)
- Who’s afraid of free trade with Europe? (September 25th, 2014)
- Free Traders Panic Over German Challenge to Investor-State Dispute-Settlement (July 30th, 2014)