Saskatchewan and TILMA

Today, the Government of Saskatchewan initiated a process of legislative consultations on TILMA and released the Conference Board’s assessment of this agreement’s potential impact on Saskatchewan. This document is the sequel to the Conference Board’s BC assessment, which Marc and I critiqued on this blog and in our paper.

I have not yet read through the 55-page document, but will provide some initial impressions. The Conference Board has retained its matrix of industries and regions, but dropped its GDP-impact scale in favour of simply treating the final “score” as a percentage of GDP. This “methodology” is still completely arbitrary, but produces appreciably less extreme results. Whereas the Board projected gains equal to 3.8% of GDP and 78,000 jobs for BC, it projects 0.92% of GDP and 4,400 jobs for Saskatchewan. These Saskatchewan estimates are still unbelievably high, but also so dramatically different from the BC estimates as to constitute a repudiation of the Conference Board’s previous work.

Interestingly, the provincial government has released the Conference Board’s document in conjunction with other materials. Brian Copeland’s excellent paper, which Marc and I cited and which used to only exist in hardcopy, is now available online. The government has also provided reviews of the Conference Board’s assessment by two academic economists, Dr. John Helliwell and Dr. Eric Howe.

The following are some key quotes from pages 6 and 7 of Helliwell’s piece:

“The principal source of data for the paper was a survey that asked representatives of firms, organizations and government agencies and departments to list what they thought to be the most important barriers to inter-provincial trade in their company, region or industry, and then provide qualitative rankings of winners and losers by region and industry. The latter were then converted to measures of long-term changes in income and employment by Conference Board staff. Since there was no research or quantitative base for this translation, it has no empirical basis, and hence cannot be treated as evidence. . . . In my view, this is an inappropriate use of the survey instrument, akin to estimating national GDP by asking households how they think everyone else is doing these days. . . . there is no empirical support for the Conference Board estimates of GDP and employment changes.”

2 comments

  • Further to Erin’s comments, on page 4 Helliwell notes:

    “The most important feature of TILMA in [respect to increasing mobility and reducing subsidies] is to forbid providing any enterprise subsidy that results in a material injury to a competing entreprise of another party. To take an example not in the short list of explicit exemptions, this apparently means that a professional football franchise in one province could launch an objection, subject to binding panel arbitration, against the government of a city in another province if they were to provide government subsidized infrastructure for the local team. This perhaps takes the concept of a level playing field further than the parties intended. In general, the combination of unrestricted private access to the dispute mechanisms combined with a commitment to neutrality of treatment, would make almost any provincial or municipal programme subject to attack. This is no doubt part of the appeal of TILMA to some. However, using expensive legal procedures to advance particular private interests is surely not the best way of provinding a non-intrusive and efficient network of trade-supporting public rules and institutions.”

  • Larry Hubich, President of the Saskatchewan Federation of Labour, has an entertaining take on the quote highlighted by Marc:

    http://larryhubich.blogspot.com/2007/04/sign-tilma-kiss-riders-good-bye.html

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