BC municipalities reject TILMA

This week in Vancouver, the annual meetings of the Union of BC Municipalities are talking TILMA. The BC government signed the deal without consulting municipalities, and it is now in effect. Over the next two years, however, municipalities have an opportunity to seek exemptions from the agreement, although their appeals would go to Economic Development Minister Colin Hansen who would then have to negotiate on their behalf with his Alberta counterpart. If no deal is reached, the full force of TILMA would apply to municipalities, and in the interim they are to behave as if it does.

Needless to say, lots of municipalities are unhappy with this intrusion into their policy-making space. On Monday, Minister Hansen – who has been denying that the deal will have any consequences while insisting miraculous economic benefits – spoke to a workshop of municipal councillors and mayors. Municipalities have now done their own legal analyses of the pitfalls of TILMA’s investor (and other) provisions, and based on this, the word is that Hansen left the room with his tail between his legs.(*)

Below is a copy of the resolution that was passed by the UBCM almost unanimously today, and a summary of the Monday workshop by Caelie Frampton of the Council of Canadians (reposted from this site):

Whereas the provincial governments of British Columbia and Alberta have entered into a Trade, Investment and Labour Mobility Agreement (TILMA), which came into effect on April 1, 2007 and which is intended to liberalize trade, investment and labour mobility beyond the level provided by the Agreement on Internal Trade that was brought into effect for British Columbia on March 31, 2002;

AND WHEREAS TILMA has the potential to have far reaching negative impacts on local government objectives:

THEREFORE BE IT RESOLVED that the Union of BC Municipalities review the Trade, Investment and Labour Mobility Agreement between British Columbia and Alberta, and enter into discussions with the provincial government and local governments, with the intent of either making changes to the agreement to more specifically address local government concerns, exempt local governments from the agreement, or request that the Province withdraw from the agreement altogether.

Highlights from UBCM pre-conference TILMA Session, Monday Sept 24:

On Monday September 24, 2007 the UBCM hosted a TILMA pre-conference session to address the UBCM member’s concerns with TILMA. The Minister for Economic Development Colin Hansen and three bureaucrats responsible for TILMA presented the case for the province’s backing of TILMA. Lawyer Don Lidstone was present to represent the UBCM’s concerns with TILMA. Approximately 200 delegates attended this information session which resulted in a lively discussion about TILMA and ultimately in the question coming from several attendees “Why not exempt us [municipalities]?”

… Issues of concern raised by local governments were supported by UBCM lawyer Don Lidstone and included thresholds for purchasing, restrictions on the ability of local governments to give out subsidies and grants, and potential obstructions to local initiatives to protect the environment. Councilors also raised concerns about the vague and undefined nature of TILMA, the lack of precedent around dispute panel decisions, and mixed messages from the government about the Agreement.

The Minister’s responses did not leave councilors feeling confident about the Agreement’s impacts on municipalities. On several occasions answers from the Minister directly conflicted with Lidstone’s, and as one councilor put it, “I don’t know who to believe, a politician or a lawyer!” The conflicting messages about the potential effect the Agreement could have on municipalities sent a strong message to participants that only a permanent exemption from the Agreement can protect local governments.

“What is the need for this Agreement?” – BC Councilor at UBCM TILMA Session

Conflicting Messages on TILMA’s Impact on Municipalities

Hansen repeatedly stated in the session that the Ministry has yet to identify a provision from local governments that will be in contravention to the Agreement. He also claimed that the impact of TILMA on municipalities will not be great.

However, as one councilor pointed out the changes to the threshold levels alone under TILMA are “unworkable”. As one councilor stated the $10,000 threshold for procurement “will break us” in terms of the extra work it will create for municipal staff. Instead of talking about thresholds as an option for negotiation with the UBCM, Hansen responded that these levels benefit tax payers and that this is the best value for them. He also encouraged municipalities to make good use of software made available to them, to expedite the tendering process.

Several councilors outlined the importance for their communities in passing resolutions that prioritized their ability to make decisions that directly benefit their communities. These included decisions that reflect public policy and ethical decisions before the bottom line. Questions from councils also highlighted the focus for local governments on sustainable and ecologically friends municipal decisions in light of climate change. Lidstone confirmed that local resolutions/decisions such as Vancouver’s ethical purchasing policy these would “run afoul of TILMA”. Lidstone also raised concerns for the 37 local governments in BC that promote buying locally.

Vagueness of the Agreement, Lack of Precedent

One councilor asked about precedent and the intent of TILMA in knowing that “precedent is what its all about” when it comes to court decisions- including under the private court system that is set up under TILMA. Another asked if the Minister was willing to amend the language in the Agreement to clarify the recognition of need for “even handedness” versus the implications of ‘mutual recognition’ in reference to preserving local choice.

Hansen claims that the provincial government can issue interpretations on the Agreement at any point and time. However, in terms of making special provisions he stated that “as the province we are going to push back a little to make sure this [the Agreement] falls in the right place”.

Dispute Panel Process

Lidstone reminded people in the room that municipalities do not get to defend their own measures should they be challenged by an investor at the dispute resolution panel. He also stated that there may be “pressure put on you to change your measure” and that the government “could over rule your measure”.

Hansen attempted to reassure attendees about the dispute panel process by reminding municipal leaders that he had “hand selected” the 5 panelists for the dispute resolution panel, who are appointed for indeterminate terms. This did not leave the room feeling reassured about that process nor its openness. The idea that Hansen hand selected people who would be charged with interpreting the vague language of the Agreement did not sit well with for municipal leaders.

When asked to clarify what party would be responsible for monetary fines should the dispute panel rule in favour of the investor, Hansen reiterated that the province was responsible for the fine. However, Lidstone also stated that the government has yet to ensure local governments that the province will not then go after local governments for any compensation the province is forced to pay, which prompted much rumbling in the room. Lidstone repeatedly stated in the session that while the government had not stated that it would go after local governments for repayment, “the government has yet to state that it will not”

* PS. Colin Hansen does not actually have a tail.


  • Run away from this TILMA “thing” and don’t look back!

  • Patricia Russell

    Regarding the HST: This would represent the BC Government’s second half of the strategy they’ve been busy implementing to give with one hand and take all AND MORE back with two hands, in order to be able to raise enough money to make it through these trying times. I wish it were that easy for me and others of us who have suffered the recession by being under/un-employed and struggling to pay our bills.
    The HST prospect brings to mind certain scenarios which really and truly make my blood boil:
    – we will now pay an additional 7% tax on the reviled carbon tax every time we gas up. Don’t give us lectures on how we should get out of our cars – some of us live in places like Maple Ridge and Langely and thanks to Translink our transportation is woefully lacking.
    – there will now be an additional 7% tax levied on second hand goods for which tax has already been paid at least once if not twice if not three times over.
    – small businesses struggling to stay competitive will feel compelled to eat the 7% on services AND goods they sell. I can safely say that in this sub-sector of business there will be a retraction as a result of the HST but of course this will not be highlighted in any government statistics!
    — P. Russell, Maple Ridge

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