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Would you be surprised if you woke up one morning to find that your provincial government had signed away many of its rights to govern, including the right to have economic development programs?  Would it shock you if the government also signed away the right of towns and cities to regulate on behalf of their citizens, including zoning?

This is what residents of British Columbia and Alberta woke up to in April 2006.  It is what people in Saskatchewan, Manitoba and Ontario may wake up to if their provinces sign on to the British Columbia/Alberta Trade, Investment and Labour Mobility Agreement (TILMA).

The trade and investment provisions of the agreement contain elements that go far beyond those found in the North American Free Trade Agreement (NAFTA).   
How far does the deal go?  The Canada West Foundation’s Todd Hirsch told the Winnipeg Free Press that for all intents and purposes, TILMA erased “the provincial boundary for all purposes except voting and the colour of the license plate.”

The agreement’s language is explicit. The parties want to eliminate measures that restrict trade or investment. TILMA covers more than just provincial rules: local governments, school boards, colleges, universities, health institutions and social services are all included in the deal.  

While municipal governments are not covered by the agreement until 2009, TILMA says that during the transition period, local governments cannot change or even “renew” any measures that don’t conform to the agreement.  

Business subsidies are verboten.  Regional economic development measures are permitted only in “exceptional circumstances” and only if they do not distort investment.  Joint federal-provincial grants to business under programs like the Atlantic Canada Opportunities Agency and the Western Economic Diversification program would probably not be permitted.  Ontario’s support for automakers would also be banned.

Almost any local government action will be open to challenge.  For example, an investor might decide a zoning change had “restricted” her right to investment.  Ethical purchasing programs will be out of the question.
Labour mobility provisions will result in a leveling down of (standards A province will have to justify that higher standards are “legitimate” and any difference will only be permitted if less restrictive options were not available. It has been almost impossible to meet this test in the international agreements TILMA copies.

Corporations that think their rights have been infringed on can bring claims under the agreement.  Penalties for infractions are harsh – up to $5 million.   

TILMA’s economic benefits are wildly exaggerated.  They are based on Fraser Institute estimates made before Canadian provinces signed an interprovincial trade deal in the 1990s.  Many economists suggest resulting savings will be small. 

The deal does give corporations the whip hand in getting rid of regulations they don’t like.  What sort of things is being described as trade barriers?  A May 2006 Conference Board report lists the following:

  • Fire marshal regulations are stricter, and they are constantly monitored in Ontario.  We don’t believe this is the case in Quebec, and this presents an uneven playing field.”
  • An organization in the professional, scientific and technical sector felt that Alberta’s Occupational Health and Safety Act placed undue financial pressure on the company.”  (While some labour measures are exempted by TILMA, health and safety is not among them.)
  • The respondent was also concerned about the province’s proposed ‘ticketing’ act which would discriminate against employers in the province.  If an employer decided to fire a worker without two weeks’ notice, the employer would still be required to compensate that employee for two weeks of pay.”

When the only difference between provinces is the “colour of the license plate,” provinces and municipalities will not have the right to create new laws and regulations to meet the needs of their citizens.  Many of the differences between provinces reflect different realities and legitimate decisions made to serve citizens.  They are not trade barriers: they are democratic choices.

Canadians should have a say in decisions that fundamentally change not only the political reality of their governments but the balance of power between corporations and those governments.  British Columbians and Albertans should demand public hearings on this agreement.  People in other provinces considering TILMA should demand a higher standard of democracy than our two western provinces are willing to allow.