The opposition critic for inter­governmental affairs is questioning the impact of a wide-ranging B.C.–Alberta free-trade agreement due to take effect on April 1, 2007.
B.C. premier Gordon Campbell and Alberta premier Ralph Klein signed the Trade, Investment and Labour Mobility Agreement at a joint B.C.–Alberta cabinet meeting held in Edmonton on April 28.
New Democrat Michael Sather, the MLA for Maple Ridge–Pitt Meadows, says the 39-page agreement, aimed at eliminating barriers that “restrict or impair trade, investment or labour mobility” between the two provinces, can be expected to reduce standards in many areas.
“If you’re going to go with a higher standard, then that likely wouldn’t increase cross-border mobility,” Sather told the Georgia Straight.
The agreement’s power has yet to gain much public attention. Yet it applies to every branch of the provincial government, as well as to every Crown corporation, school board, local or regional government, university, school board, health authority, commission, agency, and committee.
To take one example of the agreement’s impact, suppose that the City of Vancouver wants to place an $11,000 order for stationery with a Downtown Eastside firm in order to support business in that area. Under the agreement, that will no longer be possible after next April 1. Starting then, municipalities and the thousands of other entities covered by the agreement must provide “open and non-discriminatory access” for such tenders to everyone in both provinces. (The agreement, for goods purchases, kicks in at $10,000. For services, the threshold is $75,000; for construction, it is $100,000.)
The NDP’s Sather said the agreement’s restrictions on municipalities’ tendering will likely be raised at the annual convention of the Union of B.C. Municipalities, to be held October 23 to 27 in Victoria. “It’s probably an agreement that they haven’t paid a lot of attention to, and I think they should,” Sather said.
Unlike the largely ineffective national Agreement on Internal Trade, the new B.C.–Alberta deal includes penalties, of up to $5 million per offence, plus costs.
Although the agreement allows exceptions for “regional economic development measures”, such measures are exempt only if they are adopted under “exceptional circumstances” and are not more trade-restrictive than “necessary”. As well, the exceptions apply only if they do not “unduly harm” the economic interests of “persons, goods, services or investments”.
Economic Development Minister Colin Hansen said fears that the agreement threatens environmental and other standards in B.C. are overblown.
“There’s no reason why anyone should jump to those conclusions,” Hansen told the Straight. “We can sit in a comfortable status quo without really challenging what are the standards that best meet the public interest.”
Asked about tendering by municipalities, Hansen replied: “Open tendering is something that we fundamentally believe in.…Having competitive tendering, the winner out of that is the taxpayer. This will allow for B.C. companies to be competitive when it comes to Alberta and vice versa. In any kind of a tendering process, the more opportunities there are for companies to bid, then the more competitive the ultimate pricing [will be].”
Vancouver consultant Ellen Gould, an expert in trade agreements, has worked for the Washington, D.C.–based consumer advocacy group Public Citizen, and for the Union of B.C. Municipalities. She told the Straight that the B.C.–Alberta agreement threatens almost any regulation created by any branch of B.C.’s provincial, regional, or municipal governments.
She said all that is needed is for someone to claim that a regulation violates the agreement’s “no obstacles” provisions as laid down in Article 3. “You get a whole bunch of people who can interpret any regulation as an obstacle to their investment—I just can’t imagine a regulation that wouldn’t,” Gould said. “That’s the nature of regulation, right?”
The agreement, she said, constitutes a “massive deregulatory threat”.
Gould added that the agreement’s exceptions—which include measures related to aboriginal peoples, the environment, water, taxation, social policy, and workers’ compensation, among others—may mean little.
She said the key to the exceptions is to understand how “trade panels”—which would resolve any disputes—treat exceptions.
“You have to do the least trade-restrictive thing,” Gould said. “The exceptions very, very rarely hold up.” Municipalities are going to be harassed if they try to implement or continue with “buy locally” policies, she added.
“It not only means you can never do that, and you can be sued if you do, but it just creates an enormous headache, especially for small municipalities,” Gould said.
She said the B.C. government’s claim that the agreement will create 78,000 jobs in B.C. diverts attention from its potential to harm B.C.’s environmental and other standards.
“Most people are totally in favour of trade, so they just say, ‘Yeah, I’m in favour of the agreement,” Gould said. “Then they find out, ‘Oh, I can be sued for regulating?’?”