TILMA a Bad Deal For Canada
Jun 07, 2007
In April 2006, the governments of British Columbia and Alberta signed a historic trade agreement that will have sweeping ramifications for citizens of both provinces, if not for those in the rest of the country. The Alberta-British Columbia Trade, Investment, and Labour Mobility Agreement (TILMA) will create an integrated economy for the two provinces by April 1, 2009.
The TILMA is a formalized agreement in the spirit of the North American Free Trade Agreement (NAFTA) that was designed to eliminate barriers to trade, investment and labour mobility between the two provinces. Like NAFTA, the TILMA extends privileges to corporations and individuals, allowing them to sue provincial governments and their agencies for any regulation they deem to be “harmful to investment” – such as profit, for example.
The legally binding process created under the TILMA allows businesses and individuals to also challenge regulations in one province that are different from the other, the establishment of new, stricter regulations, and initiatives by one province that the other does not agree with. So if one province has more stringent health and safety regulations than another, for example, it could be challenged under the dispute mechanism. One can only imagine the effect legislation like this could have on labour law across the country.
It allows the creation of increased labour mobility by reciprocally recognizing occupational certifications and allows ‘open and non-discriminatory’ access to government procurement. Perhaps the most concerning dimension of the agreement is that, unlike its predecessors, it does not explicitly list the areas in which trade is to be ‘liberalized.’ Rather, trade is to be deregulated in all areas except those specifically listed as ‘exemptions’.
Proponents hail this new agreement because it will eliminate what they see as cumbersome and costly trade barriers between the two provinces. However, in reality, there is virtually no evidence to indicate that trade barriers are either numerous or costly in terms of doing business. In fact, there are really no hard numbers about the cost of interprovincial trade at all, merely best guesses from surveys commissioned by the very companies that stand to profit from the TILMAs implementation. It is very likely that there are so few barriers – and that those that do exist have virtually no effect on business – that an agreement of this nature is completely unnecessary.
Disputes under the TILMA will be arbitrated by independent panels with the authority to penalize governments with fines as high as $5 million per infraction. However, they can be hit with repeated complaints against the same program or regulation. This private enforcement means that governments will have no role in dispute resolution. By extension, officials elected by the general public do not get a say – disputes are resolved by a fully-private body.
It is expected that the dispute mechanism will also affect public policy development through a ‘chill effect’ whereby governments eliminate measures or abstain from introducing new ones in the fear that they will face a TILMA challenge. What government would want to take the risk of introducing new legislation that an independent court could deem worthy of a multimillion dollar fine?
As the TILMA just took effect on April 1, 2007, it remains to be seen just how this agreement will change the economic and social relationship between the two provinces. But it’s simply a matter of time before a challenge tests the dispute mechanism. With other provinces like Ontario already expressing an interest in becoming part of the TILMA, it is possible to envision a future where deregulation of this sort spreads across the entire country. Manitoba ought not get caught up in this chase for false benefit. There seems to be significantly more to lose than gain from being part of this agreement.
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