||Volume 19, Number 4, January/February 2007
A profound change for the worse
by Ellen Gould
This past spring, with no public consultation, the BC and Alberta governments signed the Trade, Investment, and Labour Mobility Agreement (TILMA). Todd Hirsch of the Canada West Foundation says the agreement effectively makes the two provinces one in every respect except for voting and the colour of the license plate. David Bond, former economist for the Hong Kong Bank in Canada, describes TILMA as the "the single most important economic event to happen in Western Canada in the last almost 100 years. It really is very, very profound."
The most profound impacts of TILMA are likely to be political rather than economic. A report for the BC government done in 1998 surveyed studies of interprovincial trade barriers and found that they were already low, so any economic benefits to be gained from eliminating remaining barriers would also have to be minimal. On the other hand, TILMA’s constraints on government are without parallel in international trade and investment agreements. Certain government "measures" (defined broadly to include legislation, programs, regulations, guidelines, or policies) will have to be eliminated under TILMA’s requirement that there be "no obstacles" to trade, investment, or labour mobility.
What government program could not be seen as a restriction on investment or labour mobility? By their very nature, the provision of government programs like public education restricts private investment in the education sector. TILMA’s definition of investment includes the establishment or expansion of an enterprise. In the event of a TILMA challenge, it will be left to an independent panel to determine if aspects of the public education system violate the agreement by creating obstacles to the establishment or expansion of for-profit schools.
TILMA also prohibits governments from establishing new regulations or standards that "restrict or impair" trade, investment, or labour mobility. Existing regulations and standards in BC and Alberta will have to be harmonized. So Premier Campbell’s initiative to ban junk food in schools will be vulnerable to a TILMA challenge, since Alberta’s education minister has declared he will not introduce such a ban.
Once the agreement comes into force on April 1, 2007, parties to the agreement and private individuals will be empowered to take complaints to an independent panel and get up to $5 million in compensation for successful challenges to government measures. TILMA is like NAFTA in allowing private interests to take their complaints about government to dispute panels. But TILMA goes far beyond NAFTA in a number of ways. For example, it does not have the exception in NAFTA that allows Canada to "adopt or maintain any measure with respect to...public education."
The Alberta/BC government guide to TILMA says that the agreement applies to "all government measures across all sectors" and if something is "not clearly identified as an exception, it is subject to the rules of the agreement." Education is not clearly identified as an exception to TILMA. The agreement exempts "social policy," but does not include education as an example of what constitutes a social policy. And after two years, the agree-ment will be extended to cover all measures of, or related to, school boards, and publicly funded academic institutions.
With the sweeping prohibition in TILMA of government measures that restrict investment or labour mobility, BC and Alberta have essentially committed themselves to a radical reduction in the powers of government. Take, for example, TILMA’s requirement that "any worker certified for an occupation by a regulatory authority of a Party shall be recognized as qualified to practice that occupation by the other Party." BC and Alberta have listed occupational requirements in TILMA that will have to be made consistent with the agreement after a transition period.
Among the requirements BC and Alberta have listed as "inconsistent" with, or violations of, TILMA are the "Additional training and examination" needed to be certified as a teacher in BC. The BC College of Teachers’ requirements are higher than Alberta’s, such as requiring a five-year rather than a four-year degree; more units of course work in specific subject areas such as English composition; stricter limits on how long a teacher can be out of the profession and still have their qualifications be considered current. All of these higher standards restrict or impair the ability of Alberta-certified teachers to get hired in BC.
TILMA will prevent govern-ments from maintaining policies, such as a higher English proficiency testing requirement for teachers even if (1) they are needed to address problems particularly serious in one province, (2) there is a reasonable expectation that such policies will improve educational outcomes, or (3) simply because their populations want them to.
TILMA allows for violations of the agreement only if all of the following criteria are met:
- A government has to demonstrate it is pursuing objectives recognized in the agreement as "legitimate." TILMA defines a limited list of government objectives, such as protection of human life, as legitimate, but this list does not include protection of the quality of the public education system. So governments could not defend themselves from a TILMA challenge based on that goal.
- A government has to demonstrate it is not being "unnecessarily" restrictive. Dispute panels have interpreted such "necessity tests" in other agreements to mean measures have to be proven to be "effective," which is a very difficult thing to do conclusively in the education sector given all the variables involved. Under necessity tests, governments also have to demonstrate that less restrictive options could not have accomplished their objective. Furthermore, they have to prove the strictness of what they have done is "proportional" to the importance of their goals. How, for example, would BC prove that requiring applicants whose qualifications are over 20 years old to take their training again is proportional to the goal of maintaining the quality of teaching? A dispute panel could rule there are "less restrictive" alternatives BC should adopt.
- Finally, governments have to demonstrate they are not engaging in a disguised restriction on trade, investment, or labour mobility. Could BC demonstrate its higher certification requirements for teachers is not just a way to reserve teaching jobs for its residents?
Premier Campbell has said TILMA’s harmonizing of requirements will mean BC will be able to attract more skilled workers not only from Alberta but as well from overseas. Is the increased labour mobility TILMA could provide worth sacrificing a government’s ability to maintain higher standards than exist in another province? These are issues that touch on the very essence of democratic governance and should not be decided without engaging the public and the legislature.
Ellen Gould is a Vancouver-based consultant on trade and investment agreements.