McGuinty and Charest hiding details of trade deal

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On October 2, Ontario Premier Dalton McGuinty met with his Quebec counterpart Jean Charest at the fifth annual Ontario Economic Summit to discuss their efforts to work more cooperatively, including plans to sign a new inter-provincial trade agreement that would create a "common economic space in central Canada."

Most news reports mentioned the new partnership in passing and focused on the premiers' accusations that the federal leaders are not taking the economic crisis seriously enough. But the financial collapse south of the border, and Canada's and the province's potential responses to it, are precisely why we should be paying much more attention to what McGuinty and Charest are up to - and how their new partnership could do more to limit policy solutions than increase them in these times of need.

The premiers announced the forging of an Ontario-Quebec Economic Partnership Agreement (OQEPA) at a joint cabinet meeting in Quebec City on June 2. While the announcement was a culmination of several protocols for cooperation the two men had signed since 2006, this was a much bigger leap toward a full trade agreement âe" one they have kept very close to their chests. Despite a press release this June stating a framework for negotiations had been released publicly, it is, in fact, only available upon request from the Ministry of Economic Development.

For those who haven't had a chance to read it (probably most people), the new inter-provincial agreement is modeled on the controversial Trade, Investment and Labour Mobility Agreement (TILMA) signed by the premiers of Alberta and British Columbia, without public debate, in April 2006.

Unlike the TILMA agreement, Charest and McGuinty are talking about a regional energy and electricity strategy, which would be quite positive for both provinces, especially if it discourages energy sales to the United States where NAFTA trade rules kick in, with the effect of locking in those exports and limiting future public policy decisions. If Ontario bought Quebec's surplus energy, Charest wouldn't have to look for buyers in the U.S. That's a good thing and we should be encouraging that kind of cooperation among provinces.

However, the premiers are also considering importing TILMA's most egregious component - its NAFTA-like investor-state clause that allows corporations to sue either provincial government for any measures that "operate to restrict or impair trade between or through the territory of the Parties, or investment between the Parties."

"Measures," under TILMA's definition, include "any legislation, regulation, standard, directive, requirement, guideline, program, policy, administrative practice or other procedure."

In other words, TILMA says that nothing a provincial or municipal government does in the course of its normal activity should operate "to restrict or impair" the trade or investment of companies working in either province. It is NAFTA at a provincial scale, and at a time - think $700 billion U.S. to bailout Wall Street - when the dangers of a blind reliance on market forces couldn't be clearer.

That doesn't bode well for Ontario and Quebec workers concerned about job losses. If Premiers McGuinty and Charest copy this lopsided deal it will put significant constraints on their powers to manage the provincial and regional economies, potentially criminalizing subsidies and other focused development policies designed to keep jobs in the province.

Limits on the privatization of health services, strict waste-reduction policies, such as bottled water bans in municipal facilities, or managed farm and dairy regimes could all come under pressure from corporate lawsuits should Ontario and Quebec adopt the TILMA dispute resolution process.

This is an incredible coup for the corporate world. It essentially raises private property rights above almost all other considerations in provincial and federal law. Why aren't we debating this? Why is McGuinty discussing his new deal with Ontario's business community to the exclusion of everyone else?

The Government of Saskatchewan did consult with cities, unions, municipalities and the public in mid-2007 and eventually decided that signing TILMA would not be worth the risk to the province's Crown corporations or to municipal autonomy. The Yukon government said no because it would compromise environmental policy.

Notwithstanding the current Saskatchewan Party's recent decision to pursue an economic cooperation pact with Alberta very similar to the one being negotiated between Ontario and Quebec, the province's consultation process remains proof that where discussion was truly open, and debate comprehensive, the public has rejected corporate-friendly agreements like TILMA and OQEPA.

Earlier this year, the Council of Canadians was personally invited by Ontario's lead trade negotiator, Jim Peterson, to give our impression of inter-provincial trade and agreements like TILMA, at which point we expressed our opposition and said we expected the premiers to carry out full public debates in Ontario and Quebec similar to what happened in Saskatchewan and the Yukon.

Those consultations have not happened and it doesn't look like either leader is in any rush to make them happen. Instead, our premiers continue to discuss with the business sector what is in essence a business sector priority for Canada - deregulation in the guise of economic cooperation. And they are doing it at a time when we need so much more from our governments than laissez faire solutions to job losses, financial uncertainty and a looming economic crisis.

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