Municipalities Fight Back

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Municipalities want the feds to protect them and involve all Canadians in trade negotiations.

The first thing that comes to mind when international trade negotiations are mentioned is probably not your city council.

But about forty municipalities have recently passed resolutions about agreements such as the proposed Free Trade Area of the Americas (FTAA)."There is a division in society which is now being reflected in institutions," says Armand Côté, a Council of Canadians activist who lobbied for Ottawa's resolution.

The typical resolution urges the federal government:

  • to consult with all Canadians when making trade agreements;

  • to include municipal governments in negotiations and;

  • to exempt municipal areas of jurisdiction from trade agreements.

The trend began a year ago, when Vancouver's city council passed a resolution about the World Trade Organization's planned expansion of the General Agreement on Trade in Services (GATS).

Then the Council of Canadians got involved, sending resolution kits to its chapters. The council's campaign goal is to get fifty municipalities to pass resolutions before the Federation of Canadian Municipalities annual conference in Banff, beginning on May 25.

"It's really just snowballed," says Victoria Gibb-Carsley, who is coordinating the campaign.

The governments that have already passed resolutions include Vancouver, Red Deer, Yellowknife, Niagara, Guelph, Ottawa, Kingston and Sackville, New Brunswick.

Something is making municipal governments nervous.

Precedents | Tensions | Actions


That something is a recent case under North American Free Trade Agreement's Chapter 11, which allows corporations to sue governments when they feel their rights as investors have been violated.

In the mid-1990s, a U.S. company, Metalclad, tried to build a waste-disposal plant in Guadalcazar, Mexico.When a geological study found that the plant would contaminate the local ground water, the municipal and state governments tried to block the project.

Metalclad won US$16.7-million in compensation in a NAFTA tribunal lawsuit against Mexico in the fall.

On May 2, a judge in B.C. largely upheld Metalclad's victory on appeal.Canadian city councillors worry that, like Guadalcazar, they could be powerless in the face of a threat to public health.Some municipalities, such as Vancouver, were motivated particularly by the GATS discussions.

"The WTO negotiations have the potential to affect local government," says Vancouver councillor George Puil. "We are very concerned about their effect."

The GATS and FTAA may affect municipal services such as water delivery. They may affect municipalities' ability to hire local contractors. And trade tribunals, as the Metalclad case demonstrates, can interpret zoning and construction by-laws as "barriers to trade."

Some municipalities, including Ottawa, refer to the Metalclad case in their resolutions.

"It's a non-theoretical example of what can happen," says Alex Munter, an Ottawa councillor who chairs the committee that drafted that city's resolution, which passed May 9.


Munter points out that even councillors who support free trade think municipalities should be involved in the process.

"What is motivating this is the desire for our government to make our own decisions and not be stampeded by trade agreements in which we had no part."Peter Boyle, a Kingston labour activist, says Kingston's resolution has helped educate politicians and galvanize activists.

"Certainly, it raised awareness in the community," he says. "There's been a lot of support."

The resolutions have been sent to members of federal Parliament."None of the resolutions have a rat's whisker of authority as far as senior levels of government are concerned," says Côté. "But they do represent a lion's roar of a political statement."

Pierre Pettigrew, the federal trade minister, sent a letter to Ottawa's city council assuring them that they have nothing to fear.

The letter reads in part:

"The Canadian government has recently become aware of a campaign to have Canadian municipalities pass resolutions against the GATS. I believe that much of the information municipalities are being provided about the GATS and Canada's position is erroneous and calculated to create fear and apprehension about the agreement in the minds of municipal leaders."

Gibb-Carsley says this shows that the resolutions are affecting the federal Liberals.

"If Pettigrew is taking the time to write to municipal councillors, obviously they're worried."


The next step is to get the Federation of Canadian Municipalities (FCM) to adopt a resolution at its meeting this month.

The resolution under consideration asks for a clear exemption for municipalities in future trade agreements. The FCM already has statements about the protection of municipalities in trade agreements within two of its standing committees' policy statements.

Gibb-Carsley says a resolution by the whole body will send a signal to the government that it is being watched.

Many activists and councillors will be watching the Federation of Canadian Municipalities on May 25-28.

"I'm hopeful that it will have an impact on making the federal government understand that there is widespread concern about these agreements," says Munter. "It's harder to ignore when you have the national voice of Canada's cities and towns saying we have some concerns about this and we want some answers."

Kate Heartfield is a freelance journalist living in Ottawa. She is also an unabashed fan of municipal politics. She has written for the Ottawa Citizen and Ottawa Life magazine, and she has a short feature due out in the next issue of Ms.

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