Happy April fools day. Welcome TILMA

As of April 1st, the people elected to run our municipalities and school boards had better think twice before they make a decision that might affect the profits of a corporation. On April 1st the Trade Investment and Labour Mobility Agreement (TILMA) between Alberta and British Columbia comes into full force.

Its implications are far reaching. In a report released by the Council of Canadians one of Canada’s foremost trade lawyers, Steven Shrybman, outlines the origins and probable outcomes of the deal.

Shrybman says that both TILMA and amendments to the Canada-wide Agreement on Internal Trade (AIT) go a long way towards expanding the scope of Canada’s free trade agreements (the FTA , NAFTA and potentially a new deal with Europe) to limit the power of provinces.

The key point in TILMA, Shrybman argues, is Article 3 which says, “Each Party will ensure its measurs do not operate to restrict or impair trade between or through the territory of the Parties, or investment or labour mobility between the Parties. (Empahsis added). Shrybman coontinues:

The implications of this broad prohibtion are extrememly problematic for two reasons. First, virtually any government action can be seen as offending this prohibition. Everything a government does is likely to affect the market, ie. investment, in some manner, or there would be no reason for government to act in the first place.

More, he says:

Because TILMA provides unprecedented grounds for asserting the interests of private service providers, and a sympathetic forum for doing so, it is likely to become the preferred venue for those seeking to privatize public services.

The most important feature of TILMA, Shrybman says, are the dispute procedures “borowed from Chapter 11 of NAFTA, which entitles private investors and companies to claim monetary damages caused bythe failure of a government to comply with the treaty.”

Shrybman offers examples of current NAFTA challenges that highlight what we can now expect from TILMA. One company is demanding $160 million because it was prevented from establishing private health clinics in Canada. Another is claiming $24 million because it was forced to sell raw logs to the Canadian market before exporting to the US.

All of these internal trade agreements have been negotiated in secret. BC and Alberta had signed TILMA in 2006 months before the deal became public. At least two amendments have been made to the AIT. The agreement on labour mobility was made public only after it was signed. The deal implementing financial penalties for infractions is still secret. In Saskatchewan, public hearings on TILMA stopped the deal spreading to that province and provincial ministers are not prepared to let that happen again.

In BC both school boards and municipalites asked to be exempted from TILMA. They were refused.

Perhaps the most important point Shrybman makes is that at this time of economic crisis:

Trade officials describe their initiatives as “trade liberalization” – an agenda that would limit the role of government by promoting policies of de-regulation and privatization. This is of course precisely the policy approach that has been ruinous for domestic and global economies, and played a key role in forestalling meaningful efforts to redress climate change and other pressing ecological challenges.

At a time when we see the worst failure of markets in generations, TILMA and the AIT amendments dramatically increase the power of corporations and the market place. At a time when the world is calling out for governments to act, TILMA and its cousins undermine the power of governments to act to defend their citizens.

Topics: Economy, Municipalities, Privatization, P3s & public services