tilma another one

Every few years, the left needs a new acronym to mobilize the troops — GATT, FTA, WTO, NAFTA. As a young Foreign Service officer, I once…

Every few years, the left needs a new acronym to mobilize the troops — GATT, FTA, WTO, NAFTA.

As a young Foreign Service officer, I once worked on the Multilateral Investment Agreement (MIA). This quickly became the Multilateral Agreement on Investment once politicians realized voters thought MIA meant missing in action.

MIA/MAI went through a familiar cycle.

First, some modestly useful suggestions from deep in the lower caves of the public service. Then some meetings in Ottawa — briefings with distracted ministers, with people three levels below the deputy minister in the provinces, and then negotiations with foreign officials.

The next step was some public consultations that were so sparsely attended that it was embarrassing to write a memo about them.

Then a few months later, to our surprise, there were headlines in the Globe and Mail with activists denouncing another corporate conspiracy and threat to democracy.

In response, a few ministers made some unconvincing arguments in favour of the MIA.

Corporate Canada made a few supportive noises, but not many.

Finally, the MIA really did go missing in action.

So what’s next?

No one campaigns against NAFTA anymore. It coincided with (helped cause?) one of the longest economic booms in living memory.

The country’s economy doesn’t seem hollowed out. Nor does our democracy seem any weaker than it was before.

I haven’t noticed a race to the bottom in social standards, as many predicted.

In fact, being prosperous seems to have allowed health and education budgets to grow to record levels.

The Security and Prosperity Partnership of North America looked like it might be the one.

I felt sorry for my former colleagues on the file, since it is so clearly in George W. Bush territory.

But, by junk mail count, it’s TILMA that is the next big campaign.

Alberta and BC signed the Trade, Investment and Labour Mobility Agreement on April 28, 2006.

If there is a duller website than www.tilma.ca, then please don’t let me know.

The agreement deals with tedious things like Alberta crane operators being able to operate cranes in BC without getting recertified, BC physical therapists being able to work in Calgary, and Canmore contractors being able to bid on municipal projects in Golden, BC without competitors from Kamloops getting extra points just for being local.

It’s actually very similar to the forest of rules they have in the European Union, where Swedish municipalities aren’t allowed to discriminate against Danish or Greek businesses.

Who cares about all of this?

Well, presumably crane operators have been upset for years.

Plus, the Conference Board of Canada estimates that TILMA will add $4.8 billion to BC’s gross domestic product and create 78,000 jobs.

We have to be careful about these estimates since, as Yogi Berra noted, nothing is harder to predict than the future.

But $4 billion is only two per cent of BC’s gross domestic product. Not really a big deal.

As a result, taxpayers, businesses, therapists who have no plans to work in Calgary, and the rest of those in favour are lukewarm.

However, some people could lose big.

Are you a BC contractor who rather likes not having Albertans bidding against you?

Do you work for a company like that?

TILMA could be very bad news.

The other issue is democracy.

Some are alleging that TILMA would undemocratically hand power over to companies, leaving governments unable to act in the public interest.

This sounds dangerous, and is a staple argument against WTO, NAFTA, MIA/MAI and most acronyms.

But a quick visit to Sweden indicates that it is not necessarily true.

Other than high beer prices, Sweden looks like a pretty good place to live despite all those TILMA-style regulations from Brussels.

In fact, Europe’s version of TILMA was thought up by French socialists like Jacques Delors.

All of these agreements share a common theme — getting governments to agree not to use their powers in areas where local preference regulations cause more harm than good.

Does it really do the people of Calgary any good that BC physical therapists are restricted in Alberta?

Vice versa?

Why not agree to stop restricting physical therapists?

And if it really is so bad to have Albertans bidding on BC municipal contracts, why not ban eastern BC contractors from Vancouver?

Or Richmond contractors from Surrey?

This reminds me of Frederic Bastiat’s suggestion when the train from Paris to Spain was built.

People were worried about job losses in the traditional carriage and shipping businesses and proposed that the tracks have a gap at Bordeaux.

This would create jobs in hotels, warehouses and in carrying the goods across town from one train to the other.

“Why just Bordeaux?” said Bastiat. “Put a gap in the tracks in every town and France’s prosperity will be assured!”

There is also the worry that Whitehorse will no longer be able to stop downtown skyscrapers if the Yukon signs TILMA.

The intent of the agreement is actually that Whitehorse will still be able to have whatever height restrictions it likes, as long as they apply to people and businesses no matter where they are from.

You can have a four-storey limit, but you can’t let Yukon businesses have six stories and Alberta businesses only three.

Now, the TILMA papers are hundreds of pages long and there may be a sub-sub-clause that allows huge skyscrapers in Whitehorse.

Or that companies can sue the Yukon government for $5 million for breaking it.

Should such a thing happen, one hopes the Yukon government would abrogate the agreement and swiftly punish any officials or newspaper columnists who had been in favour of it.

All of which brings us to the Yukon.

Should we join TILMA?

There would be clear negatives for local contractors and many workers.

There would be benefits to some regulated tradespeople who want to work more easily in BC or Alberta.

Government projects would cost less.

Why?

If they didn’t that would mean the Yukon government’s rules favouring Yukon businesses didn’t have any effect and could be repealed tomorrow.

So let’s guess how much our local preference costs.

The Yukon government capital budget is $212 million this year. As a rough estimate, let’s assume that the Yukon regulations result in bids that are two per cent higher than they would have been if nasty Alberta contractors had been on a level playing field.

We could do more complicated estimates, but that would blow the Yukon News’s economic consulting budget.

Two per cent is $4 to $5 million a year, or a small school or health centre.

So that’s the real question we face.

It’s not about democracy or hidden corporate agendas. It’s whether we would prefer to have more local businesses and Yukoners working on Yukon contracts, or have one extra project per year?

This is a political choice.

I happen to think the status quo is serving us alright at the moment.

The Yukon is a special place, and I like to see successful local contractors and my friends working for them.

I get the sense that most Yukoners agree with this.

Deal opponents would be advised to make the argument in these terms, and not try to scare us about threats to democracy.

But the next time someone complains that their favourite government capital project got cancelled, you can remember that our Yukon preference rules aren’t free.

Keith Halliday is a Yukon economist and children’s author. His thoughts on a variety of issues will pop up occasionally on this page.