The Trouble With TILMA

Stuart Trew
Vue Weekly
August 23, 2007

Gordon Campbell is probably scratching his head. The Trade, Investment and Labour Mobility Agreement (TILMA) he signed with Ralph Klein in April 2006 was supposed to be a hit. It didn’t matter that neither premier consulted with their electorates or even their respective legislatures before inking the deal, which drastically changes the economic landscape in British Columbia and Alberta by significantly reducing the scope of democratic governance and significantly increasing the power of corporations.

No, Campbell and Klein were men of action, or so they thought, and their mission to unshackle corporate Canada from the burdens of provincial regulation was supposed to spread across the country like wildfire.

In fact, quite the opposite is happening. Saskatchewan and Manitoba are turning their backs on TILMA, and municipalities in Alberta and British Columbia are in full rebellion against the agreement’s enormous legal scope. More recently, despite heavy corporate and federal government lobbying to take TILMA national, a premiers’ meeting in Moncton, New Brunswick could only agree to study the possibility of adopting some of TILMA’s language into the Agreement on Internal Trade.

That’s hardly the broad consensus Campbell was hoping for.

So what happened? Well, what should have happened before Alberta and BC signed TILMA to begin with. People are actually reading the agreement, some premiers are discussing it with the public, and a consensus is slowly forming that the case for eliminating so-called inter-provincial trade barriers is just too weak, and the risk to democracy posed by TILMA much too high.

TILMA is a legal document that puts constraints on legitimate government action in order to discourage new (and eliminate old) policies and regulations that serve to “restrict or impair” the free flow of trade or investment. It does this by allowing corporations and individuals to challenge, in front of an unelected trade panel, any provincial or municipal measure that they feel hurts their profits.

Since most government regulation is about balancing the profit motive against the pubic good, any regulation can be seen as somehow hurting someone’s profits. That makes TILMA a kind of corporate bill of rights that turns governance on its head. Under TILMA, it is no longer up to corporations to prove they are not harming the public. It is up to the public (government) to prove it is not harming profits.

Examples of government measures that can be challenged under TILMA include land use regulations (which restrict real estate investments), local zoning bylaws to prevent urban sprawl, green space requirements for housing developments, building height restrictions and junk food bans in schools. All of these policies in some way affect profits.

There is a small list of so-called “legitimate” objectives (including measures related to water, aboriginal people, energy, forestry and mining) but these are to be reviewed annually, “with a view to reducing their scope.” Health and education are not out of TILMA’s reach, putting even public health care at risk. After all, a ban on private clinics operates to “restrict or impair” investment.

Also, measures aimed at achieving certain legitimate objectives can be quashed if the government cannot prove to a TILMA dispute panel that its measures are the least restrictive imaginable—an almost impossible task.

To add insult to injury, TILMA was signed under false pretences, based on the results of a single Conference Board of Canada study that claims the agreement will save B.C. $5-billion a year and create almost 80 000 jobs.

According to a report from economists Marc Lee and Erin Weir, the projected benefits from TILMA are “implausibly large” and based on a tiny survey of BC businesses—only 4 of the 13 polled returned surveys—and government ministries. “The scoring of estimated benefits is completely arbitrary,” the economists write. “No literature, data, interviews with companies, or lists of alleged barriers are presented.”

After adding up these arbitrary figures, the Conference Board then accidentally doubled its final estimate of TILMA’s benefits. “Even after correcting this error,” write Lee and Weir, “most of the projected benefits are from industries exempt from the agreement or from industries that barely engage in inter-provincial trade.”

The provincial government in Saskatchewan, which recently wrapped up a public consultation on inter-provincial trade that focused on TILMA, has refused to sign on to the agreement precisely because it wasn’t convinced by the weak arguments from supporters of the deal. Saskatchewan’s Government Relations Minister Harry Van Mulligen also said TILMA’s “shock therapy” approach to trade barriers was unhelpful and that the province couldn’t afford to be sued every time a corporation felt some rule or another was hurting profits.

Saskatchewan’s rejection was clearly felt at the recent Council of the Federation meeting where Campbell’s TILMA sales pitch fell on mostly deaf ears. Hopefully it will also resonate in Alberta and BC, where the municipal struggle against TILMA continues to build, despite the undemocratic dreams of “men of action.”

Stuart Trew is a communications administrator and researcher with the Council of Canadians, an Ottawa-based Canada-wide advocacy group that works to promote Canadian independence by supporting progressive policies on fair trade, clean water, energy security, public health care and other issues of social and economic concern.

Click here for more information about TILMA.