TILMA 'radical' shift in business
The truth about the Conference Board study on TILMA
By Murray Dobbin
The Daily Courier (Kelowna), January 25, 2007
Development Minister Colin Hansen's letter regarding the B.C.-Alberta agreement, TILMA ("Minister says TILMA offers many benefits," in The Daily Courier, Jan. 11) accuses critics of spreading fear and misinformation. Yet, his own response is itself misleading.
Hansen says his government "has the numbers to prove" that there are enormous benefits for B.C. from TILMA. The numbers come from a study conducted for the government by the Conference Board of Canada. The Conference Board has done credible studies in the past. But this study has major flaws.
It claims that B.C.'s gross domestic product could rise by as much as $4.8 billion. This number is wildly exaggerated and is 10 times as high as studies done by Industry Canada. It is equal to half the total trade we now do with Alberta, and equal to the value of all the lumber we ship to the U.S.
If you look at the study, you will find is has no actual hard data, it does not quote from any of the other studies done on this subject, has no interviews with CEOs to see what barriers they say exist and, remarkably, there is no list of any real-life barriers at all. It uses a simplistic methodology that no other study has used and does not even try to justify it.
One huge error in the study probably counts for half the alleged $4.8 billion. The study includes a calculation of benefits to three natural resource industries - fisheries, forestry and mining - that are, in fact, excluded in the agreement and thus cannot benefit at all. It also calculate benefits for sectors such as retail which do almost no inter-provincial trade.
Hansen lauds the Conference Board for its objectivity, yet in testimony about TILMA before the Senate Banking Committee, Glen Hodgson, the board's chief economist, sounded more like a promoter, telling the Senators: "We strongly endorse and welcome the agreement between B.C. and Alberta...."
The other Conference Board paper the Minister refers to, "Death by a 1000 Paper Cuts," did not do any independent research into the total cost of inter-provincial trade barriers. Its author, Paul Darby, admits:
"The figures don't exist. Nobody knows."
Lastly, Hansen says TILMA does not require "harmonization." He is playing with words. It is true the word harmonization does not appear in the agreement, but "reconcile," a word with the same meaning and same implications, does. In addition, Article 5 calls for "mutual recognition" of each province's regulations. It allows an investor to, in effect, apply the weakest regulations of the two provinces to his investment.
For example, Vancouver has rent controls, but Alberta does not. An Alberta investor buying an apartment building here could use TILMA's "mutual recognition" article to have rent control waived for his building.
Maxime Bernier, the federal Industry Minister, praises TILMA because, he says, it will force governments to "compete" to have the lowest regulations.
I have been writing about and analysing these kinds of agreements for almost 20 years. This is by far the most radical one I have ever studied that has actually been signed. It will dramatically restrict the ability of governments - including local governments - to act in the public interest. It will lead to massive deregulation - at a time when global warming demands more.
Murray Dobbin
Policy Analyst, Council of Canadians, Vancouver
