The Trade Deals
The Ontario-Quebec Trade and Cooperation Agreement
On Friday, September 11, 2009, the Ontario and Quebec governments signed a Trade and Cooperation
Agreement (OQTCA) “aimed at eliminating and reducing barriers that restrict trade, investment and
labour mobility.” This was the first time the deal had been made public, though it went into effect less
than three weeks later, on October 1. There was no government white paper either before or after
Premiers McGuinty and Charest signed the deal in Toronto, and barely any explanation of why such an
agreement was necessary, or what it would accomplish.
But with the exception of a few high profile labour mobility disputes, there are few real barriers to
cross-border trade with Quebec. Those that do or did exist – differences in margarine colouring
rules, for instance, or trucking specifications – have either been eliminated already or they are being
negotiated by other means. The real goal of both the Ontario-Quebec agreement, and the Alberta-B.C.
Trade, Investment and Labour Mobility Agreement on which it is based, is to drastically constrain what
provincial and local governments, as well as school boards and other agencies, can do to regulate
business activities, including the activities of large multinational companies.
Rule #1 – No Obstacles
The powerful tool by which so called barriers to trade, investment or labour mobility are to be eliminated
is a “No Obstacles” article in the agreement, which states that “each Party shall ensure that any measure
it adopts or maintains does not operate to create an obstacle to trade, investment and labour mobility
between the Parties.” This exposes virtually everything that governments do to attack because every
government action, from regulating toxic substances to land use planning, affects the market (i.e. private
commercial or investor interests.)
A bottled water ban at a local City Hall, for instance, operates as an obstacle for Quebec-based bottled
water companies looking to sell their product and could be challenged even if the local policy does
not discriminate in favour of Ontario water bottlers. An even greater danger exists from Quebec-based
private health insurers who could challenge Ontario’s ban as an impediment to cross-border investment.
In this way, the “no obstacles” requirement also threatens public sector services which often formally (in
the case of a ban on private health care insurance) or informally, as in public funding and other support
for non-profit child care, curtail competing private sector services.
By asserting the priority of commercial objectives, the OQTCA seeks to prioritize business and
investment interests over all other societal values and goals, including public health, environmental
protection, local economic development, and so on.
The assault on government regulation
Under OQTCA, new hurdles will be placed before the passage of legislation or other measures affecting
business. This includes passing new rules by a joint private sector consulting group. Then, measures
that survive the gauntlet of internal review can be attacked by private tribunals invoked by the other
province (inevitably at the request of private interests opposed the measure.) To survive these review processes, governments and other regulators will have to exert time and money to prove they are the
“least trade restrictive” measures possible, and that they impose minimally on investors.
The Ontario and Quebec governments are responsible, under OQTCA, for putting in place measures
that will ensure the compliance of their government entities should a private interprovincial trade panel
rule against a law or policy as an unlawful barrier to trade, investment or labour mobility. Penalties for
ignoring a ruling can reach $10 million. It is counter to any notion of democracy to allow non-elected
trade panels to decide what is and is not legitimate public policy, and then to fine elected governments
when their policies are deemed unlawful barriers to trade and investment.
The laws in question won’t all be trade related either. By including the environment and sustainable
development as one of six specific commitments, the OQTCA has empowered private tribunals to
second guess policy and law makers as to whether a particular environment law or regulation is no more
trade restrictive than necessary to achieve its goal. In other words, to successfully defend a measure
under this test, a province confronts the daunting challenge of proving a negative – namely that there
is no other option available to achieve the objective that would be less restrictive of trade, investment
and labour mobility. An education campaign on the environmental impact of bottled water is clearly less
hurtful to business than a bottled water ban at City Hall, if much less effective.
What you can do
The essential thrust of the Ontario–Quebec agreement is to promote policies of de-regulation and
privatization that diminish the capacity of present and future government to exercise their authority to
address the social, economic and environmental needs of the province. Public consultation is badly
needed before the Ontario-Quebec Trade and Cooperation Agreement can be allowed to come into
effect. We must demand that the McGuinty government put this agreement on hold until those debates
can happen. Write to your MPP, call their constituency offices, and ask them to organize a public forum
to discuss the Ontario-Quebec Trade and Cooperation Agreement before it is ratified.
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