Why the New West Partnership is Bad Idea

September 13, 2010

Kevin Rebeck, President, Manitoba Federation of Labour

I enjoy many of the debates that Dave Angus and I engage in when our paths cross – but the argument he advances in his opinion piece ‘Manitoba must seek a seat at the table’ (Winnipeg Free Press Sept 3, 2010) would not be one of the enjoyable ones.

Briefly put, Mr. Angus argues that Manitoba should be part of the triumvirate formed by British Columbia, Alberta and Saskatchewan in the so-called New West Partnership. This joint policy embraced by the neo-conservatives we share the West with is said to be the basis for joint economic success through joint action on eliminating trade hindrances and making labour mobility between the provinces easier.

Mr. Angus asks, “Why is Manitoba not part of this agreement?”

The New West Partnership is the child of the widely discredited Trade, Investment and Labour Mobility Agreement (TILMA), a proposed agreement floated by neo-cons over the past decade to do something about the ongoing economic crisis created by trade barriers between Canada’s provinces. Crisis? What crisis? What massive trade barrier wall between the provinces?

The many studies conducted by the provinces and the federal government before 2005 reached the same conclusion – that is, there are virtually no substantive trade barriers between the provinces and none have been erected by anyone since 2005. As low as they are today, the MacDonald Commission characterized them as representing .05 per cent of Canada’s Gross Domestic Product back in 1985 when Donald MacDonald was pitching free trade with the United States. If anything, the cost of inter-provincial regulation has decreased since 1985.

What corporate Canada and the neo-cons call ‘trade barriers’ are in fact differences across provinces in government procurement systems, labour standards, consumer-protection measures, environmental regulations, and taxes. The alleged trade distortions resulting from these differences, and the supposed public benefits of removing them, have been greatly exaggerated.

In fact, the whole basis of our political system is to allow different provincial governments to enact different policies in response to different conditions. The true purpose of TILMAesque schemes like the New West Partnership is not to facilitate inter-provincial trade, but to reduce different provincial regulations to the lowest common denominator.

Since inter-provincial trade barriers are already very low, the possible gains from further reducing them would be minute. The costs associated with implementing programs or agreements that are based on TILMA could be frighteningly high. By giving investors wide latitude to sue provincial governments over differences in public-interest regulation, downward pressure on provincial standards will be created, at a cost to the public good.

Through the Council of the Federation, provincial governments are already working to harmonize licensing by professional bodies to enhance labour mobility. Canada needs a transparent, incremental approach focused on particular problems rather than sweeping provisions such as those contained in the New West Partnership.

I disagree with my friend Mr. Angus when he suggests that Manitoba is not part of the West because we haven’t joined the other provinces in a bad agreement. I thought Westerners prided themselves in doing the smart thing and not jumping on a band wagon because others are. We are the west and we don’t need the New West Partnership agreement to prove it.