Premier
Gordon Campbell has positioned BC as a global leader on climate change.
From handshakes with Al Gore and Arnold Schwarzenegger to an ambitious
plan for reducing greenhouse gas emissions by one-third by 2020, his
enthusiasm for fighting climate change is laudable.
However,
the Premier's interest in harmonizing provincial standards through the
BC-Alberta Trade, Investment and Labour Mobility Agreement (TILMA)
could prove to be a thorn in the government's side, undermining its
ability to take necessary measures on the climate change file.
The
basic problem is this: fighting climate change will necessarily involve
a lot of regulation, while TILMA is fundamentally a deregulatory
initiative.
There will be few benefits that emerge from TILMA.
While we often hear that trade and investment barriers are a major
problem undercutting our competitiveness, this is nonsense. Few
examples of trade impediments are ever offered by supporters of TILMA.
There is no evidence that any Alberta company has been stopped from
doing business at the BC border, or that they have been discriminated
against by provincial or municipal governments in BC.
What
TILMA really does is to create and codify investor rights, and provides
a mechanism for private enforcement. This has huge consequences for
public interest regulation in BC, as TILMA's private dispute panels can
award up to $5 million to an Alberta investor if a decision made by a
BC government body "restricts or impairs" their investment.
Almost
every environmental regulation restricts or impairs someone's
investment. A bold restructuring of BC into a carbon-neutral economy
will almost certainly affect the profits of Alberta's oil patch.
It
is worth recalling that because of the federal nature of government in
Canada, provinces have the right to make laws and regulations that
protect the public interest and the environment. This means that
trucking standards are more rigorous in mountainous BC than in flat
Saskatchewan - this is common sense, not a restriction on trade. In
many other areas provinces make regulatory decisions based on what
makes the most sense in the local context.
In practice, we can
expect TILMA to cast a chill over decision-making at the Cabinet table.
Already, for example, it has been reported that the BC Cabinet, in
seeking to eliminate junk food from schools, resorted to seeking
voluntary agreements with vending machine companies, rather than simply
legislating them away.
This is bad news for the government's
climate action strategy. There is still much detail to come on exactly
how BC will meet its greenhouse gas emissions targets. But regulation
will necessarily be part of a meaningful strategy.
TILMA does
provide an exemption for promoting renewable and alternative energy.
This is helpful but falls far short of what will be required. More
contentious policies that impose costs on manufacturers, such as
automotive tailpipe emission requirements or mandated use of carbon
capture and storage, could easily be open to challenge.
In these
cases, the government would have to prove that these were legitimate
measures to protect the environment and that they were not "more
restrictive than necessary" - a clause that will give Alberta investors
plenty of wiggle room for legal challenges.
In the end, kangaroo
courts, composed of corporate trade lawyers not judges, outside the
domestic legal system will have an opportunity to second-guess
democratic decision-making. Policy-makers will have to strain to make a
complicated climate action plan fit within the narrow legal gaps
allowed by TILMA.
Municipalities are already frustrated with the
Agreement, and after consulting their lawyers, voted at the Union of
British Columbia Municipalities convention to reject TILMA. Municipal
leaders across BC understand that TILMA could greatly affect their
ability to make decisions that benefit their communities.
Actions
to fight climate change at the municipal level are particularly
important as we move ahead to the 2020 target. Right now, TILMA is a
barrier to achieving our environmental goals, and should be scrapped.
Marc
Lee is a Senior Economist in the BC Office of the Canadian Centre for
Policy Alternatives. Caelie Frampton is the Campaign Coordinator of the
STOP TILMA Coalition.