Local municipalities discuss intra-provincial trade agreement

Town of Falher CAO Gerard Nicolet expects the TILMA agreement to be beneficial for local municipalities.

Susan Thompson
Express staff

In 2006, Alberta and British Columbia signed a groundbreaking free trade agreement.

The Alberta-British Columbia Trade, Investment, and Labour Mobility Agreement (TILMA) came into effect for the two provincial governments on April 2007. but as of Apr. 1, 2009 it will also apply to municipalities, publicly-funded academic institutions, school boards, and health and social service entities (also known as the MASH sector).

When fully implemented, the TILMA will integrate the economies of the two provinces even more than the previously existing pan-Canadian Agreement on Internal Trade (AIT), and create the second largest economic region in Canada.

“TILMA establishes some thresholds for calling for tenders for labour, services, buildings, and construction, meaning that if any municipality or provincial government calls for tenders, we have to make sure that these invitations for tenders are advertised in both provinces in a newspaper of general distribution such as the Construction News,” explains Town of Falher Municipal Administrator Gerard Nicolet.

The thresholds TILMA has set for the MASH sector are $75,000 for goods and services tenders and $200,000 for construction projects.

“Participation of the MASH sector is critical for Alberta and B.C. to fully realize the benefits of the TILMA,” said Ron Stevens, Deputy Premier and Minister of International and Intergovernmental Relations, in 2008. “Increased competition for purchasing contracts means our hospitals, schools, colleges, universities and municipal governments will be able to get the best possible price for the goods and services they need."

“It’s certainly a good move for municipalities because it will give us access to other companies that may be interested in specific projects and developments, and hopefully make the pricing more competitive.”

“Hopefully in the long run it should save us some funds,” agrees Nicolet. “I think some Alberta companies may not like that because it’s opening the door to other vendors. But from our perspective that’s a healthy situation, because there has been quite a jump in costs in past years so we have to bring that to more realistic numbers. In the end, everybody pays. We have to protect the interests of our rate payers, who are contributing to the cost of projects in many cases.”

Nicolet says the town may be doing some paving projects and water and sewer expansions this year that will exceed the TILMA thresholds.

“It still provides flexibility. The thresholds are high enough that for smaller municipalities, we still have many projects that fall below those thresholds and we won’t have to advertise in B.C.,” adds Nicolet.

M.D. of Smoky River Reeve Donald Dumont also expects that the TILMA will save the M.D. money.

“From our point of view, it might be good for our M.D. When you have more people bidding on contracts often you get a better price. But it can have a downside too, for people that are local contractors, because then there will be more competition for them also.”

Dumont and M.D. of Smoky River Municipal Administrator Lucien Turcotte say they participated in the MASH consultation process, and helped push for higher thresholds for MASH under TILMA.

“See, originally it was $100,000 [for construction]. We showed our concerns and they brought it up to $200,000.”

“It used to be $50,000 [for goods and services], they brought it up to $75,000,” Turcotte explains.

The new TILMA thresholds are still lower than the already-existing AIT agreement, which sets thresholds of $100,000 for goods and services and $250,000 for construction, and Dumont says the municipality would have liked to see even higher TILMA thresholds.

“Even though they put them that high, we would have liked to have them even higher, because it would give us more leeway for what we do. We can use local contractors for some of these smaller projects if they fit in the criteria.”

Dumont points out that there are other aspects of the agreement meant to remove trade barriers between the two provinces that could significantly affect local business.

“It’s the labour mobility that involves a lot more people. Especially tradespeople.”

The TILMA aims to harmonize all provincial rules and regulations, including trade and professional certifications.

“If you’re a schoolteacher in B.C. you’re a schoolteacher in Alberta. If you’re a welder in B.C., you’re a welder in Alberta, and vice versa,” says Turcotte. “Everything is going to be harmonized so everybody can mesh together. That’s the object of this thing. It’s not only the purchasing.”

Dumont adds the agreement will be especially significant for the Peace region because of the way the B.C. side of the Peace and the Alberta side of the Peace already work together.

“Up here’s a little different because we all work together,” he points out. “TILMA will make it easier for both sides of the Peace to act as one economic region.”

Groups such as the Council of Canadians have criticized the dispute resolution process included in the agreement, which allows governments, businesses, or individuals to challenge government measures that limit the profitability of businesses or hinder trade, even if those measures are meant to protect the environment and public health.

Complainants are allowed to seek compensation of up to $5 million for each successful challenge under the agreement. Critics say that allowing private corporations to sue governments over policy may damage democracy, and point out that other provinces have so far resisted joining TILMA or their own TILMA-like agreements for this reason.

But local municipalities say contractors who felt unfairly treated were already able to lodge complaints in the past, and doubt the dispute resolution procedure will affect local government.

“They can sue, but they have to sue the provincial government. Dispute resolution, the way I see it, will not affect the municipalities,” says Turcotte.

Further information on TILMA can be found at http://www.tilma.ca.

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