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CETA: A Hot Topic at Gathering of Municipal Leaders

June 7, 2011

2-minute read

The Canada-EU Comprehensive Economic and Trade Agreement (CETA) was a hot topic of debate at the recent Federation of Canadian Municipalities (FCM) annual conference, held in Halifax.

Leading up to the June 3-6 conference, the Union of BC Municipalities called on the FCM to seek a “clear, permanent exemption” for municipalities” from the CETA.  In the CETA negotiations, the European Commission is seeking full coverage of sub-national (provincial and municipal) procurement, an area where Canada had, until recently, not made any commitments under international trade treaties.  In Canada, as in Europe, many important public services, such as waste, water and public transit, are delivered by local authorities.  The exclusion of local purchasing and services from the procurement restrictions of trade treaties has provided policy flexibility to use such purchasing as a tool for local economic development.  It has also reduced the risk of litigation and demands for compensation from foreign investors and service providers when privatisation schemes are halted or reversed.

The CETA negotiations pit the private interests of global service corporations against the broader public interest in preserving policy space for public services at the local level, both in Canada and Europe. Yet, surprisingly, the FCM board ruled the BC motion ineligible for debate.  This ruling was challenged from the floor and a new motion to debate an exemption from the CETA fell just short of the two thirds majority needed to overturn the board’s decision.

The willingness by a sizable majority of FCM delegates to defend progressive purchasing policies and to keep local services public is highly encouraging.  Local governments will need to take a principled stand on the CETA - not only to protect existing progressive procurement policies and local public services, but to safeguard the democratic authority of future governments.  This position got a boost when NDP leader Jack Layton told the assembled delegates that while Canada was a trading nation, “municipalities should never allow their rights to manage local services to be given away.”

On June 3, I had the privilege of speaking to a group of FCM delegates from across the country at a session organized by the Columbia Institute’s Centre for Civic Governance.  I urged the councillors to mount a strong, principled defence of local governments’ democratic authority over public purchasing decisions and the delivery of local public services.

Government procurement can be an important economic development tool, especially when used to encourage broader policy goals such as a transition to green energy.  If municipalities are covered under the CETA procurement provisions, then local governments lose a valuable policy tool for creating employment, protecting the environment and assisting marginalised groups.  The CETA’s services and investment rules would also give European multinationals new rights to demand compensation when public services are expanded or failed privatisations are reversed.  Any investment rights won by European firms will have to be extended to US investors under the NAFTA most-favoured-nation rules.

Municipal leaders at the Columbia Institute session energetically discussed strategies for putting the CETA issue back on the conference’s agenda.  Meanwhile, a strong CUPE and labour contingent was organising inside the convention centre and outside local Council of Canadians activists were leafleting and talking to delegates about the CETA.

The CETA negotiations, which began in 2009, are now entering their final stages.  In July, Canadian and European negotiators will gather in Brussels to formally exchange initial offers detailing what each party is prepared to cover under the government procurement and services rules of the treaty.  There is every reason to believe that municipalities will be included in the Canadian procurement offer and that the federal government, for the first time, is poised to fully cover drinking water and other municipal services such as waste, energy and transit.

With a federal government that is obstructing urgent efforts to combat climate change, achieve greater food security and build local economies, the role of Canada’s local governments in carrying forward solutions to these pressing challenges will be vital in the coming years.  It is essential that municipal leaders do not stand by and allow the Harper government’s aggressive trade treaty agenda to strip them of their policy flexibility and democratic authority.

Scott Sinclair is the director of the CCPA’s Trade and Investment Research Project. His remarks to the June 3 Centre for Civic Governance dialogue session will be posted to the CCPA web site shortly.

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