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WIN! Toronto city council seeks exemption from Canada-EU trade deal

Councillor Wong-Tam (left) and De Baeremaeker (and me) at a press conference outside Toronto City Hall in January. Source: Toronto Sun

Councillor Wong-Tam (left) and De Baeremaeker (and me) at a press conference outside Toronto City Hall in January. Source: Toronto Sun

In a surprising but welcome move, Toronto City Council voted tonight on a motion calling for the Ontario government to exclude Toronto from the Canada-EU Comprehensive Economic and Trade Agreement (CETA). The vote came down around 7 p.m. ET following a truly fascinating debate about free trade that included a passionate speech against NAFTA from conservative councillor David Shiner. Even the mayor, Rob Ford, voted to support the exemption — proving the issues in CETA span traditional political lines and are uniting municipalities against parts of, and in some cases all of, the deal.

Shiner told council there’s “nothing in here” (the CETA) to demonstrate big jobs and economic benefits to Toronto. He even said he’d like to see the City favouring companies in the area more often, to give them opportunities to “bid on our needs.” He admitted “I may be breaking the mold some councillors have put me in” by raising doubts about the value of free trade deals to local manufacturing.

The motion before council, which had been approved almost unanimously by Toronto’s executive committee after presentations from the Toronto Council of Canadians chapter, CAW, Canadian Environmental Law Association, USW, Toronto Food Policy Council, Good Jobs for All Coalition, and other organizations, asked for accelerated dialogue with the Province on the CETA negotiations. But an amendment from Councillor Kristyn Wong-Tam to re-include the exemption clause she originally proposed with Councillor Glenn de Baeremaeker was widely accepted by council and passed easily tonight. The new motion adds:

1. City Council request the Province of Ontario issue a clear, permanent exemption of the City of Toronto from the Canada-European Union (EU) Comprehensive Economic and Trade Agreement (CETA) and that it otherwise protect the powers of municipalities, hospitals, school boards,utilities, universities and other sub-federal agencies to use public procurement, services and investment as tools to create local jobs and otherwise support local economic development.

2. City Council request the Federal Government to protect the powers of the City – to create local jobs, protect the environment, and provide services and programs as it sees fit – from any restrictions to those powers in the CETA.

The amendment then changed clause 3 of the original motion to read:

3. City Council request the Province of Ontario to explain the scope and content of trade negotiations with the EU, including the details of its procurement, services and investment offers; and to protect City of Toronto’s interests and existing powers in any trade agreement signed between the Government of Canada and the European Union, with particular attention to:

a. The low procurement thresholds of $340,600 for goods and services and $8.5 million for construction
b. Local procurement needs
c. Dispute resolution mechanism

The strong Toronto vote for an exemption, more dialogue and more transparency is sure to cause ripples at this week’s Federation of Canadian Municipalities board meeting in Kitchener, Ontario where Canada’s lead CETA negotiator is set to brief councillors and mayors from across Canada on the state of the EU trade talks. FCM board members will also consider a motion from the Union of British Columbia Municipalities to take water services out of the CETA and other Canadian trade agreements. Maude Barlow, national chairperson of the Council of Canadians, sent a letter to all FCM board members today encouraging them to support the UBCM motion, and congratulating them for their important engagement with the federal government on the CETA negotiations.

Barlow writes:

The CETA procurement rules differ from existing procurement commitments covering municipal governments under the Agreement on Internal Trade (AIT). Perhaps most importantly, the AIT allows provinces and covered municipal entities to apply national preferences (“Buy Canadian” rules) on public contracts as long as this is done in a transparent way. Some municipalities have used this allowance to apply Canadian content quotas on major infrastructure projects such as urban transit and renewable energy. Under the AIT, municipalities can also, in some cases, apply local training or hiring quotas as well as other incentives designed to encourage local development.

This was probably the argument that swayed most Toronto city councillors since the City has many programs in place that do encourage local training, hiring and in some cases local content quotas. Federal government claims that many of these policies will be allowed as long as they do not discriminate fall flat when you consider part of the goal is to support local or national firms, or small- and medium-sized businesses through set-asides, as cities around the world frequently do with procurement.

On this CETA is very clear. Like the WTO Government Procurement Agreement on which it is based, CETA states that, “With regard to covered procurement, a Party, including its procuring entities, shall not seek, take account of, impose or enforce any offset,” where offset is defined as:

any condition or undertaking that encourages local development or improves a Party’s balance-of-payments accounts, such as the use of domestic content, the licensing of technology, investment, counter trade and similar action or requirement.

The Toronto decision today is “a wake up call” to the federal and provincial governments to engage with municipalities on the CETA issue, said Councillor Shelley Caroll during the debate from the floor. Let’s hope they do in fact wake up by taking municipalities off the table.