Public Values

Municipalities will lose power and Canadians will lose rights, public services with CETA

EU wants access to Canadian markets; Canadians want what's in the public interest.

CETA is a significant potential threat to municipal rights and local the Canadian Union of Public Employees (CUPE)

June 1, 2011: Canadians want their communities governed in the public interest. But increasingly, trade deals like the proposed Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union threaten municipal rights and powers in favour of the interests of large international corporations.

Under CETA, the European Union wants unrestricted access to provincial and local government purchasing for goods and services. If they get what they want, Canada's municipalities will be stripped of their power to implement "buy local" policies and local economic development programs. These policies and programs support local businesses and create local jobs when they award contracts for goods, services, or capital projects.

This is a big deal and Canadians should pay close attention. The European Union has a larger economy and a larger population than the United States and the Canadian government has said it wants a deal with the EU that is "more comprehensive" than even the North American Free Trade Agreement (NAFTA).

  It's clear that Canada's municipal leaders have much about which to be concerned. Unlike NAFTA, the EU deal will fully cover Canada's municipalities and provinces.

It's a particularly big deal for Canada's municipalities. Based on leaked copies of the draft text and statements by the parties, it's clear that Canada's municipal leaders have much about which to be concerned. Unlike NAFTA, the EU deal will fully cover Canada's municipalities and provinces.

Here are just a few of the main items of concern in the proposed CETA:

Purchasing and procurement

The EU has made it clear that its top priority is unrestricted access to contracts and purchasing by Canada's provinces and local governments. The total government procurement market in Canada is worth at least $100 billion per year. The EU wants to eliminate the ability of municipalities, school districts, and other local authorities to establish "buy local" or "buy Canadian" policies. This would include banning measures that protect or promote local business opportunities and local jobs when municipalities contract for goods and services. Strategic purchasing strategies that promote green jobs, anti-sweatshop guidelines, and local food policies may also be at risk.

Increased administrative costs

If the EU gains access to public procurement, municipalities may face increased costs associated with providing the federal government with information about their procurement activities: publishing detailed notices and announcements of intended procurement, issuing tenders which comply with CETA procedures, justifying procurement decisions to unsuccessful suppliers, and defending their actions before undemocratic trade bodies.

Investor rights

The parties are negotiating a dispute resolution system that will give large European corporations the right to sue Canadian governments for public policies with which investors disagree. These disputes about public policies are heard by unaccountable commercial arbitration panels rather than the courts. For local governments, such a provision threatens to put a chill on policy-making since provincial governments will be subject to lawsuits for municipal policies that European corporations don't like.

Public water at risk

Although drinking water services have been kept out of earlier Canadian trade agreements, the EU has put drinking water and wastewater services on the table. In combination with the investor rights provisions, the inclusion of drinking water and wastewater in CETA may encourage privatization of water services. Certainly, it will be much harder to bring water services back in-house if municipalities ever do contract them out. This is a major concern since privatization often leads to higher costs, less accountability, and lower quality.

Higher prescription drug costs

The EU wants major extensions to pharmaceutical drug patents, which experts predict will dramatically increase the price of drugs. The Canadian Generic Pharmaceutical Association report released in February 2011 showed that the intellectual property and patent extension demands of the EU will increase drug costs for Canadians by at least $2.8 billion per year. Drug costs are already the second highest cost for provincial health care systems. High drug costs are also a concern for all employers, including municipal governments. The last thing provincial and municipal budgets need is a further huge boost to pharmaceutical costs.

Canadian municipalities speak out

A growing number of municipalities across Canada have been raising their concerns about CETA. Some municipalities, school boards, and municipal associations have passed resolutions about CETA, including the Union of British Columbia Municipalities. CETA is a significant potential threat to municipal rights and local democracy. Let's ensure they are not traded away in these negotiations.

Related individuals, organizations and significant events
To download the leaked draft copy of CETA from Trade Justice Network, please click here.

Links and sources
  Stop trade deals that undermine local power

Posted: June 08, 2011

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