THE BLOG

Canadians Can't Quite Agree on an EU Trade Deal

11/29/2013 05:31 EST | Updated 01/29/2014 05:59 EST

Once every few months, the Canadian public is asked by one polling firm or another how it feels about a Canada-European Union free trade agreement. Consistently, between 70 and 80 per cent of respondents say they generally like the idea of a deal.

The Conservative government says this proves it has all the backing it needs to sign and ratify a proposed Comprehensive Economic and Trade Agreement (CETA) with the EU. In reality, this is a highly misleading statement that cannot go unchallenged.

A new Environics poll commissioned by the Council of Canadians shows that support for the idea of a Canada-EU deal is high (73 per cent), but not unconditional. In fact, when it comes to some of the details in CETA -- such as the restrictions this particular agreement will put on local communities -- the public is highly skeptical.

Our poll explained that one part of the Canada-Europe trade deal "will force Canadian municipalities to treat all bidders for public contracts equally, regardless of whether they are from Canada or from Europe." We then asked, "Do you think that Canadian municipalities should or should NOT retain the right to prefer contract bids from local or Canadian companies when spending public money?"

An impressive 77 per cent of respondents said municipalities should hold onto that right, leaving space in the future to "buy local" where it makes sense.

Why is this important? As early as May 2009, when CETA negotiations were announced in Prague, Czech Republic, we knew that public procurement -- the money spent by municipalities, provincial governments, utilities and school boards on public contracts and the goods and services they need to operate -- was the EU's top priority in Canada.

The European Commission wanted a way to win more public contracts for EU-based multinational companies, including construction, public infrastructure and engineering firms. The solution, which is hidden in CETA's procurement chapter, is to permanently block all levels of government in Canada from preferring Canadian or local companies, and make it illegal to ask bidding companies from Canada or the EU to make sure a portion of goods, services or labour used to fulfil public contracts is sourced locally.

From both the technical briefing on CETA released by the Harper government in late October and leaked reports by the European Commission, we know that the EU got everything it wanted in this respect. Prime Minister Harper and the provinces even agreed to cover most energy and mass transit spending.

This is exactly where it makes sense to use local content requirements to create jobs -- as Toronto does with subway purchases -- and where the Federation of Canadian Municipalities said cities should continue to have the right to spend money strategically. The alternative is to force local governments to choose the lowest bid every time and to give losing bidders additional ways to challenge local decisions in front of trade or investment tribunals.

The federal government and most federal agencies are already bound by these types of procurement restrictions in NAFTA. Canada is also one of about 40 signatory countries to an Agreement on Government Procurement at the World Trade Organization where, as of February 2010, provincial government spending has been limited in this way. There was virtually no public debate on whether, or to what extent, provincial governments should be covered at the WTO, though many Canadian groups, including the Council of Canadians, objected to the idea at the time.

CETA would be the first international treaty to include municipalities as well. This is something most countries, including the United States, are unwilling to do because their governments recognize the role public spending can play in creating local jobs, supporting small and medium-sized companies, and helping transition to more sustainable local economies. Local governments in the EU are also pushing for more freedom to spend public money this way just as the EU tries to restrict that freedom for its trading partners.

The Canadian public seems to recognize the value of "buy local" policies. In the poll, support for local spending preferences was highest amongst NDP supporters (87 per cent), while 71 per cent of self-declared Conservatives believe the local preferences should be protected in CETA. Even among respondents who strongly support a deal with Europe, nearly two-thirds (63 per cent) want municipal procurement taken out of the package.

Across Canada, more than 90 municipalities, school boards and municipal associations have expressed concerns about the new public spending limits in CETA. More than 50 of those municipalities, including the City of Toronto, said they want local governments to be excluded from the EU deal. On November 18, 2013, Toronto passed a second motion demanding an immediate consultation with the Province of Ontario, and a vote on whether CETA procurement rules will apply to local spending.

Our poll results show broad support for a municipal exclusion from CETA, or at the very least from its controversial procurement rules. There is also high support (80 per cent) for cross-Canada public hearings before the Conservatives can sign and ratify their EU deal, which could happen before the end of next year.

Public hearings should be the obvious next step before the Conservatives declare the CETA debate over. There is more than enough time to do this. Otherwise we might find ourselves stuck with a European trade deal no one expected or would have supported had they known all the details.

Maude Barlow is the National Chairperson and Stuart Trew is the Trade Campaigner for the Council of Canadians.