The Township of Wellesley joined 40 other Canadian cities and regions passing a motion for a proposal to exclude them from the Comprehensive Economic and Trade Agreement (CETA) with the European Union.
CETA is an inclusive free trade agreement between Canada and the EU. Negotiations first began in 2009 and are expected to finish later this year.
At Tuesday night’s council meeting, Steve Sachs, recording secretary for the Waterloo Region Labour Council , urged councillors to push the province for municipalities to be exempted from the terms of a trade deal that would have economic repercussions for food and agriculture in the region.
“We are concerned about the effects that the agreement will have on municipal procurement and our local food and farming sector,” said Sachs. “CETA would forbid the Township of Wellesley from applying offsets or conditions assigned to extract local development benefits on tenders for goods, services and construction.”
Unlike the North America Free Trade Agreement (NAFTA), CETA would bind provincial and municipal governments through its tendering provisions. These provisions would prohibit municipal governments from approving tenders of goods and services valued at more than $340,000 in favour of local or Canadian goods, services or labour said Sachs.
Under CETA, if any public institution or municipality in the region chooses to procure a portion of the foods it buys from local sources, European corporations could sue for potential lost of revenue.
“What the EU is seeking in CETA is a legal guarantee that if one of its firms puts in the lowest bid that firm will win the contract and municipal decisions to the contrary could be challenged before a trade tribunal with the authority to halt projects and over turn contracts,” said Sachs.
Municipalities may face new administration costs under the CETA agreement as they will have to provide the Canadian government with information about municipal procurement, issue bids under CETA specifications and compensate unsuccessful bidders who claim CETA procedures were not followed.
Sachs said the trade agreement was unbalanced in favour of the EU and would fundamentally change the way Canadian municipalities do business.
“An impact assessment done for the EU commission predicts one-sided gains for European construction and service firms and Canadian municipalities lose a lot of policy flexibility on spending public money, money they could use to support local employment and sustainable development.”
“This agreement scares me, especially what (Canada) is giving up procuring this. There could be a lot of damage done to the municipalities,” said Coun. Jim Olender.
CETA is designed to open up European markets for Canadian beef, pork, canola, and other commodities with the federal government claiming the agreement will add $12 billion to the Canadian economy over time.
Within southwestern Ontario the cities Guelph, Brantford, Stratford, Hamilton, Windsor, Mississauga and Toronto have all passed motions for proposals to the Ontario government to exclude them from CETA.
