Cleaning up – or being taken to the cleaners?

When it comes to the recently announced deal on opening up the U.S. stimulus package to Canadian bids, the evidence is that Canada groveled, and then we got hosed.

By Larry Brown
National Secretary-Treasurer
National Union of Public and General Employees (NUPGE)

Ottawa (10 Feb. 2010) - What would you call a deal that’s worth tens of billions of dollars to one side (the U.S.) and might be worth as little as $4 billion to the other side (Canada)?

What would you call a deal that gives one side (Canada) temporary access to the U.S. stimulus program, but gives the other side (the U.S.) permanent access to public purchasing and spending in Canada?

Most people wouldn’t call this a brilliant bit of bargaining on Canada’s part.

When it comes to the recently announced deal on opening up the U.S. stimulus package to Canadian bids, the evidence is that Canada groveled, and then we got hosed.

No wonder this deal was struck behind closed doors. No wonder that when the deal was announced it was impossible to find out what it actually said. The Canadian government needed time to work on its spin.

Why were we even in this game to begin with?

Greed over common sense

It was a classic case of greed over good sense. Businesses in Canada saw the figure $800 billion in U.S. stimulus spending and couldn’t control their lust for a part of the action.

But good sense would have (should have) made them pause.

The economic situation in the U.S. is severe and their fiscal situation is serious. What anyone should want, both for them and all their trading partners (especially Canada), is for their economy to recover fully and completely.

But how will it help the U.S. recovery if any part of their taxpayers’ money for stimulus is spent in another country? It won’t create one job in the U.S. if American stimulus money is spent buying products or services from Canada.

Do companies in Canada really want temporary profits so badly that they’re willing to weaken the U.S. recovery to get them? That’s a small short-term gain that comes with a lot of long-term pain.

We’ve heard the cries that the Buy American provisions are “protectionism.” But to rebuild your own economy when it has collapsed is not protectionism. And it’s not harmful to the rest of the world.

Unfortunately, the term protectionism has a bad reputation. If anyone dares insist that workers' rights should be protected in trade deals, the immediate accusation of “protectionism” is sure to follow. Most of the people who use protectionism as a criticism have no real idea what it really means; they just know, for some reason, it’s a ‘bad thing’.

What we gave up

So we got access to $4 billion (although even that small amount is uncertain) in U.S. stimulus spending. But what did we give up to get that?

We agreed to the permanent opening up of provincial and municipal spending decisions to intervention from U.S. companies. And because this is all part of World Trade Organization (WTO) provisions, we’ll have to open these same decisions up to companies around the world.

Right now, Canada’s provinces and municipalities can use their own taxpayers’ dollars to buy from local suppliers, to engage local companies, to build their own regional economic base, and most importantly to deliver important public services on a public, not-for-profit basis.

We have the right to insist that our water systems stay public, that our health care remain a public, not-for-profit system, that even our liquor sales remain in public hands with the profits going to the citizens to pay for public needs.

Canada’s provinces and municipalities have the right to do all this because they never agreed to sign on to WTO rules that put all of this up to the dictates of international trade.

Yet in order to gain temporary access to the U.S. stimulus package (after most of it has already been spent) we’ll be expected to make all of these public decisions subject to the tender mercies of international commerce – the U.S. first and then everyone else.

Why is the U.S. so pleased?

It isn’t possible to say that any specific service will be forced to open up to a foreign for-profit company once we sign on to the WTO rules. We may win the right to keep some services as non-profit, publicly delivered services.

But for anyone who thinks there will be no impact on our public services, ask yourself this question: why have U.S. companies and corporate interests insisted on getting this access?

Why are they so pleased with this deal? Why do European companies so desperately want access to our provincial and municipal spending, the same kind of provision that is contained in these WTO rules?

It’s ironic that this deal may blunt the move to a new trade deal between the European Union (EU) and Canada. The EU is in those talks because they want access to provincial and municipal spending decisions, period.

They include in that the right to challenge our Crown corporations, the public enterprises that deliver electricity and not-for-profit car insurance and those that sell liquor for public and not private profit.

Now if the EU can get all this once Canada has signed the WTO provisions, their enthusiasm for a new encompassing trade deal may well fade away.

Hollow reassurances

Of course, we’ll be told that everything is fine, that there are no new threats to our public control over our economy and our public services. But we’ve been told that before.

Remember, we were told that our public health care system was protected under the North American Free Trade Agreement (NAFTA), and now a private, for-profit health care company in the U.S. is using NAFTA to challenge our right to a public, not-for-profit system.

Remember too, we were told that our economic sovereignty was safe, but then two provinces found that because of trade deals they couldn’t set up a new public auto insurance system.

We’ve cried wolf before, and every time there actually was a wolf.

None of this analysis will matter one whit to our Conservative federal government. Our current government at this point doesn’t govern for all of Canada. It is a government of business, for business, and about business interests.

This new deal with the U.S. is a classic case of Canada’s long term interests being ignored in favour of short term profits for a very few.

Provinces must intervene

It’s now up to Canada’s provinces to stop this headlong rush into surrender. They can still say no. They should still say no.

They don’t have much time to make their decision – apparently the deadline is Feb. 16.

So we have only a short window of opportunity to get them to see this deal for what it really is: one more abdication of Canada’s interests.

The white flag of surrender is only halfway up the flag pole at this point. It can still be stopped.

NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE