Two Time Zones, One Market

Herb Nodes can almost see the Alberta border from his home in Dawson Creek, B.C., located 20 minutes west of the line on Highway 49

Dec 1, 2007  

by Derek Sankey

It’s not just the trades, though. TILMA means nurses, teachers, and any occupation with its own provincial certification can travel freely between provinces without the cumbersome paperwork and process of re-certification. Most professional designations, including groups such as engineers and accountants, are already mutually recognized across Canada. The Association of Petroleum Engineers, Geologists and Geophysicists of Alberta and the Institute of Chartered Accountants of Alberta, for example, both report that the seamless recognition of their designations across Canada is compliant with TILMA.

The labour benefit to companies is that workers in other parts of the country will have a new incentive to move west in some 100 occupations identified by the governments of B.C. and Alberta that previously faced barriers. The flip side of that is workers also as having more options, particularly in areas such as the trades, to more easily pick up and move across the border. Employers may find themselves competing with a larger group of companies hiring (if they don’t already).

The transportation and logistics industry is also feeling some initial positive effects of TILMA because transport rules are mutually recognized. However most are in a process of evaluation and review of their practices since TILMA’s laws aren’t fully binding until 2009. The rules between provinces may differ in some areas, but both are considered equal (as opposed to being harmonized).

The example of truckers driving baled hay having to stop pointlessly at the B.C.-Alberta border to shift loads in accordance with regulation is no longer applicable. Trucking companies hauling a range of loads travel freely and save on time, labour, fuel and administrative costs. Commercial vehicles no longer need additional registration and permits to carry goods across the B.C.-Alberta border.
The $5-million maximum penalty that TILMA has for non-compliance hasn’t been tested yet, but it’s another reason TILMA stands apart from the Agreement on Internal Trade (AIT) signed by all 10 provinces and (then) two territories in 1994. “Provinces began violating AIT as soon as it was signed without penalty,” says Clemens. Enforcement mechanisms that the AIT lacked are now in force under TILMA.

Design and construction firms that deal in large-scale infrastructure projects also stand to benefit from the new agreement with easier access to new markets and a level playing field for firms on both sides of the border. Crown corporations and all government agencies are working toward TILMA compliance by April 2009 so that Alberta and B.C. companies will be able to bid on an expanded range of government contracts in both provinces without preferential treatment based on geographical location.

The increased competition that businesses now face is an issue economists believe will play out as TILMA’s full force is felt between now and 2009. The threat of losing business to competitors and losing workers to industries on either side of the border is real. At the same time, access to those new markets has never been easier.

The open access and freer flow of trade between Alberta and B.C. adds to the economic clout the West holds, especially as Saskatchewan began entering its own boom in the past year. “There has been a clear, pronounced shift in economic activity from central Canada – Ontario and Quebec – to Western Canada,” says Clemens. Increased competition, while it poses some immediate challenges for business owners in retaining local clients while pursuing new ones in B.C., ultimately should stimulate further growth of both economies in the long term, including when they aren’t riding high on global commodity prices.

To the end consumer or business owner, TILMA means costs for all kinds of supplies should come down. Companies that don’t already pass the savings on to the consumer will likely be forced to do so when the full impact of TILMA is felt through competitors offering better deals made possible by new efficiencies and greater competition.

For the energy industry, TILMA means a larger single market as local presence requirements are phased out over the next nine months. B.C. companies operating and investing in Alberta, for example, are treated the same as local companies, relevant particularly to smaller oil and gas and service companies. Proponents argue that it makes no sense for provinces and companies in B.C. and Alberta to treat each other like foreign competitors by using subsidies, bureaucratic hurdles and closed procurement practices.

Governments continue to make policy and set standards in their respective jurisdictions. That will never change. The liquor industry is a prime example. In B.C., only government-owned liquor stores carry a full selection of beer, wine and spirits, whereas Alberta’s is a privatized model, on the retail end at least. Marilyn Carlyle-Helms of the Alberta Gaming and Liquor Commission says there will be no extreme changes for the industry other than some possible efficiencies to gain. “Right now, we have B.C. agents who bring their product into Alberta anyway,” she says. “What we have to do is a line-by-line [review] through our regulations to see how it impacts us. But at the end of the day, we’re not expecting any radical changes.”

What is unclear about the future of TILMA is whether more provinces – particularly Saskatchewan – will jump on board. From an economic perspective, that province holds a lot of potential in expanding the flow of trade in the West. Gartner says that if Saskatchewan embraces TILMA, it could lay the groundwork for other reluctant provinces to join. Most appear to be waiting on the sidelines to see what effect it has. “That decision could have some sway in other provincial jurisdictions,” says Gartner.

Business leaders in Western Canada, whether they fully realize it or not, are at a pivotal time as the cosy relationship the provinces have enjoyed informally for years gets substantively cosier. TILMA promises to open up new opportunities as it makes possible a larger, more competitive marketplace. “It’s just straight old common sense,” says Gartner.

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