'This is a big deal': Harper 9:54

Hamilton councillor and mayoral hopeful Brian McHattie said the Canada-EU trade pact is bad for Hamilton and he's demanding once again for cities to be left out of the agreement.   

In late 2011, the Ward 1 councillor convinced the city’s general issues committee to ask the province to push for municipalities to be exempted from the deal, whose finer details are not yet known.


Ward 1 Councillor Brian McHattie says he wants municipalities to be exempt from the Canada-Europe Trade Agreement. (Samantha Craggs)

“I would like to push back on this and ask once again that municipalities be exempted,” McHattie told CBC Hamilton on Saturday, one day after Prime Minister Stephen Harper trumpeted the signing of the tentative agreement as a "historic win for Canada."

His fears about the deal, which analysts predict won’t be finalized for another two years, stem from leaked early drafts of the agreement.

The proposed rules would give companies in European Union member states unprecedented access to the procurement process for municipal contracts in Canada.

As a result, the deal would hamper job growth in Hamilton by limiting the city’s ability to give preference to local bidders, McHattie said.

Stuart Trew, a campaigner with the left-wing advocacy group The Council of Canadians, said the deal will damage local economies, including Hamilton’s.

“It’s really the last tool that cities have to encourage job creation close to home,” said the Hamilton resident. “It’s one of the biggest problems we have with this agreement.”

'At the end of the day, we’re all guessing as to how much protection will be available for cities.' —Gus Van Harten, Osgoode Hall Law School

Gus Van Harten, who teaches international law at Osgoode Hall Law School, called McHattie’s concerns “legitimate.”

Signs show that cities will be included in the deal, Van Harten said, but the extent to which European companies will have access to municipal tenders is not clear.

The final agreement could bar overseas bidders from competing for specific projects or for contracts valued below a certain dollar threshold, he said.

“At the end of the day, we’re all guessing as to how much protection will be available for cities.”

Possible trade disputes

McHattie raised the spectre of the city becoming mired in international trade disputes after the deal is finalized.

A recent World Trade Organization (WTO) decision on Ontario’s 2009 Green Energy Act, he said, highlights some of the risks municipalities would face under the new Comprehensive Economic Trade Agreement (CETA).

In May, a WTO appeals panel said the act  — the blueprint for the expansion of wind and solar power generation across the province — violated international trade rules because it discriminated against companies from Europe and Japan in favour of Ontario firms.

The legislation stipulates that 60 per cent of the goods and services in any new solar or wind power development must come from Ontario-based companies in order to qualify for provincial subsidies.

“It doesn’t just allow the countries involved — or more precisely, the companies involved — to bid on local tenders, but also to be able to challenge those decisions in the trade tribunals.”

These kinds of proceedings, added McHattie, “would be a tremendously expensive for us to respond to.”

Ontario endorses the deal

The announcement on Friday that a preliminary deal had been reached comes after five years of quiet negotiations between Canadian and EU dignitaries.

Officials say the document will reduce or eliminate tariffs on a host of goods — from cars to seafood to metals and mineral products — and allow Canadian farmers expanded access to European markets to sell grains, fruits and vegetables, and dairy products.

Related: Canada-EU free trade deal lauded by Harper, Barroso

The agreement boosts quotas on the amount of beef and pork Canadian meat producers can sell in Europe, while tariffs on European wine and spirits entering Canada will be axed.

On Friday, the Ontario government announced its support for the deal.

“Ontario job creators will see a removal of 98 per cent of tariffs,” the province said in a statement.

“This result will make Ontario companies more competitive as they sell their innovative goods and services to Europe — a market with 500 million consumers and a GDP of close to $17 trillion.”

Van Harten said he’s doubtful the agreement will yield big economic gains for most Canadian industries. And he questioned why the province is already supporting the deal when the federal government has been so tight-lipped about the details.

“The process is almost designed to allow a drip, drip, drip of information in a really controlled way,” he said.

“It doesn’t lend itself to any meaningful scrutiny.”