Alberta wants 'local benefit' criteria added to free-trade deal
With $34 billion in spending planned over five years, province wants to stimulate local economy
Officials with Alberta's department of Economic Development and Trade say they're trying to include a "local benefit" consideration as part of a new inter-provincial free trade deal agreed to in principle last week by Canada's premiers and territorial leaders.
The provision would give an advantage to companies that hire local employees when they bid on lucrative Alberta government infrastructure and service contracts.
The Alberta government has committed to spend $34 billion over the next five years to stimulate the province's struggling economy.
A "local benefit" consideration would create an exemption under the Canadian Free Trade Agreement, which is intended to expand opportunities for companies across Canada to compete for government contracts.
The new agreement will open up procurement markets to competitive bidding by Canadian businesses, Yukon Premier Darrell Pasloski, who chairs the Council of the Federation, said in Whitehorse on Friday.
"Overall, provinces and territories have agreed to substantially expand access to their individual government procurement," the council said in a news release issued after the meeting. "This will provide a more level playing field for Canadian suppliers by expanding access to contracts tendered by all levels of government, and will open up procurement markets to competitive bidding by Canadian businesses, increasing choice and value for taxpayers."
Alberta Economic Development and Trade Minister Deron Bilous said in an email statement the agreement in principle signed last week will expand Alberta trade opportunities across the country, but acknowledged more talks are in the works.
"An agreement in principle also means there is still work to do with our colleagues across the country, and details will be available in due course," Bilous said.
Getting any special dispensation under existing or future trade agreements will be extremely difficult, said Rolf Mirus, a former international business professor at the University of Alberta.
Mirus said trade agreements are designed to keep all parties on an "even keel," otherwise the whole agreement could unravel.
"The signatory to the agreement will also ask for special provisions, and then the horse trading starts all over again," Mirus said. "It can take years."
"Trade agreements in principle are beneficial to both partners, but in practice there's always somebody who faces increased competition or loses a little special privilege."
Under the current Agreement on Internal Trade, the government of Alberta is required to open up the bidding process for service projects worth more than $75,000. There is no advantage given to local contractors.
Last week, a contract worth at least $500,000 to create 14 film installations for the new Royal Alberta Museum was awarded to a media production company from the United States.
Submissions from seven Alberta companies and three other Canadian companies were rejected, in favor of the lone bid from North Shore Productions from Portland, Oregon.
Some in the Alberta film production community said the one-month period open to submit bids on the RAM contract didn't allow enough time to create a consortium.
That was a major reason why Kelly Wolfert, owner of Leven Creative production house in Edmonton, did not bid on the contract.
But Wolfert said many of his colleagues did submit bids, and the work should have stayed in Alberta.
"It's a perfect example of basically a half-million-dollar project that had the opportunity to provide an Alberta company with some economic stability for them."
Royal Alberta Museum executive director Chris Robinson said each bid was rated on experience, service delivery and price.
"We evaluated all the Alberta proposals, and in the end the proponent who rates the highest is awarded the contract."