Thank you, Mr. Chair and members of the committee, for inviting us here to speak today on this issue. I'm going to try to keep my remarks to five or six minutes, because I know you'll be eager to move on to questions.
We are certainly pleased to be here to present the municipal perspective on this issue. I want to emphasize that our analysis of this deal and the comments I am going to be providing today really are limited to the potential implications and impacts of this agreement on municipal procurement and operations, not so much the impacts and implications of this agreement on the Canadian economy as a whole, on society, and the rest. It's certainly not the mandate of municipal governments to pass judgment on international trade agreements on those grounds. But it certainly is our members' interest to ensure that, should a federal government decide to sign a trade deal, the provisions of those deals respect municipal jurisdiction and expertise and seek to minimize cost and unintended consequences.
I would note that our president, Mayor Basil Stewart of Summerside, asked me to share with you his greetings and his regret that he could not be here to speak to you today.
As quick background, FCM has as you know been the national voice of municipal governments since 1901, and we represent over 1,800 municipal governments from coast to coast to coast, from the largest to the smallest. They include just over 90% of the population of Canada.
To take us back to the spring of 2009, Buy America became a national political priority when the town of Halton Hills, a small town just north of Toronto, grabbed international headlines with a resolution on this issue that it brought to FCM's annual conference in Whistler, in June 2009.
Until then, our view was that the Government of Canada really wasn't paying enough attention to this issue, or the attention it deserved. That resolution, as you'll recall, was supported by mayors and councillors from across the country, from across the political spectrum, and it called for action on both sides of the border. That was our focus at the time. Our members exposed the Buy America restrictions on U.S. stimulus funding that were hurting communities and the economy, reeling from the global recession. We think that resolution and the debate it set off, both nationally and internationally, set the stage for the negotiated solution we're here to discuss.
Last month we welcomed news that the U.S. administration and the Government of Canada have reached an agreement that we understand will remove Buy America's trade restrictions and that appears to allow Canadian-based companies to compete more fairly for federally funded stimulus projects and other federally funded projects in the United States.
As I said at the beginning, we're not really here to share much analysis on that side of the deal, because we're certainly not experts, as Mr. Shrybman and others are, on this deal's impact on reciprocal access to the U.S. market or the impacts of this agreement on Canadian industry.
What we want to share with you today are the recommendations we made to the Government of Canada last summer for crafting an efficient and effective trade deal from the municipal perspective. We did that by drawing on municipal experiences with the British Columbia–Alberta trade, investment, and labour mobility agreement, the TILMA agreement. It provided valuable lessons on crafting a good deal for businesses and consumers, but in particular a deal that sought to minimize disruptions and additional costs for municipal procurement and operations.
I would note here that TILMA, which is a new internal trade agreement between those two provinces, really was for the first time a trade agreement that sought to involve and include municipal procurement in the deal itself. Our members very seriously looked at the lessons we learned there and sought to apply them here. I have to say that it was with some surprise that, when we were speaking with DFAIT officials who were involved in Buy America even as late as last spring, we learned that TILMA was actually unknown to them, because of course it's not an international trade issue. But I think it's an important agreement for this committee to understand and perhaps look at later in your study.
Anyway, we certainly wanted to ensure that these lessons were applied to the Buy America negotiations. So in June of 2009 we sent a letter to then International Trade Minister Stockwell Day, and in that letter we set out six principles for the government to apply to this agreement or any future trade deal in order to minimize any unintended consequences and avoidable costs for municipal governments. These six principles are as follows.
First, there need to be reasonable procurement thresholds in any agreement. Inappropriately high or broad procurement thresholds may force municipalities to tender projects when tendering is really neither practical, financially justified, nor perhaps in the public interest. Mr. Shrybman outlined some important areas, and I will get to some more of those in a second.
Any trade deal that is going to ensure that municipal procurement policies are free-trade-compliant is going to create new costs, and these require specialized expertise to meet. The administration of these new rules needs to be streamlined. In particular, the design of these rules, in order that they be as streamlined as possible, needs to be developed in close cooperation with municipal procurement practitioners.