No winners in Saskatchewan, Alberta trade spat
It’s time for the adults to step in and pull back from the brink
First came the beer brouhaha. Now there’s a licence plate spat.
But where is the adult supervision in the escalating conflict between the Alberta and Saskatchewan governments?
Two founding members of a comprehensive economic agreement — known as the New West Partnership — now spend more time picking fights with each other than trying to figure out ways to improve cross-border trade as both economies come out of recession. It’s petty — and it needs to stop. This week provided a few insights into the escalating partisan war between Rachel Notley’s NDP government and Brad Wall’s Saskatchewan Party.
During a news conference Wednesday to talk about Alberta’s retooled carbon tax on industry, Environment Minister Shannon Phillips took a poke at Saskatchewan’s lagging economy, pointing out it is projected to “grow at significantly reduced rates.”
But that’s just political sniping between players on two different teams; things took a more serious turn later in the day.
Saskatchewan Infrastructure Minister David Marit announced he will ban Alberta licence plates on vehicles on new government highway and building project sites, affecting contractors, subcontractors and workers.
Marit insisted Saskatchewan firms face obstacles that block them from bidding on projects in Alberta, although he struggled to provide any specifics.
He pointed out local contractors pay provincial sales tax on their vehicles, while Alberta firms don’t. “This is just to level the playing field,” he said.
Under these new rules, Alberta contractors would have to get insurance and licence plates from Saskatchewan Government Insurance, as well as pay PST on their registered vehicles.
Marit conceded the new provisions may not be compliant under the New West Partnership accord signed by Saskatchewan, Alberta and B.C. in 2010.
On Thursday, Economic Development Minister Deron Bilous unloaded on Saskatchewan, saying no one in the Wall government would even return his calls about the matter. Then he drew a line in the sand. “Brad Wall is a desperate premier, their economy is in the dumps,” he said in an interview.
“We are not going to back down. They know they are not trade compliant and that’s why they have six days to come to their senses — or we will see them in court.”
But why go to court? Why not just have a showdown at high noon in the streets of Lloydminster?
This clash is not just about licence plates, however.
The two sides have been in cold war for a year over Alberta’s subsidy program for craft beer brewers. Saskatchewan joined a trade action by a Calgary company over the issue, successfully taking Alberta to an Agreement on Internal Trade panel for discriminating against out-ofprovince firms. Alberta is now appealing. Saskatchewan isn’t backing down.
“If you’re going to live by the protectionist sword, you’re also going to have to face other provinces that will stand up and defend the interests,” Wall told reporters Thursday.
Yet, aside from two partisan opponents trying to score points against each other, what is the end game in this trade tiff?
Both provinces have too much in common to keep this donnybrook going.
After the New West Partnership deal was inked, business between the two provinces shot up, creating jobs on both sides of the prairie divide.
Alberta’s exports into Saskatchewan grew 11 per cent to $12.7 billion by 2014. Saskatchewan’s exports into Alberta soared 39 per cent to $7.4 billion.
Alberta and Saskatchewan are top oil producers in the country, and have common ground on issues such as getting access to tidewater for Canadian crude and growing agri-food markets.
The partnership deal was originally billed as a comprehensive pact that would remove any remaining barriers to trade, investment and labour mobility within Western Canada.
Well, that’s some kind of partnership we’ve got today. It’s more dysfunctional than a Sopranos’ family reunion.
B.C.’s NDP government is trying to block a pipeline to the Pacific coast that would help Alberta.
Alberta is trying to offer subsidies to its craft beer industry that will hurt Saskatchewan brewers.
And Saskatchewan is trying to penalize Alberta companies and their workers over infrastructure works.
Ron Glen, CEO of the Alberta Roadbuilders and Heavy Construction Association, said if the latest changes go ahead, it will be cumbersome and increase costs for provincial contractors working next door.
He’s unaware of any Saskatchewan companies being blocked from Alberta contracts, while the Notley government denies there are any trade restrictions in place.
“We understand there’s always an interest in making sure local companies get a little bit of local work, that’s natural, but we also recognize the larger benefits of having open markets,” Glen said.
Asked why the two provinces now have such a bad relationship — in contrast to the neighbourly co-operation that has taken place over decades past — Bilous said when Wall attacks Alberta workers, “that is going to cause our relationship to be even rockier.”
“It’s no secret there’s no love lost between Brad Wall and Premier Notley,” he said.
“They have six days or otherwise there definitely will be a showdown, and Saskatchewan, I hope, they come to their senses and realize they’re picking a fight they cannot win.”
But this isn’t a fight either side can win if a trade war explodes. Tit-for-tat retaliation will hurt both provinces, including businesses and employees.
It’s time for the adults on both sides to take over.