Saskatchewan, Alberta trade dispute risks investor uncertainty
February 20, 2018 by Jillian Morgan
Saskatchewan has lifted its ban on Alberta license plates from government road and building project sites in the province.
The decision came 12 hours before an independent panel under the New West Partnership Trade Agreement would strike a rule on the dispute.
Still, the introduction of trade barriers creates a “race” for other provinces to follow suit, said Mark Cooper, president and CEO of the Saskatchewan Construction Association.
For investors in the construction industry, and for contractors who work in multiple provinces, the ban could raise red flags. And, despite the resolution, businesses may price risk and uncertainty into bids.
“It creates an unknown circumstance,” said Cooper. “Will the trade situations in the provinces change further without notice?”
The trade agreement between Canada’s four Western provinces aims to eliminate barriers and improve access to trade, investment and labour.
A violation of free trade rules under the agreement could have left Saskatchewan with a $5-million fine.
“In the long run, that’s not good for the Western economy or for the Canadian economy,” said Cooper. “Trade barriers, whether they’re inter-provincial or international, are not helpful for economic growth and for development.”
But Cooper said the association is supportive of the Saskatchewan government implementing barriers where necessary.
Saskatchewan Premier Brad Wall introduced the ban on Dec. 6, 2017 in response to claims of similar practices on Alberta job sites.
The Saskatchewan Heavy Construction Association stated that Saskatchewan license plates were denied access in the neighbouring province.
While Cooper heard this refrain from the province’s contractors anecdotally, he was surprised to hear the claims were widespread.
“Saskatchewan contractors are not afraid to compete in a fair and reciprocal environment,” said Cooper. “Reciprocity is an important part of that.”
According to Cooper, Alberta contractors also have a “natural six-point advantage” when it comes to the use of material in Saskatchewan because the province charges a PST.
“When Alberta contractors buy material in their own province and bring it across the border, it can create an imbalance when it isn’t properly reported,” explained Cooper.
All evidence of discriminatory practices was anecdotal, and Alberta’s Minister of Economic Development and Trade, Deron Bilous, denied Wall’s claims.
In response, the Alberta government initiated a process to have the ban reviewed by the New West arbitration panel.
Prior to the suspension, Bilous stated in a Canadian Press article that Alberta’s recent beer mark-ups and rebate program, which was found to violate inter-provincial trade, would be reversed.
In a letter to Bilous on Jan. 22, Saskatchewan Trade Minister Steven Bonk said the government would suspend the license plate policy “in good faith” following Bilous’s comments.
Wall tweeted shortly after the suspension that Saskatchewan will work with Alberta to “level the playing field” for contractors in both provinces.
During a news conference, Bilous stated Saskatchewan was “grasping at straws” to find a reason to bring the ban forward.
“When you’re wrong – you’re wrong,” tweeted Bilous on Jan. 23. ”Brad Wall waited until the 11th hour to drop his ridiculous ban, which hurt businesses on both sides of the border.”
In Bonk’s letter, he stated the two provinces should meet to discuss safety course harmonization and requirements for contractors, in addition to the creation of a single resource to report issues when doing business in the neighbouring province.
“Alberta and Saskatchewan are good neighbours and good friends as provinces and these kinds of things shouldn’t happen,” said Cooper. “When they do, we have to deal with them and hopefully move on and not allow it to change the trajectory of the relationship, which has always moved our provinces closer to each other.”
- The NWPTA came into effect July 2010. Manitoba joined the partnership in January 2017.
In Alberta, a non-resident must register a vehicle if it has been in the province for over six months.
- If the ban had gone through, Alberta contractors would license their vehicle in Saskatchewan on a temporary or permanent basis.
- In March 2017, Wall offered incentives to oil companies in Calgary to relocate to Saskatchewan. He rescinded the offer when Alberta Premiere Rachel Notley threatened arbitration.
- A meeting between the two provinces was planned for Jan. 31 in the border city of Lloydminster – where resident contractors have opposed the ban – or the Saskatchewan-proposed Medicine Hat, Alta.