The Provinces and Canadian Foreign Trade Policy

The Provinces and Canadian Foreign Trade Policy

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Christopher J. Kukucha

The Provinces and Canadian Foreign Trade Policy

© UBC Press 2008 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without prior written permission of the publisher, or, in Canada, in the case of photocopying or other reprographic copying, a licence from Access Copyright (Canadian Copyright Licensing Agency), www.accesscopyright.ca. 17 16 15 14 13 12 11 10 09 08

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Printed in Canada with vegetable-based inks on FSC-certified ancient-forest-free paper (100% post-consumer recycled) that is processed chlorine- and acid-free. Library and Archives Canada Cataloguing in Publication Kukucha, Christopher John The provinces and Canadian foreign trade policy / by Christopher J. Kukucha. Includes bibliographical references and index. ISBN 978-0-7748-1584-0 (bound); 978-0-7748-1585-7 (pbk.) 1. Canada – Foreign economic relations. 2. Canada – Commerce. 3. Canada – Commercial policy. 4. Foreign trade promotion – Canada – Provinces. I. Title. HF1455.K83 2008

382’.30971

C2008-903397-3

UBC Press gratefully acknowledges the financial support for our publishing program of the Government of Canada through the Book Publishing Industry Development Program (BPIDP), and of the Canada Council for the Arts, and the British Columbia Arts Council. This book has been published with the help of a grant from the Canadian Federation for the Humanities and Social Sciences, through the Aid to Scholarly Publications Programme, using funds provided by the Social Sciences and Humanities Research Council of Canada. Printed and bound in Canada by Friesens Set in Stone by Artegraphica Design Co. Ltd. Copy editor: Matthew Kudelka Proofreader: Sarah Munro UBC Press The University of British Columbia 2029 West Mall Vancouver, BC V6T 1Z2 604-822-5959 / Fax: 604-822-6083 www.ubcpress.ca

To James

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Contents

Preface / ix List of Abbreviations / xi Part 1: Systemic Factors and Canadian Federalism 1 The Role of Provinces in the Global Political Economy / 3 2 International Pressures and Canadian Federalism / 12 3 The Federal-Provincial Committee System on International Trade / 43 Part 2: Considerations of Process and Outcome 4 The Political Executive in Provincial Foreign Trade Policy / 61 5 Bureaucratic and Legislative Pressures / 81 6 Issues of Implementation, Negotiation, and Consultation / 98 7 Is Anybody Listening? Evaluating Societal Considerations / 120 8 Dominant Ideas, Ideology, and Intrusive Neoliberalism / 139 Part 3: Evaluating Regimes and Change 9 Non-Central Governments’ Cross-Border Functional Relations / 157 10 Emerging Regional Environment and Labour Regimes / 175 Conclusion / 193 Notes / 200 Selected Bibliography / 226 Index / 231

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Preface

I first started thinking about the provinces and Canadian foreign trade policy when I was a doctoral student at the University of Alberta. It was during negotiations for the North American Free Trade Agreement and the Uruguay Round of GATT, and several exceptional academics, including Douglas Brown, Earl Fry, Brian Hocking, and Hans Michelmann, were looking specifically at the role played by subfederal governments in international relations. Desperately seeking a thesis topic, I was inspired by their work. After graduation I was hired to teach at Douglas College in my hometown of New Westminster, British Columbia. Though I enjoyed my experience in the trenches of BC’s community college system, it allowed me little time for research. Only after my arrival at the University of Lethbridge in 2001 was I able to return to this topic. Over the next five years I interviewed bureaucrats and other officials in Ottawa and all ten provinces. During this period I also struggled to develop an appropriate analytical framework to engage the provinces’ international activities. This book is the outcome of that process. When something takes this long to write, there are numerous people to thank. There will also be inevitable omissions, and for this I apologize. Regardless, I was fortunate to have excellent feedback from Paul Gecelovsky, Anil Hira, Tom Keating, and Kim Nossal, who read all or parts of the first draft. Several of the chapters started out as conference papers; regarding those, I benefited from the insights of Bruce Doern, Geoffrey Hale, Harold Jansen, André Lecours, Stephen McBride, Alex Michalos, Nelson Michaud, Heather Smith, Elizabeth Smythe, Claire Turenne Sjolander, and Patrick Wilson. In addition, I thank Shauna Langemann for compiling the statistical data in Chapter 2 and Gerald Baier and Sujit Choudhry for stressing the benefit of brevity. And I am indebted to Peter Meekison and Ian Urquhart, who tutored me – a student of international relations – on the merits of federalism during my time at the University of Alberta. Finally, a number of people in government and industry reviewed specific chapters and corrected a number of mistakes. Any remaining errors are my sole responsibility.

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As a first-time author, my experience with UBC Press was extremely positive. Senior editor Emily Andrew was patient and supportive throughout the writing and editing processes and offered excellent suggestions for revising the first chapter. Matthew Kudelka, Ann Macklem, Megan Brand, Melissa Pitts, and Jason Congdon provided further assistance related to the editing and marketing of the book. The manuscript’s anonymous reviewers also offered advice that greatly improved the final result. The University of Lethbridge Research Fund and a University of Lethbridge Chinook Research Summer Award helped fund this project. Over the past several years the Forum of Federations has generously facilitated my participation in several round tables and meetings, during which I had an opportunity to broaden my understanding of federalism. An invitation by the Privy Council Office (Intergovernmental Affairs) to participate in the Fourth International Conference on Federalism in New Delhi, India, added to this experience. The final revisions for this book were completed while I was a William J. Fulbright Research Chair in Canadian Studies at the State University of New York (Plattsburgh). I thank Chris Kirkey and everyone at the Centre for Canadian Studies for providing a relaxed and intellectually vibrant work environment. On a personal level, I want to acknowledge my colleagues in the Department of Political Science at the University of Lethbridge for their dedication to teaching and research excellence. As always, my family and friends in Vancouver, Lethbridge, and elsewhere in Canada, continue to provide the wisdom and encouragement that I value so greatly. My wife Renee and son James, however, remain my main source of love and support.

Abbreviations

ACOA AEF AFPA AGO AHST AIT APEC BC-ACTS BNA BSE CAP CAPP CCA CCF CCME CCPA CCTN CEC CEDC CEPA CFFO CFTA CGLG CHST CIA CIFFC CLSC CME CNAFTN COFI

Atlantic Canada Opportunities Agency Atlantic Economic Forum Alberta Forest Products Association Attorney General’s Office Alberta Heritage Savings Trust Fund Agreement on Internal Trade Asia-Pacific Economic Cooperation BC Agri-Food Council on Trade and Subsidies British North America Act bovine spongiform encephalopathy Canada Assistance Plan Canadian Association of Petroleum Producers Consultative Committee on Agriculture Co-operative Commonwealth Federation Canadian Council of Ministers of the Environment Canadian Centre for Policy Alternatives Canadian Coordinator for Trade Negotiations Commission for Environmental Cooperation Community and Economic Development Committee Canadian Environmental Protection Act Christian Farmers Federation of Ontario Committee for the Free Trade Agreement Council of Great Lakes Governors Canada Health and Social Transfer Canadian Intergovernmental Agreement Canadian Interagency Forest Fire Centre Centre Locale de Services Sociaux et Communautaires Committee of Manufacturers and Exporters Committee for North American Free Trade Negotiations Council of Forest Industries

xii Abbreviations

COGP CSG-West CSL CSN CTTC CUPE DFAIT DFO DIIR DIST DREE DRIE EC ECE ECO EPF EU FAC FEDNOR FIRA FPCD FPU FRBC FTA FTAA FTQ GATS GATT GDA GPA IGAS IGR IJC ILO IMTC IPE ISWG ITAC ITCan ITS IWA JCPC JUVIS

Committee on Government Productivity Council of State Governments-West Consultations and Liaison Division Confédération des Syndicats Nationaux Canadian Trade and Tariffs Committee Canadian Union of Public Employees Department of Foreign Affairs and International Trade Department of Fisheries and Oceans Department of Intergovernmental and International Relations Department of Industry, Science, and Technology Department of Regional Economic Expansion Department of Regional Industrial Expansion European Community Evaluation Committee of Experts Executive Council Office [of New Brunswick] Established Programs Financing European Union Foreign Affairs Canada Federal Economic Development for Northern Ontario Foreign Investment Review Agency Federal Provincial Coordination Division Fishermen’s Protective Union Forest Renewal BC Canada-US Free Trade Agreement Free Trade Area of the Americas Fédération des Travailleurs du Québec General Agreement on Trade in Services General Agreement on Tariffs and Trade general development agreement Government Procurement Agreement Intergovernmental Affairs Secretariat Intergovernmental Relations Secretariat International Joint Commission International Labour Organization International Mobility and Trade Corridor international political economy International Strategy Working Group International Trade Advisory Committee International Trade Canada Intelligent Transportation Systems Industrial, Wood, and Allied Workers Judicial Committee of the Privy Council Joint Use Vehicle Inspection Stations

Abbreviations xiii

MABAC MAI MEDT MERD MFN MIA MIIR MIR MLB MLC MOU MRA NAAEC NAALC NAC NAFTA NAO NDP NEC NEGC NEP NFFAWU NFU NIFC NTB OAS OFA OFEC OPEC OSCIA PACE PCO PLQ PNWER POGG PPC PPCB PQ PRI PSAG SAGIT SCM SGI

Montana Alberta Bilateral Advisory Council Multilateral Agreement on Investment Ministry of Economic Development and Trade Ministry of Economic and Regional Development most favoured nation Ministry of Intergovernmental Affairs Ministry of International and Intergovernmental Relations Ministry of International Relations Maritime Lumber Bureau Midwestern Legislative Conference Memorandum of Understanding mutual recognition agreement North American Agreement on Environmental Cooperation North American Agreement on Labour Cooperation National Advisory Committee North American Free Trade Agreement National Administrative Office New Democratic Party New England Council New England Governors’ Conference National Energy Program Newfoundland Fish, Food, and Allied Workers’ Union National Farmers Union National Interagency Fire Centre non-tariff barrier Organization of American States Ontario Federation of Agriculture Ontario Farm Environmental Coalition Organization of the Petroleum Exporting Countries Ontario Soil and Crop Improvement Association Peace Arch Crossing Entry program Privy Council Office Parti Libéral du Québec Pacific Northwest Economic Region peace, order, and good government [Newfoundland] Planning and Priorities Committee Priorities, Policy, and Communications Board Parti Québécois Policy Research Institute Provinces-States Advisory Group Sectoral Advisory Groups on International Trade Subsidies and Countervailing Measures Saskatchewan Government Insurance

xiv Abbreviations

SLA SPC STEP SUFA SWEEP TCB TILMA TNO TPCLD UFA UN UNESCO UNFCC UPA USTR VQA WCER WD WGA WPC WTO

Softwood Lumber Agreement Standing Policy Committee Saskatchewan Trade and Export Partnership Social Union Framework Agreement Soil and Water Environmental Enhancement Program Trade and Competitiveness Branch Alberta-BC Trade, Investment, and Labour Mobility Agreement Trade Negotiations Office Trade Policy Consultations and Liaison Division United Farmers of Alberta United Nations UN Educational, Scientific, and Cultural Organization UN Framework Convention on Climate Change Union des Producteurs Agricoles US Trade Representative Vintners Quality Alliance Western Centre for Economic Research Western Diversification Western Governors Association Western Premiers Conference World Trade Organization

Part 1 Systemic Factors and Canadian Federalism

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1 The Role of Provinces in the Global Political Economy

Canadian provinces have long pursued a wide range of international objectives. They have sought trade and investment opportunities, opened foreign offices, and Quebec, specifically, has pursued nationalist goals related to language and culture. Recently, though, these activities have increased. In 2006, Quebec negotiated a “formal” role for itself in the UN Educational, Scientific, and Cultural Organization (UNESCO). Then in 2007, British Columbia signed a climate change agreement with California. That same year the Government of Alberta opened an office in Washington, DC, to lobby the White House and members of Congress directly. There are two different opinions on these subfederal initiatives. Some, such as Paul Heinbecker, Canada’s former UN ambassador, suggest that this activity – especially in the context of Quebec – represents a continuation of past ad hoc provincial efforts. Others, such as Andrew Coyne, have argued that the foreign presence of Canadian provinces “blurs our international identity” and duplicates the activities of federal officials at considerable expense to taxpayers.1 This book engages these arguments in the context of provincial foreign trade policy. It begins with an examination of the increasing intrusiveness of international trade commitments into domestic policy space and the impact of these changes on Canadian federalism. Canada’s membership in international trade regimes, such as the General Agreement on Tariffs and Trade (GATT), the North American Free Trade Agreement (NAFTA), and the World Trade Organization (WTO), expanded rapidly in the decades following the Second World War. Initially, these commitments did not directly include Canadian provinces. However, as issues of provincial jurisdiction were added to the international agenda – issues such as agriculture, alcohol, government procurement, energy, labour, the environment, and national health and safety standards – Ottawa became increasingly aware of the need to secure the provinces’ compliance when negotiating and implementing these agreements.

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Thus was created a new dynamic in Canada’s federal-provincial relations. The federal government expanded consultative linkages with the provinces through a series of federal-provincial committees, now known as CTrade; and to formalize ties with business it established the International Trade Advisory Committee (ITAC) and the Sectoral Advisory Groups on International Trade (SAGITs). Ottawa also began to engage non-governmental players through parliamentary committees, foreign policy reviews, and other forums. For all these changes, however, there is nothing to suggest that the federal government suffered a significant loss of autonomy owing to international pressures. Changes in the global political economy modified Ottawa’s approach to formulating trade policy, but federal officials maintained considerable independence, despite a proliferation of new and legitimate actors. Part 1 of this book focuses on these developments in relation to provincial autonomy. First, subfederal trade patterns were not significantly altered in the aftermath of GATT, NAFTA or WTO. The United States remained the dominant trading partner for most provinces and there was no transformation of Canada’s fragmented and highly specialized political economy. Historic conflicts related to fiscal policy, regional development programs, and natural resources, also reflected decentralizing trends in federal-provincial economic relations that were well established prior to these agreements. The decision to implement CTrade and previous consultative committees further demonstrated Ottawa’s trust in traditional models of “executive federalism” to manage intergovernmental relations. All of this suggests that Ottawa and the provinces relied on customary practices of Canadian federalism to counter challenges associated with the intrusiveness of foreign trade commitments. Part 2 explores the question of subfederal autonomy in terms of the provincial policy process and its capacity to directly affect outcomes related to Canada’s foreign trade relations and international norms and standards. It argues that the provinces’ trade policy choices are shaped by institutional, sectoral, societal, and ideational considerations. Institutional factors are dominated by constitutional and bureaucratic realities. Provincial executives occasionally involve themselves in trade issues, but this is limited to crisis situations, trade promotion, and specific trade disputes. Provincial legislatures have only a minimal impact in this policy area. Sectoral factors are important, though the business sector’s relevance tends to fluctuate as a function of its economic strength and ties to government. Societal factors are less relevant, typically because of “consultation fatigue” and limited resources. Ideational considerations, which are more important than sectoral ones, include dominant ideologies, the priorities of specific regional economies, and attitudes toward participatory government. Any evaluation of outcomes, however, must also address questions of change. Part 3 of this book focuses on emerging cross-border cooperative regimes

The Role of Provinces in the Global Political Economy 5

and the NAFTA “Side Deals” on labour and the environment. The provinces have enjoyed success in cross-border forums in terms of setting agendas, negotiating bilateral agreements with American states, and developing personal relationships with senior officials; however, there is no evidence that these ties are fostering deeper continental integration. The fact that these regimes continue to focus on functional issues, and rarely challenge existing regulatory practices and judicial precedent, also suggests they will not serve as catalysts for “significant” change in North American trade relations. The resilience of federal institutions in response to these developments also challenges broader assumptions regarding the “decline” of the nation-state in the contemporary international system. International Political Economy and Provincial Trade Policy An exploration of the provinces’ role in Canadian foreign trade policy is worthwhile for four main reasons. First, it will serve as a source of information for federal and provincial officials in this policy area. Also, non-Canadian practitioners will find it useful when it comes to understanding the provinces’ increasing relevance in matters of international trade. Second, this analysis will draw attention to the intrusiveness of international developments for other states in the global political economy. Ottawa faces specific constitutional realities vis-à-vis the provinces that many other federal states do not; that said, most governments find themselves confronting pressure from a range of non-central actors as trade agreements enter domestic policy space.2 Third, this study will cast light on important distinctions between issues of promotion, negotiation, and implementation. As already noted, the provinces play an active role in trade promotion, and most such endeavours are now considered a legitimate aspect of provincial economic development. Trade policy, on the other hand, is linked to provincial development, but it is also a distinctly separate matter that involves negotiating and implementing international trade agreements. Most importantly, however, this book will address the limited and institutional nature of the international political economy (IPE) literature. Specifically, there is a lack of IPE scholarship relating to the global trade relations of subfederal actors. Realist and mercantilist frameworks are state centred, focus on power relations, and tend to ignore distinctions between international and domestic levels of analysis.3 Similarly, orthodox or laissez-faire liberal models have long limited their discussion to the promotion of free markets.4 As liberalism evolved, discussions of market intervention concentrated on how to rebuild war-torn economies, which culminated in Keynesian economics and the Bretton Woods system.5 In the four decades that followed Bretton Woods, liberalism was dominated by questions of autonomy, cooperation, and emerging structures of international governance.6

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Liberalism’s interest in governance and cooperation contributed to the emergence of various regime theories in the 1980s and 1990s. Regime theory does not focus on domestic actors such as provinces; it does, though, provide insight into this book’s assertion that emerging cross-border regimes may reflect a substantial reorganization of North American economic relations. Regime-based frameworks can be power-, interest-, or knowledge-based.7 Realist (“power-based”) approaches focus on balance of power and hegemonic dominance (rather than institutionalized cooperation) as the basis of international stability.8 Neoliberal (“interest-based”) approaches represent the more mainstream assumptions regarding international regimes. Neoliberal institutionalists, for example, embrace a number of realist principles, including rationality, state sovereignty, and the relevance of anarchy. The difference is that interest-based theories portray regimes as both effective and resilient.9 Finally, there are “knowledge-based” theories of regimes, which focus on how interests originate in the policy process and on the impact of regimes in terms of the identities of international actors. These contributions fall outside the more traditional realist-liberal debate and suggest that significant change is possible.10 A small number of liberal scholars have specifically addressed the relevance of domestic actors; examples include Peter Gourevitch’s “second-image reversed” approach and Robert Putnam’s discussion of “two-level games.”11 Though it is possible to include subfederal interests in these two frameworks, neither fully engages with questions of provincial autonomy and broader issues of change. Gourevitch’s approach is essentially a statist analysis of domestic interests. Though he recognizes the impact of the bureaucracy and the importance of transnational actors, in the end he relies on a “strong state” (limited domestic influence) versus “weak state” (strong domestic influence) argument. Putnam focuses on domestic “win sets” and on the opportunities and constraints these impose on international negotiators. Some critics suggest that in doing so he has simply restated an argument commonly made by liberal scholars: that state preferences in international bargaining reflect international and domestic considerations.12 Much like Gourevitch, Putnam also tends to focus on developments taking place within states.13 Karl Polanyi folded international and domestic factors into his “double movement” theory, albeit in a much broader manner than Putnam and Gourevitch. Specifically, he critiqued orthodox liberalism and its commitment to open markets.14 For him it was imperative to consider the impact of societal factors on market forces. He argued that “society” would protect itself if faced with a market-driven crisis such as the Great Depression. John Gerard Ruggie took this argument a step further by suggesting that liberal principles are embedded in domestic societies, as are basic concepts such as security and stability. Hence the compromise of “embedded liberalism”

The Role of Provinces in the Global Political Economy 7

allowed for measures to protect domestic economies as long as these efforts did not dramatically interfere with the expansion of international trade.15 Ultimately, both Polanyi and Ruggie examined the importance of numerous domestic institutional, sectoral, and societal actors; and they did so in a way that is consistent with this book’s analysis of provincial autonomy. But unlike other contributions such as that of Putnam, Polanyi and Ruggie made no attempt to examine causal links between specific domestic and international actors. Other liberal studies have focused on the international activities of federal states.16 One early effort centred on “trans-sovereign” linkages and “perforated sovereignty.”17 These themes were subsequently explored by other scholars under the rubric of “paradiplomacy.”18 While these contributions highlighted the global role of non-central governments, they suffered from specific weaknesses. Studies of perforated sovereignty, for example, failed to adopt any explicit theoretical framework. Studies of paradiplomacy claimed that state-centred views of global politics were a “gross distortion of reality,” yet in the end they concluded that subfederal activities were limited to areas of “low politics.” Also, studies of perforated sovereignty and paradiplomacy restricted discussion to institutional factors, though John Kincaid did highlight pluralist domestic forces in his analysis of “constituent diplomacy.” Recent discussions of perforated sovereignty and paradiplomacy have embraced, albeit selectively, several of the themes that are central to this book. Francisco Aldecoa and Michael Keating have acknowledged that paradiplomacy extends beyond domestic institutional variables such as sectoral issues, institution building, and civil society. Aldecoa and Keating have offered a more holistic approach but have failed to disaggregate the policy process except to note that other domestic actors are relevant.19 André Lecours has challenged the lack of theoretical substance in the paradiplomacy literature and has argued for the adoption of an analytical framework that focuses on structure and agency. For him the key is to examine how subfederal governments are legitimized as international agents and how they pursue their objectives through “opportunity structures.”20 Ultimately, this book’s theoretical framework builds on the domestic and international insights of Aldecoa, Keating, and Lecours. It is Brian Hocking who has done the best job of integrating state and non-governmental actors into studies of international and domestic trade policy. For example, he has dismissed realist, state-centred models as inadequate but is just as critical of generalized studies of globalization that posit the death of the nation-state. He argues instead for a multiperspectival approach with the goal of understanding “the impact of influences at the systemic, state and sub-state levels.”21 Initially, he engaged this challenge by focusing on “multilayered diplomacy” and the role of non-central governments in Canada, Australia, and the United States.22 Later he isolated

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environments, agendas, and processes in an effort to better understand the nuances of trade policy at the domestic and international levels of analysis.23 This book will share many of his conclusions. However, its focus will be on distinct process factors and their impact on international norms and standards. A Review of the Canadian Literature According to Maureen Appel Molot, most studies of Canada’s foreign relations are largely descriptive.24 They generally rely on traditional approaches; they focus on Canada’s status as a principal, middle, or dependent power; and they have only implicit ties to neorealist, neoliberal, and regime-based models.25 Subsequent observers, such as David Black and Heather Smith, challenged these conclusions but acknowledged that the literature has been “marked by significant inadequacies and lacunae,” especially in terms of integrating “both domestic and international influences on the state.”26 Kim Nossal has suggested that after an initial reliance on realist models, over the past decade efforts have been made to engage broader theoretical frameworks.27 These include feminist, post-positivist, and constructivist approaches.28 Canadian scholars of trade policy have engaged liberal IPE theory to some extent. Gilbert Winham has explored the historic tension between market forces and regulatory mechanisms, arguing that the present-day complexities of international trade require better “multilateral management.”29 In his study of GATT, Frank Stone notes that this forum represents “one of the most successful efforts in international cooperation of the post-war period.”30 Other authors highlight the issue of state autonomy within these evolving governance structures. According to Sylvia Ostry, smaller states have the power to challenge economic hegemons; moreover, the success or failure of multilateral frameworks can be directly tied to domestic politics.31 Andrew Cooper, Richard Higgott, and Nossal also have noted the relevance of middlepower leadership.32 But it is Robert Wolfe who has applied theory most explicitly, in his analysis of the political economy of agriculture.33 Much like Ostry, he focuses on the relevance of international and domestic factors while adopting Polanyi’s “double movement” framework to emphasize the impact of societal pressures on market forces. Studies focusing on NAFTA, the globalization of public policy, and North American integration tend to be more theoretically developed, especially in terms of domestic factors and the adoption of regime-based frameworks. Unfortunately, most such studies tend to take a state-centred and institutional approach.34 Furthermore, it is clear that “alternative” models relating to ideas, democratization, and gender have the most explicit ties to IPE theory. At this stage, however, only minimal critical attention has been directed at Canada’s external trade relations.35

The Role of Provinces in the Global Political Economy 9

The literature on the provinces and Canada’s global trade relations is also limited. These contributions generally focus on provincial actors, questions of centralization/decentralization, and Canadian trade policy’s institutional frameworks. In one early study, Douglas Brown and Earl Fry suggested that central governments could better manage the foreign policy initiatives of provinces, states, and cantons through decentralization.36 Making a somewhat similar argument, Nossal suggested that Ottawa remained firmly in control of Canada’s global trade relations.37 Grace Skogstad, on the other hand, concluded that Ottawa and the provinces had developed a mutual dependency in terms of negotiating and implementing international trade agreements.38 Finally, Michael Hart, G. Bruce Doern, and Brian Tomlin have cited the relevance of the provinces and executive federalism in the negotiation of the Canada-US Free Trade Agreement (FTA).39 Other studies have examined a broader range of subfederal activities. Stephen de Boer has explored the potential for a greater provincial role in North American integration. Ian Robinson has suggested that neoliberal agreements such as NAFTA have exposed the vulnerability of provinces in terms of regional development programs, worker rights, environmental programs, and health regulations.40 A number of economic studies have reviewed provincial trade patterns, especially in terms of North American regional economies and the provinces’ global exports.41 These observations are important, yet no one has addressed the potential long-term impact of other non-governmental interests at the domestic and international levels. Scholars in this field tend to focus instead on institutional, bureaucratic, and constitutional factors; their studies’ links with broader debates over sovereignty and state autonomy are at best inconsistent. The literature on Quebec’s international relations is well developed but somewhat eclectic.42 There is an obvious emphasis on Quebec’s history of international activity and its linkages with France and la Francophonie.43 Other contributions have reviewed Quebec’s foreign activities in the context of autonomy and provincial representation in Canadian federalism.44 There are also numerous studies examining Quebec’s international trade policy. Ivan Bernier and André Binette, for example, completed an analysis of provincial trade policy in the aftermath of the FTA.45 In 1993, Louis Balthazar, Louis Bélanger, and Gordon Mace conducted an empirical review of Quebec’s foreign policy that included several chapters on international and regional trade.46 Others, such as Mace, Bernier, Jean-Phillipe Thérien, and Guy Gosselin, have compared Quebec’s commercial and cultural relations with those of other subfederal governments in Canada, Europe, and Latin America.47 Balthazar and Bélanger have written extensively on Quebec’s relations with the United States.48 Finally, Stéphane Paquin has reviewed the province’s decision to ratify and review international treaties in the Quebec National Assembly.49 By contrast, little or no attention has been directed at the foreign

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trade relations of other provincial governments, with the possible exception of Ontario during the NAFTA negotiations.50 Evaluating Process, Outcome, and Change This book aims to complement already existing liberal IPE frameworks by focusing more directly on issues of process, outcome, and change. In terms of international factors, the assumption made here is that Canada formulates its trade policy in a neoliberal global economy that is increasingly competitive with ongoing pressures to deregulate, privatize, and pursue further trade liberalization. At the same time, it accepts (a) that cooperation is possible in an anarchic economic system and (b) that states, including Canada, maintain the capacity to pursue autonomous decisions in international institutions and regimes. By including a review of non-governmental actors, this analysis also accepts liberal efforts to engage civil society and improve democratization.51 In terms of process, this book focuses on a weakness of liberal IPE – namely, the need to expand discussion of domestic considerations beyond institutional variables. In his review of North American integration, George Hoberg accounted for non-institutional factors with a typology that explored international-domestic linkages related to economics, politics, and culture.52 This study replaces Hoberg’s model with more comprehensive categories – institutional, sectoral, societal, and ideational – within which economic, political, and cultural considerations are relevant. In the case of Canadian foreign trade policy, domestic institutional issues include constitutional and judicial realities, the role of the executive at both levels of government, federal and provincial legislatures, bureaucratic interests, and intergovernmental relations linked to international affairs. Sectoral factors include industry associations, specific corporations, individual executives, and advisory groups, as well as their consultative links with federal and provincial departments and officials. Societal factors, which are typically treated as secondary, incorporate organized labour, environmental groups, First Nations, civil society, and a wide range of non-governmental organizations. Finally, ideational factors focus on how dominant ideas are transferred or entrenched. Dominant ideas relating to ideology, sectoral priorities in regional economies, and attitudes toward participatory government exist in every province and are relevant to a better understanding of provincial trade policy. But simply creating new categories is not enough to fully comprehend process-related issues. It is also important to recognize that domestic actors, even at the provincial level, can shape policy outcomes in both Canada and the international system. For example, the institutional policies of central and non-central governments developed by executive, legislative, and bureaucratic interests are often transferred among levels of analysis as states consult, negotiate, and implement global trade commitments. Also, many

The Role of Provinces in the Global Political Economy 11

business interests and industry associations have a presence in the global political economy that is distinct from that of the nation-state. And societal groups have sometimes developed cross-border partnerships relating to organized labour, the environment, and civil society. In other words, when evaluating the provinces’ role in Canada’s global trade relations, it is important to realize that causal relationships are “top down,” “transnational,” and “bottom up.” Wolfe has pointed out that change does not happen if institutional or nonstate actors support policy positions that the government already advocates.53 So when evaluating provincial influence, it is important to compare the provinces’ positions to that of Ottawa. The key is to seek examples of provincial pressure actually altering federal policy (as opposed to simply reflecting that policy). A core argument of this book, however, is that the emergence of multilevel governance structures is a potential indicator of change. Powerand interest-based regimes at the international level do not always require significant commitments of sovereignty; conversely, knowledge-driven approaches represent different levels of cooperation.54 Hence the existence or creation of new regimes – especially knowledge-based ones – could represent “significant” change. Finally, it is important to consider the role of social issues. Given that change can be positive or negative, it is possible that higher standards of living, subfederal governance, and the greater recognition of human rights could be replaced by weakened social, economic, and environmental standards. This book argues that states and provinces still have the capacity to formulate independent policy. Unfortunately, the policy processes of most governments, including that of Canada, often fail to place a high priority on these normative issues. By addressing a wide range of international and domestic factors, this book hopes to draw greater attention to questions of political and economic marginalization as they relate to Canada’s global trade relations.

2 International Pressures and Canadian Federalism

This chapter makes two main arguments. First, there is little evidence that intrusive international trade commitments have altered the provinces’ foreign trade relations. Indeed, trade statistics confirm the ongoing dominance of the United States as a trading partner and point to a lack of provincial export diversification. In practical terms, this encourages Ottawa to protect provinces’ interests when negotiating and implementing international trade agreements, which in turn reinforces the specialization and fragmentation of Canada’s economy. Second, the same can be said of federal-provincial economic relations in Canada. A review of fiscal policy, regional development strategies, and past conflicts over natural resources makes it apparent that decentralizing trends in Canadian federalism predate recent international trade commitments. These economic realities also contribute to the emergence of provincial dominant ideas (see Chapter 8). Evaluating Provincial Political Economies A number of different perspectives are available regarding Canada’s role in the North American economy. Some scholars, such as Stephen Clarkson, have argued for greater economic nationalism to counter threats to Canada’s economic and political sovereignty.1 In contrast, Thomas Courchene has supported a common North American currency and suggested that some provinces, notably Ontario, are now part of larger cross-border economies.2 Others, including Michael Hart, William Dymond, Daniel Schwanen, and Geoffrey Hale, have called for an incremental approach to continental integration.3 This chapter, however, supports Richard Simeon’s argument that provincial economies and the institutions of Canadian federalism are not significantly influenced by international economic pressures.4 Simeon does not propose that developments in the global political economy are irrelevant; he does, though, question the inevitability of North American integration and the erosion of the Canadian state. George Hoberg and Grace Skogstad,

International Pressures and Canadian Federalism 13

who point to the ongoing support for domestic economic interests, also support Simeon’s conclusions.5 Economic studies questioning the inevitability of integration reinforce Simeon’s argument. Of specific interest are contributions evaluating the relevance of borders to international trade. John McCallum, for example, has suggested that the Canada-US border has had a “decisive impact” on North American trade.6 John Helliwell has reached a similar conclusion, noting that Quebec trades substantially more with other Canadian provinces than with US states of similar size and distance.7 Though provocative, there are two major weaknesses with these studies. The first, which McCallum himself has acknowledged, is that both used small data samples of one to three years. Second, conclusions regarding North American Free Trade Agreement (NAFTA) were based on dated figures from only the first years of the Canada-US Free Trade Agreement (FTA). Other studies focusing on provincial trade and specific exports also point to significant subfederal autonomy. In his analysis of Alberta and British Columbia, Edward Chambers observes that both provinces rely on natural resource exports.8 Not surprisingly, these exports include energy and agriculture for Alberta and forestry and mining for BC. W. Mark Brown, on the other hand, argues that the relevance of national borders varies from sector to sector and that these variances are a result of “government imposed barriers to trade.”9 Notably, he finds that “political” considerations are “strong” in terms of food products and textiles but are absent for other sectors such as transportation equipment. Both Chambers and Brown make it clear that governments maintain the capacity to protect certain industries that the result is often missed market opportunities in the global economy. This chapter attempts to improve on past studies by examining trade data for all provinces over a thirteen-year period (1993 to 2005). These statistics, however, have specific limitations. The first relates to reliability. Provincial trade statistics are compiled by Industry Canada, and these figures combine data collected by Statistics Canada with data collected by the Census Bureau of the US Department of Commerce. The two agencies use similar methods, but there are slight differences. This is not an issue when examining aggregate trade; but when data are broken down to four-digit product codes – as they are in this chapter – inconsistencies arise in terms of collection and categorization. Another peril of comparative statistical analysis on a yearly basis is that trade relations do not march in step with twelve-month cycles. Fluctuations, therefore, often reflect statistical anomalies rather than actual changes in trade patterns. An important reality is that trade is influenced by exchange rates, inflation, and investment and production cycles, which are difficult to account for with the raw data these agencies collect. One possible solution is to review data in sets of three- to five-year averages, which would lessen

14

Part 1: Systemic Factors and Canadian Federalism

the impact of these factors. Unfortunately for this study, provincial trade statistics have only been available for slightly more than a decade, which makes long-term trends difficult to identify. Reliability issues are exacerbated when international imports are added, given that these goods are not always shipped directly from the country of origin. Trade from Mexico, for example, often first travels through the United States, which makes it difficult to evaluate the impact of national borders on trade. In addition, parts from Place A are often shipped to Place B where they are added to a product that is subsequently shipped to Place C, the final destination. Similar problems exist in tracking goods once they enter Canada. Available data suggest that Nova Scotia and BC are major importers of foreign automobiles when in fact both provinces are simply the main points of entry for vehicles from Asia and Scandinavia. Moreover, oil and natural gas pipelines can distort provincial trade statistics. Washington State, for example, is a major importer of Alberta energy, but this is due to Terasen’s Trans Mountain pipeline, which carries crude oil from Edmonton to BC. Terasen’s Express System, meanwhile, moves heavy oil from the Alberta tar sands to refineries in the US Rockies and the Midwest. A similar problem arises when examining BC’s energy exports to California; these, too, are recorded as trade with Washington State. Yet another issue is the impact of individual trade contracts on various sectors. In the 1990s, for example, one Mexican company, Avantel, purchased $178 million worth of telecommunications equipment from Northern Telecom (Nortel). Not surprisingly, Alberta’s trade with Mexico collapsed in this sector when Nortel encountered financial difficulties.10 Another example: Manitoba imported approximately $1.2 billion in airplanes in 2002 as the result of a contract that Air Canada had signed to purchase new jets. The planes were dispersed across the country, yet the sale was listed as a provincial import because Air Canada’s head offices are in Winnipeg.11 Contracts can have an even greater impact on smaller provincial economies. In Newfoundland and Labrador, for example, Iraq became the province’s primary source of imports in the late 1990s. This was due to the UN’s Oil for Food program and the province’s sale of a troubled refinery at Come By Chance. The refinery was purchased by the Swiss-based oil trader Vitol SA in 1994. Vitol held a number of permits allowing it to purchase Iraqi oil through the UN. It was interested in the refinery because oil-trading firms are only eligible to purchase crude oil from the Organization of the Petroleum Exporting Countries (OPEC) if they own refineries. The Come By Chance refinery was available and affordable.12 Another factor is that wheat-producing provinces face extremely volatile export markets. Thus in Saskatchewan and Alberta, wheat exports to China and other Asian countries collapsed in the mid to late 1990s. This was due to China’s improved transportation system, which meant it no longer had

International Pressures and Canadian Federalism 15

to rely on foreign shipments into southern Chinese ports. Indeed, China became an exporter of wheat during this period as a result of increased domestic production. Remember, though, that provincial producers do not export wheat. Canadian wheat is sold by the Canadian Wheat Board, which pursues a wide range of international markets that vary in terms of availability. This can result in sudden statistical increases, such as Saskatchewan’s emerging trade relationship with Algeria. It also accounts for historic exports to Eastern Europe and Russia, which were important markets for Canadian wheat during the Cold War. Finally, this chapter is unable to offer detailed data on provincial trade in services. Arguably, shifts in the services sector are a more accurate signifier of changes related to neoliberal international pressures. Several provinces emphasize services-based trade, including call centres and tourism. The main difficulty here is the shortage of data for provincial trade in services, especially over extended periods.13 Ontario Ontario has long dominated Canada’s export economy with shipments approaching $200 billion annually. The next largest province, Quebec, exports approximately $60 billion. Ontario’s top three export partners are the United States, the United Kingdom, and Mexico. Sales to the US peaked at approximately $193 billion in 2002. In contrast, UK and Mexican exports totalled $4.5 billion and $1.6 billion in 2005. For the most part the province’s export profile has remained stable over the past three decades. Though Ontario’s main exports are passenger vehicles and automobile parts, the province also ships large quantities of nickel mattes and nickel oxide to both the UK and Norway. Trade with the United States dominates provincial imports, with China, Japan, and Mexico consistently ranking in the top four. Other states enjoying similar import growth, albeit on a smaller scale, are Germany, the UK, Taiwan, South Korea, and Italy, whose total exports to Canada are all in the $2 billion range.14 The integration of the North American automobile industry in the 1960s created a regional economy dominated by manufacturing. As Table 1 indicates, Ontario’s motor vehicle exports represented 25 percent of the province’s total exports to the United States in 2004, with sales in excess of $46 billion. Trucks and motor vehicle parts competed for second place, at levels of $12 to $14.5 billion. In terms of imports, the province’s top three sectors between 1993 and 2003 were motor vehicle parts ($15 to $20 billion), passenger vehicles ($1.3 to $5 billion), and spark-ignition reciprocating or rotary internal combustion engines ($2 to $6 billion). Ontario’s scale of trade with Mexico has increased in the post-NAFTA era but has not significantly diversified the province’s export profile. In fact, the only sector that has enjoyed consistently high exports to Mexico since 1993

Table 1 Ontario exports to the United States – total trade (percent) Product

HS4 code

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Automobiles

8703

24.0

24.7

26.4

25.1

24.5

24.6

24.5

25.7

24.4

24.2

Vehicle parts

8708

7.0

6.9

7.1

6.9

6.8

7.6

8.3

7.8

7.7

7.1

Trucks

8704

7.2

5.4

7.2

6.8

6.9

6.9

6.9

6.0

6.0

5.1

Engines

8407

2.0

2.2

2.3

2.1

1.8

1.8

2.0

2.1

1.9

1.6

Tractors

8701

1.6

1.6

1.5

0.9

0.6

0.5

0.5

0.7

1.1

1.5

Medicaments

3004

0.4

0.3

0.2

0.3

0.5

0.5

1.0

1.1

1.2

1.5

Telephone sets

8517

0.6

0.6

0.8

0.9

0.8

0.7

0.6

0.7

1.1

1.4

Furniture

9403

1.1

1.3

1.3

1.5

1.4

1.3

1.3

1.2

1.2

1.3

Non-crude petroleum

2710

0.4

0.3

0.3

0.5

0.7

0.9

1.0

0.7

1.0

1.2

Gold

7108

1.7

1.5

1.3

1.2

1.0

1.3

1.1

1.0

0.9

1.2

International Pressures and Canadian Federalism 17

is auto parts, which increased between 1999 and 2001 from approximately $250 million to more than $400 million. Other areas of trade that already existed prior to NAFTA include transmission shafts, engine parts, moulding boxes, milk, and synthetic rubber. Sectors enjoying moderate expansion include seats, motor vehicles (since 1999), and computers. Imports from Mexico are more diversified, albeit at less significant levels, peaking at $2.5 billion in 2002. The biggest import from Mexico is motor vehicle parts, which reached a high of almost $450 million in 2001. Ontario’s trade with specific US states further strengthens Simeon’s argument. The province’s number one export destination in the United States is Michigan, which received over $59 billion in Ontario exports in 2003. This level of trade is not surprising, for two reasons. First, in almost all provinces, neighbouring US states are the primary export markets. This is due to the location of border crossings and the presence of regional transportation corridors. The second reason relates to the dominance of the automotive sector. In 2003 more than $29 billion of Ontario’s exports to Michigan were motor vehicles. The remaining top five exports were also related to the automotive industry; they included trucks and other vehicles, motor vehicle and engine parts, and seats. In the past four years, California has replaced New York as Ontario’s second major export market. Trade in motor vehicles also dominates this relationship, with close to $12 billion in exports in 2003. Quebec The United States dominates Quebec’s export profile. In 1993 that province exported $27 billion to the US, and in 2005 trade exceeded $57 billion. Quebec’s second largest trading partner is the UK, with exports peaking at $2 billion in 2000. The UK is the second largest exporter to Quebec, whose imports from Norway, Germany, Italy, France, Algeria, and China have also increased since 1992. Generally, Quebec relies on imports of crude petroleum, which is the number one shipment to that province from the UK, Mexico, Algeria, and Norway. Quebec tends to export goods in a number of areas in which it also has high imports. One example is imports of airplane and helicopter parts from the UK, which total close to $500 million. Other overlapping sectors include turbojets and turbopropellers, passenger vehicles, and circuit boards. In terms of exports to the US (Table 2), Quebec has two sectors regularly over $3 billion: helicopters and airplanes ($6 billion), and unwrought aluminum ($3 billion). Sectors in the $1 to $2 billion range include lumber, newsprint, uncoated paper and paperboard, turbojets and turbopropellers, and circuit boards. Two sectors with trade over $1 billion – electronic integrated circuits and turbojets and turbopropellers – dominate Quebec’s imports from the United States. As with its exports, Quebec’s imports have remained relatively consistent over most sectors. The only area of significant decline

Table 2 Quebec exports to the United States – total trade (percent) Product

HS4 code

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Aluminum

7601

7.6

6.4

5.7

5.1

6.4

6.1

6.8

6.8

7.4

9.9

Airplanes

8802

4.3

5.7

6.1

6.3

9.7

10.2

13.3

9.4

9.5

6.4

Newsprint in rolls

4801

5.6

5.1

4.3

3.9

4.0

3.7

3.7

3.2

3.0

3.1

Uncoated paper

4802

2.4

2.6

2.3

2.2

2.6

2.7

2.5

2.8

2.8

2.9

Turbojets

8411

2.2

2.4

2.2

2.0

2.5

2.5

2.1

2.5

2.4

2.7

Lumber > 6MM

4407

4.8

4.4

4.4

3.2

3.3

3.0

2.6

3.2

2.7

2.2

Copper wire

7408

0.1

0.4

0.4

0.5

0.5

0.6

0.5

0.9

1.2

2.1

Circuits

8542

8.5

6.8

5.1

4.3

3.9

2.5

2.4

2.5

3.2

2.0

Copper

7403

1.2

0.7

0.6

0.6

0.5

0.4

0.4

0.7

0.9

1.9

Non-crude petroleum

2710

0.7

0.5

0.5

0.8

0.6

0.7

0.9

1.1

1.6

1.7

International Pressures and Canadian Federalism 19

was a reduction of approximately $1 billion in circuit boards in 2001. As with Ontario, these changes do not represent a long-term shift in the province’s political economy. There is no evidence that NAFTA significantly altered Quebec’s export profile. Mexico is not ranked as one of Quebec’s top ten export or import destinations. In fact, only two exports are close to $60 million – unwrought aluminum and mixed alkylbenzenes. Before NAFTA, the one sector with any presence in Mexico was asbestos, but trade in this commodity reached a low of $4.3 million in 2002, down from a high of $19.7 million in 1994. Regarding imports, Quebec has diversified its trade profile, but purchases in most sectors are well below $50 million. One exception is shipments of Mexican crude petroleum. In recent decades this sector experienced a low of approximately $102 million in 1995 and a high of $950 million in 2006. New York is the main destination for Quebec exports to the United States, with sales ranging from approximately $5 billion in 1994 to almost $8 billion in 2006. Quebec has expanded its trade with a number of other states over the past decade. These include Pennsylvania, Ohio, and Texas. Vermont remains the third highest importer of Quebec goods, but trade figures with that state have declined consistently from a high of $4.7 billion in 2000. Exports of aluminum have dominated Quebec’s trade with New York since 1993, reaching more than $1.2 billion in 2006. Other key sectors include copper wire, electrical energy, and newsprint. Trade with Pennsylvania and Ohio is driven by aluminum, whereas the primary export to Vermont is circuit boards, which, however, declined from $2.6 billion in 1997 to $1 billion in 2006. The dominant export to Texas, which totalled $1.2 billion in 2001, is helicopters, airplanes, and spacecraft. Alberta Alberta’s international trade is also dominated by the United States, reaching a high of $81.2 billion in 2005. Alberta’s second largest export market is Japan, though provincial sales exceed over $150 million in only three sectors: rape or colza seed, meat of swine, and chemical wood pulp. Alberta’s trade with China has also increased due to exports of sulphur and acyclic alcohol. Exports to South Korea are dominated by one sector, chemical wood pulp, which totalled over $180 million in 2002. The province’s primary sources of imports have also remained stable, except in China’s case. In 1993 Alberta’s imports from China totalled under $34 million. By 1997 this had expanded to $81.5 million, and in 2005 trade levels reached $1 billion. France, Germany, and the UK have also steadily increased trade. Imports from Japan, on the other hand, have remained relatively stable, with only slight increases since 1992. Alberta’s exports to the US reflect the province’s long-term reliance on crude petroleum and liquefied petroleum. As Table 3 suggests, Alberta

Table 3 Alberta exports to the United States – total trade (percent) Product

HS4 code

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Crude petroleum

2709

31.3

26.3

26.1

30.2

24.7

29.1

30.7

34.2

33.8

42.3

Liquefied petroleum

2711

36.1

33.8

34.5

37.7

45.2

39.2

45.8

42.2

44.7

34.9

Ethylene

3901

1.7

1.3

1.4

1.1

1.9

2.0

2.7

3.2

3.3

3.8

Live bovine animals

0102

2.4

2.7

1.5

1.0

1.3

1.4

0.3

–

0.3

0.9

Non-crude petroleum

2710

1.0

0.9

1.0

1.3

0.9

0.6

0.7

0.6

0.7

0.9

Fresh bovine meat

0201

2.0

3.0

3.3

2.0

2.3

2.7

1.6

1.9

1.5

0.9

Wood pulp

4703

1.4

1.9

1.7

1.2

1.0

1.0

0.8

0.7

0.7

0.8

Acyclic hydrocarbons

2901

0.3

0.3

0.1

0.2

0.1

0.2

0.4

0.4

0.5

0.7

Particle board

4410

0.6

1.2

1.5

0.7

0.6

0.8

1.1

1.6

1.0

0.6

Cyclic hydrocarbons

2902

0.4

0.4

0.5

0.9

0.9

1.1

0.8

0.7

0.6

0.6

International Pressures and Canadian Federalism 21

exported roughly equivalent amounts of each product to the US until 2000; then, in 2001, sales of liquefied petroleum increased significantly. By 2006, shipments of crude petroleum had surpassed those of liquefied petroleum, totalling more than 42 percent of Alberta’s American exports. Other products, such as ethylene, have enjoyed steady growth over the past decade, reaching a high of 3.8 percent of US exports in 2006. Imports from the US are dominated by five sectors. The most consistent import is computers, with shipments above $300 million since 1998. Passenger vehicles have remained stable at approximately $200 to $300 million since 1992, notwithstanding reductions to below $100 million in 1997 and 1998. Helicopters, airplanes, and spacecraft topped $900 million in 2005. Unlike Ontario and Quebec, Alberta has increased its scale of trade with Mexico, though it is limited to a small number of sectors. Indeed, since 2000 one product group, meat of bovine animals, has dominated Alberta’s exports to Mexico. This sector has grown from less than $10 million in 1998 to more than $260 million in 2004. There are only three other sectors with exports to Mexico in the $60 to $130 million range: wheat, polymers of ethylene, and rape or colza seed. In terms of imports, Mexico is now the second leading exporter to Alberta, though it is dominated by one sector. Since 2000 Alberta has imported close to $140 million annually of “electrical apparatus” for telephones. This is significant because trade in this sector was at or below $20 million between 1992 and 1999. No other import from Mexico exceeds $40 million. Not surprisingly, Alberta’s trade with specific US states focuses on energy. In fact, more than thirty-six states import more than $100 million from the province, and thirteen of them exceed the $1 billion mark. The top three export destinations – Illinois, Washington State, and New York – are consistently at or above $6 billion. These figures are driven by imports of liquefied petroleum or hydrocarbon gases and/or crude petroleum oils. The only state near the top ten not historically dominated by oil and gas is California. Ranked eleventh, the state’s major purchases from Alberta are wood particleboard, which increased from approximately $100 million in 1999 to more than $330 million in 2004; and meat of bovine animals, with levels between $140 million and $260 million since 1997. British Columbia British Columbia has long been the least dependent province in terms of trade with the United States. Sales to the US, however, have grown considerably since 1999. In 1995, provincial exports to the US totalled approximately $14.5 billion; by 2005, however, annual trade had levelled off at about $23 billion. Exports to Japan peaked in 1995 at just over $6.8 billion before declining to $4.2 billion in 2005. Despite these reductions, Japan continues to be BC’s second largest trading partner. Another consistent provincial

22

Part 1: Systemic Factors and Canadian Federalism

export market is South Korea, with trade meeting or exceeding $900 million since 2004. In recent years South Korea has been surpassed by China, with BC increasing its exports there from about $500 million in 1994-95 to more than $1.3 billion in 2005. BC imports are dominated by the United States, with levels reaching $14.1 billion in 2005. The second major exporter to BC is Japan, with sales of about $7.1 billion in 2002. The third ranked exporter is China, which had raised its share of the provincial import market to approximately $7.5 billion by 2005. As Table 4 makes clear, a handful of natural resources dominate BC’s trade with the United States. Not surprisingly, the most important export is lumber, with trade ranging between $3 and $5 billion since 1993. The other significant export, liquefied petroleum, peaked at $3.9 billion in 2005. The most consistent import from the US dating back to 1993 is passenger vehicles, with yearly sales ranging between $200 and $500 million. Another import with steady growth since 1999 has been non-crude petroleum. Three other US imports exceeding sales of $300 million in 2005 were electrical energy, trucks, and tractors. There is little evidence that NAFTA has greatly altered BC’s trade relationship with Mexico. Mexico is currently the province’s eleventh-ranked export market, with only three sectors above $50 million: molybdenum ore, coal, and uncoated kraft paper. Mexico is BC’s fifth-ranked source of imports, though these remain at low levels. Before NAFTA, BC’s major import is motor vehicles, with shipments reaching about $80 million in 2001 before returning to $60 million in 2005. The other major import sector for BC is television receivers. Trade in this sector was around $10 million in 1993 but had expanded significantly to more than $180 million by 2005. BC’s number one export market in the United States is Washington State. Not surprisingly, trade with Washington continued to increase after BC’s sales to Japan declined. BC exports to Washington are dominated by energy and lumber. The province consistently ships roughly $2 billion in liquefied petroleum; sales of lumber range between $400 million and $650 million annually. California is the province’s second-ranked American market, accounting for close to 6 percent of provincial exports. Primary exports to California include newsprint, wood particleboard, fresh and chilled fish, lumber, and uncoated paper and paperboard, with sales between $100 and $200 million in 2005. Manitoba Manitoba’s traditional export market is the United States. Indeed, the percentage of Manitoba’s exports that went to the US increased from 62.8 to 76.3 percent between 1992 and 2003. During the same period, Japan was Manitoba’s second-ranked trading partner, fluctuating between 5 and 7 percent of overall provincial exports. The province’s primary sales to Japan

Table 4 BC exports to the United States – total trade (percent) Product

HS4 code

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Lumber > 6MM

4407

33.1

27.2

26.0

19.6

20.9

22.5

19.0

24.4

21.1

20.4

Liquefied petroleum

2711

4.8

5.9

6.3

11.0

11.9

9.2

14.6

12.0

17.1

14.3

Wood pulp

4703

5.0

3.1

3.6

3.5

2.7

2.6

2.7

2.8

2.9

3.3

Particle board

4410

1.5

1.7

2.0

1.6

1.5

1.7

3.0

3.3

2.4

2.3

Windows and doors

4418

3.0

3.7

3.9

2.3

2.5

2.6

2.3

2.3

2.2

2.3

Uncoated paper

4802

1.7

2.1

1.9

1.7

2.1

2.5

2.3

2.1

2.0

2.2

Zinc/alloys

7901

1.9

1.8

1.7

1.4

0.7

1.1

1.2

1.3

0.9

1.8

Fresh/chilled fish

0302

1.7

1.7

1.6

1.2

1.4

1.8

1.7

1.3

1.3

1.7

Newsprint in rolls

4801

3.1

2.9

2.5

2.1

2.1

1.9

1.8

1.4

1.5

1.5

Electricity

2716

1.4

1.8

2.2

8.4

9.0

1.3

1.9

1.3

2.9

1.5

24

Part 1: Systemic Factors and Canadian Federalism

are rape or colza seed ($100 to $200 million) and meat of swine (around $200 million in 2005). Manitoba consistently purchases over 85 percent of its imports from the US. China is Manitoba’s second major source of imports. Other importers to the province include Germany and Mexico. Of all Canadian provinces, Manitoba has the most diverse export profile vis-à-vis the United States (Table 5), largely because it serves as a gateway to the industrialized US Midwest. Manitoba’s top-ranked exports are crude petroleum and electrical energy, with sales of over $500 million in 2005. Other exports in the $200 to $400 million annual range include medicaments, buses, helicopter and airplane parts, motor vehicle bodies, unrefined copper, and live swine. Manitoba’s imports are equally diversified but at lower levels. The number one import is passenger vehicles, with totals between $300 and $450 million since 1992. Motor vehicle parts are also typically between $200 and $300 million. Though Manitoba’s trade with Mexico has steadily increased in the postNAFTA period, it has not dramatically altered the province’s export/import profile. Mexico is now the province’s fifth-ranked export destination, with totals climbing from 0.9 percent of overall sales in 1992 to a high of 2.6 percent in 2004. Exports are dominated by three commodities: wheat, meat of swine, and rape or colza seed. Imports also increased following NAFTA so that Mexico is now the province’s fourth-ranked importer, behind the United States, China, and Germany. Even so, the goods Mexico exports to Manitoba amount to less than $20 million annually. They include bananas, women’s and girls suits, engine parts, electric motors and generators, motor vehicle parts, furniture, and insulated wire and cable. Geography dictates that the top four US states for Manitoba exports are Minnesota, North Dakota, Michigan, and Illinois. The number one export to Minnesota is electricity, with sales peaking at $583 million in 2006. Exports of motor vehicle bodies to that state have ranged from $150 million to $250 million since 2000, up from approximately $110,000 in 1994. Motor vehicle body exports also dominate trade with North Dakota, whereas Michigan’s biggest import is unrefined copper. Manitoba’s main source of imports, across a wide range of sectors, is Illinois; in 2005 imports from that state totalled roughly $1.2 billion. Perhaps surprisingly, Manitoba imported more than $200 million in 2003 from fifteen other US states. Trade with Minnesota mainly involves passenger vehicles. Saskatchewan Saskatchewan also trades less with the United States than most other provinces. In fact, the province’s exports to the US (as a percentage of total trade) were as low as 42.5 percent in 1992, though this had increased to 65.5 percent by 2006. Historically, China has been the second-ranked destination for Saskatchewan exports, with a high of 12.4 percent in 1992. As the province’s

Table 5 Manitoba exports to the United States – total trade (percent) Product

HS4 code

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Crude petroleum

2709

8.0

5.0

7.6

7.4

8.7

9.8

6.8

5.5

7.2

8.9

Electricity

2716

5.7

5.8

5.2

5.5

7.0

5.0

3.7

5.2

7.5

7.3

Medicaments

3004

0.3

0.4

0.5

0.6

0.6

0.5

1.1

1.8

1.5

6.3

Copper

7402

3.9

5.9

5.1

2.8

4.7

5.0

4.8

3.9

3.9

4.8

Live swine

0103

3.0

2.5

2.5

2.6

3.2

3.1

3.8

4.8

5.5

4.3

Buses/transport

8702

2.7

3.0

2.4

0.03

0.02

0.1

2.0

3.4

3.1

3.1

Airplane parts

1514

4.7

7.4

7.6

4.6

5.0

3.4

2.5

2.5

2.6

2.8

Potatoes/frozen vegetables

2004

1.6

2.2

2.1

1.5

1.8

2.0

2.8

3.3

3.1

2.7

Bodies/vehicles

8707

2.9

3.1

4.0

4.7

5.6

4.1

3.3

2.6

3.0

2.6

Furniture

9403

3.0

2.9

3.0

2.9

3.5

3.7

3.6

3.4

3.1

2.4

26

Part 1: Systemic Factors and Canadian Federalism

exports to the US have increased, however, trade with China has diminished, sinking to a low of 3.1 percent in 2006. Wheat long dominated Saskatchewan’s exports to China, though sales in this sector have decreased substantially since 1996. Purchases of mineral and chemical fertilizer, on the other hand, remain high – between $300 and $435 million per year since 2000. Japan has a more stable trade relationship with Saskatchewan, importing wheat, rape or colza seed, and mineral and chemical fertilizers. When it comes to imports, however, the US dominates; close to 90 percent of Saskatchewan’s imports come from there. Table 6 makes it clear that Saskatchewan has a resource-based economy. Specifically, the province’s trade relationship with the US is based on two commodities. Exports of crude petroleum peaked at $5.8 billion in 2006. Shipments of mineral or chemical fertilizer – also a key export to China and Japan – have remained stable at approximately $1 billion since 1998. Over the past decade Saskatchewan’s third- and fourth-ranked exports to the US have been bovine animals and wheat; both, however, have declined sharply since 2003. Saskatchewan’s imports from the United States encompass a diverse range of goods; that said, the dominant products are passenger vehicles, tractors, harvesting and threshing equipment, self-propelled bulldozers, and retail pesticides. NAFTA has not significantly altered Saskatchewan’s overall trade with Mexico. In 1992 Mexico was Saskatchewan’s seventh-ranked export destination behind the US, Japan, China, Brazil, India, and South Korea. Over the following decade Mexico remained positioned between sixth and eighth, though it did climb as high as fourth in 2003. Wheat and rape or colza seed are Saskatchewan’s principal exports to Mexico, with sales in those sectors totalling more than $200 million in 2005. Saskatchewan imports a number of products from Mexico, but only three exceeded $3 million in 2005: tractors, electrical transformers, and iron and steel tubing and pipe fittings. Montana, Wyoming, and Illinois are the top three US states for Saskatchewan exports. In Montana and Wyoming export trade is tied to crude petroleum, with sales between $1 and $1.5 billion in 2005. Regarding Illinois, crude petroleum is Saskatchewan’s number one export, though mineral and chemical fertilizers run a close second, both at approximately $350 million. Minnesota is ranked fourth, with sales of crude petroleum and mineral and chemical fertilizers dominating trade. The province’s number one source for US imports is Illinois, with annual shipments between $500 and $750 million, consisting of bulldozers, threshing and harvesting equipment, and trucks. Other key exporters are Texas (more than $300 million in 2003) and Wisconsin and Iowa (around $200 million each). New Brunswick New Brunswick has significantly expanded its bilateral trade with the United

Table 6 Saskatchewan exports to the United States – total trade (percent) Product

HS4 code

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Crude petroleum

2709

34.1

26.1

29.0

41.8

36.9

36.7

46.3

48.1

49.8

55.9

Fertilizers/potash

3104

15.6

20.6

19.9

14.5

15.2

15.7

16.2

13.7

15.9

13.4

Tubes and pipes

7305

0.1

0.2

0.4

0.9

1.1

1.1

0.6

1.9

1.1

1.9

Particle board

4410

0.3

0.7

0.8

0.4

0.1

0.6

1.7

3.2

3.4

1.8

Uranium

2844

2.3

1.4

0.8

0.8

1.8

1.0

1.1

1.0

1.1

1.6

Fertilizers nitrogenous

3102

1.4

1.9

2.5

1.1

1.5

2.0

1.3

1.5

1.6

1.7

Canola and colza

1514

1.1

1.5

1.7

1.3

1.1

1.3

1.2

1.3

1.1

1.5

Live bovine animals

0102

3.7

3.0

2.3

1.3

2.8

5.4

1.1

–

1.8

1.5

Wheat

1001

4.9

4.2

4.1

2.3

3.2

3.0

0.2

0.8

0.6

1.4

Oats

1004

2.7

1.7

1.5

1.3

1.6

1.4

1.0

0.8

0.9

1.2

28

Part 1: Systemic Factors and Canadian Federalism

States over the past fifteen years. In 1992 it shipped 64.3 percent of its total exports to the US market. By 2006 this bilateral relationship had increased to 90 percent. During this period Japan was New Brunswick’s second-ranked export market, reaching a high of 7.4 percent of total exports in 1995. By 2006, however, that amount had fallen to 0.5 percent, placing Japan on par with Brazil, India, Poland, and Belgium. Trade with the United Kingdom also suffered a significant decline, from a high of 6.3 percent of total trade in 1992 to less than 1 percent in 2006. New Brunswick’s exports to the United States (Table 7) are dominated by non-crude petroleum, which totalled more than $5.6 billion in 2005. No other export regularly exceeds $550 million. Trade with Japan is on a much smaller scale, with sales of crustaceans (live or chilled) averaging between $40 and $80 million annually. Exports to the UK include chemical wood-pulp soda and newsprint. New Brunswick’s imports are more diversified relative to other Canadian provinces. US imports, for example, reached a high of 50.9 percent of total imports in 1999 before dropping to a low of 27.3 percent in 2006. Norway and Saudi Arabia have long been the province’s second- and third-ranked sources of imports, though Norway has now replaced the US in first place. The main import from the United States is live and fresh crustaceans, with sales of approximately $230 million in 2002. New Brunswick’s other bilateral relationships are dominated by crude petroleum. Imports of crude from Norway have maintained levels between $1.4 and $2.1 billion since 2000. Imports from Saudi Arabia are also now consistently in the $1.5 billion range. In 2003 Equatorial Guinea became the province’s fourth-ranked source of imports, accounting for 5.7 percent of total imports – again, this was crude petroleum. Before 2002 New Brunswick had no trade relationship with that country. Angola also became an oil exporter to New Brunswick in 2005, with sales exceeding $190 million. New Brunswick and Mexico have always had a marginal trade relationship. Indeed, Mexico does not rank consistently in the province’s top ten for either exports or imports. The two most important US states for New Brunswick exports are Maine and Massachusetts. In 2003 Maine imported $3.1 billion worth of goods from the province; $2.1 billion of this was non-crude petroleum. Exports in this sector, however, had declined to $2.4 million by 2006. Electricity, lumber, and chemical wood pulp are consistently the province’s other three main exports to Maine, with sales between $130 and $160 million. Trade with Massachusetts is also dominated by non-crude petroleum: shipments of that commodity totalled more than $560 million in 2006, with sales of crustaceans coming second at about $220 million. In terms of imports, Maine is the number one source of goods to New Brunswick, with trade ranging between $450 and $500 million; about $200 million of that consists of crustaceans. Texas is ranked second, with sales dominated by ether and ether alcohol.

Table 7 New Brunswick exports to the United States – total trade (percent) Product

HS4 code

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Non-crude petroleum

2710

29.9

19.8

22.2

30.5

41.5

41.5

47.2

48.9

58.4

57.7

Lumber > 6MM

4407

12.7

13.4

15.0

10.4

8.0

7.1

5.7

6.8

5.1

4.0

Crustaceans

0306

3.2

3.1

4.0

4.3

4.0

4.1

4.4

3.8

3.3

3.4

Coated paper

4810

8.8

11.4

9.5

8.6

4.3

4.4

4.9

4.0

0.6

2.9

Uncoated paper

4802

1.5

2.0

1.4

1.4

2.7

2.8

2.0

2.3

3.1

2.7

Liquefied petroleum

2711

0.1

0.1

0.09

1.1

1.2

1.2

1.2

1.4

1.9

2.1

Windows and doors

4418

0.3

0.6

1.2

1.1

1.1

1.3

1.6

2.2

1.9

1.8

Petroleum coke

2713

1.3

1.0

0.6

0.9

0.9

0.8

1.2

1.6

1.0

1.6

Chemical wood pulp

4704

1.8

2.3

2.0

2.3

1.8

1.4

1.7

1.4

1.2

1.4

Crustaceans/prepared

1605

2.0

2.1

2.3

2.3

2.1

1.9

1.8

1.4

1.4

1.4

30

Part 1: Systemic Factors and Canadian Federalism

Nova Scotia Nova Scotia has shipped between 75 and 80 percent of its total exports to the United States since 1999. Until recently, Japan was the second-ranked export destination with shipments consistently falling between 2.3 and 4.5 percent. In 2006, Japan gave way in second place to the United Kingdom, which accounted for 3.1 percent of total sales. Rounding out the top five export destinations for Nova Scotia are China, France, and India. Exports to the US are dominated by liquefied petroleum, with sales between $0.8 and $1.3 billion since 2000 (see Table 8). Interestingly, there was almost no bilateral trade in this sector before 1999. The second major export to the US is pneumatic tires, at $650 to $700 million. Historically, the UK’s imports from Nova Scotia have included chemical wood-pulp soda. Chemical woodpulp soda and molluscs dominate exports to France. Imports to Nova Scotia, as with New Brunswick, reflect a lack of reliance on the United States. In fact, Germany is the number one source of provincial imports, with totals ranging between 25 and 30 percent since 1999. The UK, which has consistently shipped between 13 and 15 percent of Nova Scotia’s overall imports, ranks second. Norway, Sweden, and Cuba follow, accounting for between 4.9 and 8.1 percent of Nova Scotia’s imports in 2006. The US is now ranked ninth, with levels dropping to 4.1 percent in 2006. Imports from Germany and Sweden are overwhelmingly dominated by passenger vehicles and automobile parts. These statistics are somewhat misleading, however, given that Nova Scotia is the point of entry for European producers such as Mercedes Benz, Saab, and Volvo. Imports from the US are more diverse, including non-crude petroleum, passenger vehicles, and machinery. NAFTA has not increased Nova Scotia’s trade with Mexico. Exports to Mexico have ranged between 0.1 and 0.9 percent of overall exports since 1998. Mexico is also not one of the top ten importers to the province. Nova Scotia’s number one export destination in the United States is Massachusetts, with trade exceeding $1.8 billion in 2005. The two sectors that dominate this relationship are liquefied petroleum and crustaceans, with sales of approximately $1.3 billion and $500 million respectively in 2005. The only other US state with provincial exports over $200 million is South Carolina, which imported more than $355 million from Nova Scotia in 2005, consisting primarily of tires. Other top export destinations include Michigan (tires), Texas (crude petroleum), and Maine (crustaceans). Given the less than dominant import relationship with the United States, Nova Scotia has an eclectic range of US trading partners, including Texas, Louisiana, Connecticut, California, and Ohio. Imports from all of these states, however, do not exceed $100 million in any sector.

Table 8 Nova Scotia exports to the United States – total trade (percent) Product

HS4 code

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Liquefied petroleum

2711

0.03

–

–

18.1

24.9

16.9

25.3

23.1

28.7

22.0

New tires of rubber

4011

22.5

21.6

21.2

17.8

14.7

16.9

14.4

15.1

14.5

17.9

Crustaceans

0306

5.7

6.3

7.1

6.8

7.6

8.8

8.8

8.2

7.1

8.0

Lumber > 6MM

4407

3.6

5.6

7.9

5.6

4.2

4.8

3.6

5.0

4.5

4.8

Non-crude petroleum

2710

0.5

1.4

0.9

0.9

2.0

1.1

1.5

3.1

1.0

3.0

Chemical wood pulp

4703

1.5

1.1

1.8

2.7

2.7

2.8

2.7

2.6

2.0

2.9

Gypsum

2520

2.6

2.5

2.7

2.2

1.7

1.5

1.5

1.8

2.0

2.2

Vehicle parts

8708

0.1

0.3

0.7

1.1

1.5

1.8

1.8

1.9

1.8

2.1

Fresh/chilled fish

0302

2.5

2.6

2.3

2.3

2.0

2.2

1.9

1.7

1.7

2.0

Molluscs

0307

3.9

3.8

3.5

3.4

2.3

2.7

2.2

2.1

1.6

1.9

32

Part 1: Systemic Factors and Canadian Federalism

Prince Edward Island The most significant difference between PEI and other Canadian provinces is its small scale of trade. The United States dominates the island’s exports. PEI’s bilateral relationship with the US has increased significantly since 1992, when trade totalled less than 60 percent of PEI’s exports. Since 2000, sales to the US have reached levels close to 90 percent, reducing all other markets to 1.5 percent or less. As with other provinces in Atlantic Canada, Mexico is not ranked in the top ten. PEI’s exports to the US are dominated by frozen potatoes, which account for $150 to $200 million in sales, and live crustaceans, which account for $50 to $100 million (Table 9). Fresh potatoes and molluscs were between $35 and $45 million in 2005. PEI has also developed an export market in turbojets and turbopropellers, though this declined to $18 million in 2005 from a peak of $30 million in 2001. In terms of US states, PEI exports most of its goods to Massachusetts and Maine. Once again, potatoes and crustaceans dominate that trade. In terms of overall imports, PEI relies on the United States, though sales are tied to a diverse range of goods. In 2005 the province imported $21 million in electric generating sets. Trade in that sector did not exist prior to 2004. The other primary import in 2005 was fertilizer ($8 million). Other sectors below $1 million included seeds, fruits and spores, liqueurs and spirits, parts for machinery, harvesting and threshing equipment, and transmission shafts. Only two countries accounted for more than 1 percent of PEI’s total imports in 2003. France was the source of 1.3 percent of PEI’s imports, mainly exported grape wines, with some additional trade in spirits and liqueurs. Mexico is a top ten exporter to PEI; however, the raw figures are low – only $480,000 in 2005. The two dominant imports from Mexico are beer, and spirits and liqueurs. Florida is consistently the number one US importer to PEI, with totals of almost $10 million in 2004. This trade consists almost entirely of fertilizer. In 2006 Maine was the only other state to sell more than $1 million of goods to the province. Newfoundland and Labrador Newfoundland and Labrador also relies on trade with the US market, though not as much as other provinces. In 1992, Newfoundland shipped 50.7 percent of its total exports to the United States. In 2002 bilateral trade with the US peaked at 74.2 percent before declining to 55 percent in 2006. In the early 1990s Japan and the United Kingdom were the second-ranked destinations for the province’s exports; they were later replaced by China and Germany. Shipments to the US are dominated by crude and non-crude oil, with annual sales of over $1 billion (Table 10). Crustaceans (live, fresh, chilled, or frozen) and newsprint are the other two major US imports from Newfoundland, with trade between $200 and $400 million. Exports to the UK were once dominated by iron ore and newsprint; now they are dominated by

Table 9 Prince Edward Island exports to the United States – total trade (percent) Product

HS4 code

1997

1998

1999

2000

2001

2002

2003

Potatoes/frozen vegetables

2004

28.1

28.2

28.8

29.2

35.8

28.3

30.7

Crustaceans

0306

11.5

13.3

17.4

16.0

14.4

20.1

Potatoes/fresh

0701

7.8

9.7

7.2

4.0

2.3

Textured protein

2106

–

–

2005

2006

30.7

26.1

27.8

16.9

13.7

13.5

12.4

4.8

5.8

3.5

5.2

7.1

–

–

–

–

0.02

3.7

6.6

Crustaceans prepared

1605

8.1

8.6

8.9

9.0

6.4

8.1

6.4

6.9

7.2

5.9

Turbojets

8411

4.9

5.4

3.9

7.1

5.0

4.0

4.1

2.4

2.8

4.7

Molluscs

0307

5.0

5.2

4.3

4.8

5.1

5.0

5.1

4.6

4.7

4.0

Parts of rail vehicles

8607

–

0.2

0.8

0.6

0.1

0.8

1.4

3.2

2.8

2.2

Diagnostic/lab reagents

3822

1.7

1.6

1.7

1.1

0.8

1.1

1.4

2.1

2.0

2.2

Lumber > 6MM

4407

3.2

4.4

4.1

2.4

2.0

2.1

2.0

2.9

2.4

1.3

0.01

2004

34

Part 1: Systemic Factors and Canadian Federalism

non-crude petroleum. China has become the province’s second-ranked export market; in 2005 it purchased $215 million of iron ore and $125 million of crustaceans. Germany has long imported Newfoundland’s newsprint; since 2000, however, it has been importing more iron ore – about $364 million worth in 2005. Mexico is not ranked in the top ten for provincial exports. Newfoundland’s import profile is unique among Canadian provinces in that the United States has never accounted for more than 20 percent of its imports; in 2005 that figure fell as low as 7.9 percent. Other governments have dominated imports on a cyclical basis. For example, Russia increased its trade from virtually zero in 1992 to over 20 percent of provincial imports the following year. In 2005 Russia was the province’s second-ranked importer, accounting for 13.4 percent of trade; however, this declined to 2.9 percent by 2006. Since 2000 the number one importer to Newfoundland has been Iraq, which in 2006 accounted for 57.6 percent of the province’s imports – exceeding $1.6 billion. A close examination of Newfoundland’s imports makes two things clear: they are dominated by crude petroleum from the US, Russia, and Iraq; and contracts and individual firms have a strong impact on this small provincial economy. As with the other Atlantic provinces, Mexico was not ranked in the top ten for provincial imports. Regional Economies, Provincial Priorities, and Canadian Trade Policy The above discussion makes it clear that definitive provincial economies exist within Canadian federalism. The question is whether the provinces’ economic priorities have shifted dramatically in response to rising pressures from international markets. It would be a mistake, for example, to argue that global economic developments have had no influence on provincial trade and investment strategies. To do so would be to ignore the fact that Canadian provinces are integrated in different ways into continental and global political economies. This became evident during the 1970s, when the OPEC oil crisis made it obvious that Canada lacked a national economic strategy. These tensions and divergent priorities are equally important today. Some observers have argued that these differences have heightened competition among the provinces as they pursue trade and investment goals; usually in the form of tax concessions, “soft” loans, and other incentives. It has also been pointed out that cross-border regional economies, such as Cascadia (i.e., the Pacific Northwest) and the Great Lakes Basin, reinforce diversified subfederal economic interests.15 The preceding review of provincial trade statistics, however, challenges the assumption that external pressures define subfederal trade relations. First and most important, divergent provincial and regional economic interests have long been an element of Canadian federalism. These cleavages predate

Table 10 Newfoundland and Labrador exports to the United States – total trade (percent) Product

HS4 code

1997

1998

1999

2000

2001

2002

Non-crude petroleum

2710

46.2

28.3

35.5

39.6

44.6

27.3

Newsprint in rolls

4801

18.1

17.9

15.0

12.5

15.3

Crustaceans

0306

3.3

7.2

12.8

9.3

Crustaceans prepared

1605

1.3

2.7

2.8

Crude petroleum

2709

–

13.2

Iron ores

2601

19.4

Fish fillets

0304

Fresh/chilled fish

2003

2004

2005

2006

44.1

54.6

71.6

74.2

9.2

6.3

6.9

6.1

7.6

12.6

7.6

10.8

11.2

7.6

5.5

2.2

2.6

1.5

1.0

1.5

3.0

1.9

15.1

21.6

10.0

46.8

28.7

14.2

–

1.6

17.0

6.3

5.0

3.7

0.8

0.9

1.8

1.7

1.2

3.8

5.2

4.8

3.2

3.7

2.1

2.5

2.4

2.0

0.8

0302

0.1

0.1

0.1

0.1

0.2

0.2

0.3

0.3

0.5

0.8

Fish/caviar

1604

0.7

0.6

0.6

0.4

0.7

0.5

0.6

1.2

1.1

0.6

Molluscs

0307

1.5

0.6

0.2

0.2

0.1

0.07

0.02

0.1

0.1

0.2

36

Part 1: Systemic Factors and Canadian Federalism

recent international developments and reflect subfederal political economies entrenched over several generations. In the case of BC, North America is increasingly replacing the Pacific Rim as an influence on that province’s trade relations; however, there is no evidence that this has dramatically altered sectoral priorities. For example, BC has succeeded in developing new “niche” markets in the technology sector, but these industries are not reflected in provincial trade statistics, which continue to be dominated by softwood lumber and liquefied petroleum. Alberta has consistently relied on energy and agriculture, with international trade dependent on access to the North American market. The province has also attempted to increase trade with the Pacific Rim, albeit with limited success.16 Ontario has long depended on the US market, but it also has a more diversified economy than either BC or Alberta. Besides sectoral trade in automobiles, transportation equipment, and telecommunications, Ontario has an extensive export profile that reflects its strong manufacturing base. Quebec’s economy is not as diversified, but it, too, has escaped reliance on one or two primary sectors. The province exports energy and pulp-and-paper products (including newsprint, coated and uncoated papers, chemical pulp, specialty papers, and softwood lumber). Quebec is also home to a number of transportation and aeronautics corporations, software services, industrial equipment manufacturers, and specialty food producers, as well as consulting engineering firms and other professional services. At the same time, however, Quebec faces greater liberalization in previously protected areas, such as textiles and the dairy and poultry sectors. Some observers question just how different Canada’s provincial and regional economies are from one another; the point here is that each of Canada’s provinces has long had its own distinct economic priorities. Not surprisingly, the fragmented nature of Canada’s economy has had a direct impact on Canadian foreign trade policy. It follows that provincial sectoral interests can provide us with insight into this country’s inconsistent position on liberalization. Energy providers in Alberta want greater market access to the US as well as increased trade liberalization. Ontario’s automotive sector desires freer trade, but only under strict rules of origin as set down in the Auto Pact and NAFTA. The aeronautics industry in Quebec demands protectionism – an approach that is already being challenged by other states, such as Brazil. Canada’s softwood lumber exports are so contentious that they are purposely omitted from foreign trade agreements, leaving the issue to be resolved through federal-provincial consultation, Canada-US negotiations, and international dispute settlement mechanisms. Finally, there is the reality that regional sectoral interests are not monolithic; different producers in a given sector often have divergent goals. The result is a complicated policy process in which multiple state and non-governmental actors compete for influence.

International Pressures and Canadian Federalism 37

The Economic Decentralization of Canadian Federalism Questions of economic centralization and decentralization have arisen in the Canadian federalism literature for generations.17 More recently this debate has shifted to include international considerations. Ian Robinson has suggested that intrusive international pressures have the potential to centralize Canadian federalism as Ottawa seeks to guarantee provincial compliance with international trade commitments.18 Courchene has pointed to the benefits of North American integration. Others, such as Garth Stevenson, have noted the relevance of provincial jurisdiction in international negotiations.19 The rest of this chapter briefly explores these questions in relation to fiscal policy, regional and industrial development strategies, and natural resources. In doing so, it supports the argument that provincial economic autonomy was established prior to recent intrusive neoliberal pressures. The Relevance of Fiscal Policy Regarding taxation, Ottawa historically controlled a highly centralized system, one that allowed for redistributive transfers to the provinces. In 1957 a series of “tax rental” agreements were negotiated that introduced a taxsharing arrangement based on taxes collected within specific provinces. In 1962 the Federal-Provincial Fiscal Arrangements Act replaced the previous tax rental arrangement. Under the new system, Ottawa transferred personal income taxation to the provinces. Since then, fiscal relations in Canada have been based increasingly on the transfer of “tax room” to the provinces.20 Additional tax points were transferred in 1967 in lieu of previous cash transfers for post-secondary education. In 1977 this process culminated in the establishment of Established Programs Financing (EPF), which granted further tax room to the provinces. Besides new tax-collection agreements, Ottawa initiated an increasingly decentralized approach to federal-provincial shared-cost programs. After the Second World War the federal government offered a series of conditional grants to persuade the provinces to establish programs for public health services, welfare assistance, and health care. “Cost matching” ensured that Ottawa would reimburse the provinces 50 cents for every dollar spent provided that federal standards were met. In the 1960s new programs for medical care and welfare assistance were introduced; once again, these were funded by conditional grants. This time, however, owing to the provinces’ demands for flexibility, the conditions attached to these funds, under the Canada Assistance Plan (CAP), were less rigorous. In 1977 the EPF granted further tax points to the provinces but also established a series of “block grants” for health care that came with even fewer conditions for provinces. The existing CAP program was not altered by the EPF.21 The 1981 federal budget initiated a reduction in EPF funding. This reduction would remain in place for the next fifteen years. As well, CAP suffered

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a significant reduction in federal contributions during the 1990s. In 1996, as part of a consolidation effort, health, education, and social assistance were combined in a new block-funding arrangement known as the Canada Health and Social Transfer (CHST). The CHST put an end to the EPF and CAP. Under the new regime, the provinces were given flexibility for program delivery; also, most funding was replaced with expanded tax room, which meant that the provinces would be paying for services by occupying departed federal tax space. Almost immediately, there erupted a series of federalprovincial disputes over social programs. One of the most controversial involved Alberta premier Ralph Klein’s decision to offer his province’s welfare recipients one-way bus tickets to BC. The BC government responded by imposing residency requirements, which Ottawa then prohibited. In response to this and other developments, in 1999 funding for the CHST was changed to a per capita basis.22 Health care remained a significant issue after the CHST was implemented. Ottawa insisted on national standards as outlined by the Canada Health Act (it did not insist on this for social assistance programs). Not surprisingly, the provinces were less than enthusiastic about this, especially given that public discontent over health care was often directed at provincial governments. The ensuing controversy led to the Social Union Framework Agreement (SUFA), signed in February 1999. This agreement did not allow provinces to opt out of programs; however, it did lead to a federal-provincial health accord, signed in September 2000, that committed Ottawa to $15.5 billion in increased spending in 2000, $18.3 billion in 2001, and a total of $21 billion by 2005. A subsequent health deal negotiated in February 2003 increased that figure to $27 billion.23 Despite these changes, Alberta, BC, and Ontario imposed individual health-care premiums tied to income; these were designed to pressure Ottawa for greater funding.24 In February 2006 the Liberal government of Quebec announced that it would pay for certain private surgeries (namely, cataracts and joint replacements) if the public system could not provide adequate service within six months. This program was in response to an earlier 2005 Supreme Court ruling, Chaoulli v. Quebec (Attorney General), that endorsed the funding of medical procedures by private health insurance after reasonable wait periods had passed.25 Opponents of the plan contended that it violated the Canada Health Act, but there was limited opposition from the new Conservative government of Stephen Harper.26 A month later, Alberta announced further health-care reforms that even Klein conceded might violate the Canada Health Act.27 Under Alberta’s proposals, doctors would be required to work in both the public and private sectors and patients would be able to pay for faster access to health care. This time, Harper questioned Alberta’s proposals, suggesting that Quebec had the better model.28 Ed Stelmach, Klein’s replacement, has yet to announce specific plans related to health care in Alberta.

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Regional and Industrial Development Strategies Regional and industrial development strategies strongly suggest a long-term trend toward the decentralization of Canadian federalism. Since the early postwar years, provinces and other local governments have attempted to attract business and investment by offering economic incentives. These incentives include loans, tax holidays, guarantees for corporate borrowing in the private sector, and direct financial participation by provincial governments. Critics have suggested that these programs have increased the fragmentation of the Canadian economy, besides limiting local governments’ ability to provide taxpayer services. Regardless, these provincial and municipal programs grew in popularity during the 1950s and 1960s.29 In 1968, when Ottawa established the Department of Regional Economic Expansion (DREE), this issue became a focus of federal-provincial relations. DREE’s main task was to coordinate regional infrastructure programs and develop incentives for industrial expansion and relocation. DREE was also responsible for maintaining already existing agricultural and rural development initiatives. After the 1972 federal election, industrial incentives were de-emphasized in favour of coordinated federal-provincial trade and investment strategies. General development agreements (GDAs), which called for the implementation of jointly funded and coordinated regional development programs, were negotiated with every province except Prince Edward Island (which had a pre-existing arrangement with Ottawa). In 1984, DREE was replaced by the Department of Regional Industrial Expansion (DRIE), which took over much of the former Department of Industry, Trade, and Commerce. Several new agreements, which replaced the old GDAs, were negotiated between Ottawa and the provinces.30 Despite these initiatives, Ottawa failed to establish a harmonized national industrial strategy. In 1984, after a Conservative government was elected, the agencies responsible for regional development underwent another period of transition. By the end of the decade, the Atlantic provinces and Western Canada were complaining that DRIE was biased in favour of Central Canada. Ontario’s strong economic performance during those years only strengthened these complaints. In response, the Mulroney government established the Atlantic Canada Opportunities Agency (ACOA) and a new department responsible for Western Diversification (WD). To address concerns in Central Canada, Ottawa also established Federal Economic Development for Northern Ontario (FEDNOR) and the Department of Industry, Science, and Technology (DIST), which focused on Ontario and Quebec. A subsequent $820 million accord was signed with Quebec; this amount was increased by $283 million in 1989. Jean Chrétien’s election as prime minister resulted in a review of many of these programs as part of the government’s fiscal restraint efforts. As a result of that review, ACOA suffered cuts to program spending of approximately 40 percent. Then in 2000 much of ACOA’s funding was

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restored in advance of the upcoming federal election.31 The current Harper government has maintained a regional approach to running these programs. ACOA is the responsibility of Peter MacKay, the Minister of both National Defence and the Atlantic Canada Opportunities Agency. Rona Ambrose, the Minister of Intergovernmental Affairs and Western Economic Diversification controls WD, and FEDNOR is under the mandate of Industry Canada. Natural Resources and Federal-Provincial Conflict Natural resources have had a decentralizing influence on Canadian federalism. Provincial control in this policy area was established by Section 109 of the British North America (BNA) Act, which granted lands, mines, and minerals to Nova Scotia, New Brunswick, Ontario, and Quebec. Other provinces were extended similar control on entering Confederation. The Prairie provinces, however, were not granted this jurisdictional authority until 1930, and only after political and populist pressure from that region. Ownership of natural resources guaranteed a source of revenue for provincial governments; in early years it also contributed to provinces’ economic diversification. As Donald Savoie has pointed out, “since resources are, in practice, very unevenly distributed, section 109 made a major contribution to the much-discussed phenomenon of regional disparities.”32 Ontario was one of the first provinces to benefit from resource control. By the nineteenth century the provincial government had placed considerable restrictions on the harvesting of timber on Crown lands. In later years, most provinces shifted their attention to the production of hydro-electric power. Concerned about competition from Quebec and the United States, the Ontario government pioneered the use of hydroelectricity as an affordable source of power for the manufacturing sector. Around the same time, other provinces – Saskatchewan, Manitoba, New Brunswick, Quebec, BC – developed local power supplies. Not surprisingly, the export of hydro and thermal electricity quickly became a symbol of provincial control over energy resources. But when it comes to the decentralizing impact of energy policy, there is no better example than the oil-and-gas sector. Crude oil production in Canada began with the opening of the Leduc oil field near Edmonton in February 1947. Ever since, Alberta has produced as much as 80 percent of Canada’s oil and gas. Relations between Ottawa and Alberta were generally cordial in the early years of production. Though imported oil was less expensive, the federal government actively developed markets for the province’s petroleum products.33 During the OPEC oil embargo of the 1970s, however, world prices soared. For Alberta the oil crisis represented an opportunity to raise domestic prices to increase profits for local companies (and royalties for the Progressive Conservative government). Ottawa, however, declared that the domestic price of oil would be kept below international levels to

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ensure that the Canadian market had guaranteed access to affordable energy. These guidelines were institutionalized by Parliament in 1975 with legislation granting the federal cabinet the right to set prices for oil transported across provincial borders.34 Pierre Trudeau’s re-election in 1980 and his Liberal government’s decision to implement the National Energy Program (NEP) further damaged relations between Ottawa and Alberta. The NEP allowed for a gradual increase in domestic prices; however, it limited Alberta’s ability to raise prices to international levels. The NEP also implemented a series of federal taxes on profits in the oil-and-gas industry and provided financial incentives for the exploration of alternative oil supplies in northern and offshore locations.35 Not surprisingly, Alberta condemned the NEP and threatened to reduce its supplies of oil and gas to drive up domestic prices. Western separatist movements also gained support within the province. At the same time, the US government attacked the NEP as a protectionist subsidy that violated existing trade laws. Owing to these pressures, Ottawa negotiated a new agreement with Alberta in September 1981 that raised domestic oil prices and promised a number of energy-related megaprojects, including the extraction of synthetic oil from the province’s tar sands. In 1985 Mulroney sponsored the Western Accord, which eliminated the NEP. As Donald Smiley suggested at the time, “perhaps never in the history of Confederation has the economic dominance of the centre been so effectively challenged by the peripheries.”36 From the preceding discussion, two general conclusions can be reached regarding the economic decentralization of Canadian federalism. First, domestic considerations – often in conjunction with international developments – continue to affect federal-provincial relations in Canada. Second, and perhaps more important, Ottawa has a limited capacity to develop independent initiatives aimed at controlling Canada’s economy. This does not mean that Ottawa has lost all ability to coordinate economic initiatives. Here many critics point to the Agreement on Internal Trade (AIT) and SUFA as examples of renewed federal-provincial cooperation. Overall, though, a review of the long-standing tensions related to fiscal policy, regional development, and natural resources makes it difficult to deny that over the decades, the Canadian federation has become decentralized in economic terms. So when examining the impact of international pressures on Canadian federalism, it must be remembered that decentralizing trends are not solely attributable to external developments; they are also related to a number of long-term domestic ones. Conclusion An analysis of subfederal trade patterns underscores the fact that Canada has specialized provincial political economies and that the provinces have specific sectoral interests. Also, the statistics provided confirm that the

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provinces’ economic interests predate increasingly intrusive international trade commitments. This is not to suggest that global developments are irrelevant to Canadian provinces; rather, it highlights a level of provincial autonomy that some observers questioned in the aftermath of NAFTA and the World Trade Organization (WTO). It follows that provincial economic interests have implications for Ottawa when it comes to negotiating and implementing international trade agreements. Specifically, the provinces pressure Ottawa to represent the priorities of non-central governments. Given that some sectors benefit from greater market access, while others want to maintain protectionist barriers, Canada often articulates a contradictory position on liberalization. Yet there is also evidence that the ongoing decentralization of Canadian federalism is more closely tied to domestic economic developments than to neoliberal pressures in the global economy. A review of Canada’s fiscal policy and regional development programs and of provincial control over natural resources reinforces the fact that Canada’s political economy evolved over several decades and is not tied directly to international pressures. As subsequent chapters suggest, these realities are so entrenched in Canada that they contribute to dominant ideas reinforcing Canada’s fragmented and specialized economy. BC’s lumber, Alberta’s oil, Ontario’s manufacturing, and Atlantic Canada’s fisheries are more than economic realities; they are also tied to concepts of identity within provincial political cultures.

3 The Federal-Provincial Committee System on International Trade

The federal-provincial committee system on international trade evolved in response to (a) constitutional ambiguity regarding the role of the provinces in Canadian foreign policy and (b) the increasing relevance of non-central governments in this policy area. Ottawa has for decades resorted to committees, or “executive federalism,” to address issues of federal-provincial relations. The committee system that has evolved since the North American Free Trade Agreement (NAFTA), however, is a more permanent forum of consultation than past mechanisms established under the General Agreement on Tariffs and Trade (GATT) and the Canada-US Free Trade Agreement (FTA). This raises a number of important questions regarding the “internationalization” of executive federalism. Will an institutionalized brokerage mechanism for international trade lead to full provincial participation in future negotiations? As the role of the provinces expands, will executive federalism gain legitimacy as a means for managing a broad range of Canadian foreign policy issues? What implications will these committees have for both federal and provincial autonomy? At this point it is clear that Ottawa and the provinces have developed an elite-based system of consultation in this policy area. In matters of international trade, however, these linkages include not only a formalized committee system, but also ad hoc sectoral discussions related to specific negotiations or disputes, as well as selective mutual recognition agreements (MRAs). This chapter argues that with the federal government facing pressure from a number of international and domestic sources, the institutions of Canadian federalism have responded successfully to these developments. It is also clear, however, that executive federalism suffers from problems of transparency and accountability, though these deficits have yet to come under increased scrutiny from relevant sectoral and societal interests. International Law and Canadian Federalism Before evaluating Supreme Court decisions regarding the foreign activities of Canadian provinces, this issue must be reviewed in the context of international

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law. For example, international law declares that regardless of internal jurisdiction, it is central governments that are responsible for fulfilling treaty commitments. This is most clearly outlined in Article 27 of the 1969 Vienna Convention on the Law of Treaties, which states that a party to the convention must not use domestic law as justification for violating international treaty obligations. Even before the convention was signed, these principles were recognized by domestic courts, especially in Switzerland and Belgium; they were later codified in the national constitutions of France and the Netherlands.1 The Vienna Convention also makes it clear that specific treaties do not have to be legitimized by legislation or executive order in order to be applicable.2 In the case of Canada, this is somewhat irrelevant, given Ottawa’s ratification of the Vienna Convention in October 1970. The treaty entered into force on 27 January 1980. Central authority is reinforced by specific provisions in international trade agreements. In signing GATT in 1947, Canada bound itself to that agreement’s “federal state clause.” GATT Article XXIV:12, which was later incorporated into the WTO, states that “Each contracting party shall take such reasonable measures as may be available to it to ensure observance of the provisions of this Agreement by the regional and local governments and authorities within its territory.”3 There is, however, some debate about the intrusiveness of Article XXIV:12. Some member states interpret “reasonable” as a pledge by central governments to use all available constitutional powers to guarantee subfederal compliance. Canada and other federal countries, on the other hand, believe that this clause is open to interpretation.4 The FTA included a similar “federal-state clause.” Article 103 of the FTA stipulated that the “parties to this agreement shall ensure that all necessary measures are taken in order to give effect to its provisions ... by state, provincial and local governments.”5 Admittedly, the FTA did not dictate what a party must do to meet these obligations; however, according to Ian Robinson, “it was widely agreed that this reference was stronger than the GATT’s ‘reasonableness’ standard.”6 Article 105 of NAFTA incorporates the same “all necessary measures” language as the FTA. Provincial International Legitimacy and Canadian Judicial Review Canada is one of the few federal states without clearly defined constitutional parameters regarding the international activities of non-central governments. In fact, the only reference to international relations in the 1867 BNA Act is Section 132, which grants the Dominion the authority to implement treaties negotiated by Great Britain. Over time, Ottawa gained increasing autonomy in its foreign affairs, sometimes with direct implications for the provinces. As these issues were opened to judicial interpretation, three sections of the BNA Act became increasingly important: the treaty-making power, the trade

The Federal-Provincial Committee System on International Trade 45

and commerce power, and the peace, order, and good government (POGG) clause. In terms of the treaty-making power, the 1937 Labour Conventions decision by Britain’s Judicial Committee of the Privy Council (JCPC) established the precedent that Ottawa has the power to negotiate international treaties but does not have the right to implement agreements in areas of provincial jurisdiction. Despite initial concerns that this ruling would limit federal autonomy, the Supreme Court of Canada did not later use the Labour Conventions precedent in favour of either level of government, preferring instead to maintain a balance between federal and provincial authority regarding this issue.7 Judicial review of the trade and commerce power followed a similar pattern. Section 91(2) of the BNA Act had given Parliament exclusive control over the regulation of trade and commerce. The difficulty was that the provinces had been granted jurisdiction over property and civil rights, including the regulation of contracts through which international trade is conducted. Though Citizens Insurance Company v. Parsons (1891) appeared to confirm Ottawa’s control over international trade, questions were later raised regarding the regulation of products that were both consumed locally and traded internationally. As with Labour Conventions, however, the Supreme Court did not use trade and commerce to entrench federal or provincial power. Instead it reaffirmed that “there was no federal power to regulate a single trade or business. And, it indicated that issues ... must be determined on a careful case-by-case basis.”8 A third approach to interpreting federal authority is the POGG clause. Compared to trade and commerce and the treaty making power, judicial interpretation of POGG is less defined, especially in terms of economic and environmental issues. For the provinces the most relevant Supreme Court decision is Crown Zellerbach (1988). Here the forest company was accused of dumping wood waste into the Pacific Ocean. Though existing federal legislation defined “sea” as an extension of provincial internal waters, the Court ruled that POGG allowed Ottawa to extend its control when these issues were deemed to be matters of “national concern.”9 Even so, Crown Zellerbach has not served as a precedent for centralized control.10 Later cases, such as Friends of the Oldman River Society (1992) and Canada v. Hydro Quebec (1997), have reinforced this federal-provincial balance.11 Expanding the International Agenda With the exception of Quebec, most Canadian provinces did not have early international aspirations.12 As Quebec’s foreign activities expanded, however, other provincial governments began to show an interest in pursuing independent global and regional initiatives. According to Kim Nossal, it was not

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difficult to distinguish between Quebec’s goals and those of other provinces. Specifically, most provincial governments were concerned about defending and expanding areas of domestic jurisdiction, even in matters of foreign affairs. Usually these initiatives were limited to resource development, health, and education. Geography and the need to coordinate functional matters – such as law enforcement, waterways management, firefighting, and road, highway, and bridge services – also propelled the provinces into international activities.13 In the decades following the Second World War, several provinces developed an interest in foreign trade policy. In most cases this was a result of pressure from the United States as provincial subsidies and protectionist practices in a wide range of sectors (fish products, pork, softwood lumber, automobile production, Michelin tires) came under increasing scrutiny. Also during this period the US sent several diplomatic notes to Ottawa in response to the nationalization of American-owned potash firms by the Saskatchewan government in 1975-76. Washington expressed similar concerns relating to Canadian investment practices during Quebec’s takeover of Asbestos Corporation in 1979-81. Not surprisingly, the provinces were extremely critical of these attacks on domestic interests. Several governments even condemned President Richard Nixon’s move to initiate an import surcharge in 1971, with Manitoba and Ontario taking the extra step of developing relief programs to supplement federal compensation packages. The 1970s also marked an increase in provincial activism in specific sectors of the economy. Ultimately it was energy that did the most to increase federal-provincial tensions. Several premiers, including Peter Lougheed of Alberta and Edward Schreyer of Manitoba, took the then unusual step of visiting Washington to articulate provincial concerns. While the controversy over oil and gas created impressive headlines, Ottawa and the provinces continued to cooperate in a number of other areas. The two levels of government worked closely together on the aforementioned US countervail duties against Michelin tires and during Saskatchewan’s decision to intervene in the potash industry. There was also collaboration during negotiations on pipelines, location subsidies for automotive plants, and fisheries issues.14 In response to these pressures Ottawa at first attempted to institutionalize the provinces’ interests within the federal bureaucracy. At one level, federal officials hoped to develop a team approach by reorganizing External Affairs to include a new Federal Provincial Coordination Division (FPCD).15 This department was created to monitor the activities of Quebec, but it soon became responsible for keeping the provinces informed of all relevant Canadian international initiatives. It was also expected to coordinate subfederal activities and assist provincial foreign missions.16 As the Department of External Affairs became more comfortable with this activity, however, the political

The Federal-Provincial Committee System on International Trade 47

need to monitor the provinces diminished. As a result, the Privy Council Office (PCO) took control of most FPCD responsibilities. Though External Affairs continued to maintain a federal-provincial office, it was, in the words of one official, “little more than a man and a boy.”17 Executive Federalism and International Trade: The Provinces and GATT As early as the 1960s, Donald Smiley labelled this form of federal-provincial interaction “executive federalism.” Specifically, he described this process as “the relations between elected and appointed officials of the two orders of government in federal-provincial interactions and among the executives of the provinces in interprovincial interactions.”18 Within Smiley’s definition was a prominent supportive role for bureaucratic actors. At first, federalprovincial meetings were related to the framing of constitutional proposals and the negotiation and implementation of fiscal and other financial agreements. They were also viewed as a natural outgrowth of an executive-driven domestic policy process in which both levels of government attempted to maximize their autonomy and jurisdiction.19 Executive federalism further thrived owing to the lack of effective brokerage mechanisms for provincial representation in federal institutions.20 The Kennedy Round of GATT negotiations contributed to the internationalization of executive federalism, and its extension to the bureaucratic level in matters of trade policy. During the Kennedy Round, for example, some provinces submitted formal reports on tariff policy to the federal government and called for greater involvement in the negotiations. Ottawa’s response was tentative, however, and there was little indication that it would consider an expanded provincial role. Specifically, federal officials believed that clear constitutional guidelines existed regarding the negotiation of international tariffs. As one member of the Canadian delegation suggested at the time, the provinces received no preferential treatment and “got told [about international economic policy] when everybody else got told.”21 By the time the Tokyo Round began in 1973, however, GATT’s focus had shifted to the difficult issue of non-tariff barriers (NTBs). Negotiations on visible tariffs were replaced by discussions of subsidies, government procurement, and other technical barriers. Sectoral negotiations on fisheries, resource-based products, and agriculture also involved areas of provincial jurisdiction. This is why the provinces demanded direct consultation with Ottawa. The federal government understood that, given the scope of the issues involved, it would need the support of the provinces in order to negotiate a binding international agreement under GATT’s federal state clause. At the beginning of the Tokyo Round the only formal mechanism for provincial input was the Canadian Trade and Tariffs Committee (CTTC). That committee, chaired by a federal deputy minister, gathered briefs from

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business, unions, consumer groups, the provinces, and all other interested parties. To better represent regional interests, a more direct forum for the provinces was established in 1975: an ad hoc federal-provincial committee of deputy ministers. In August 1977 a Canadian Coordinator for Trade Negotiations (CCTN) was appointed with the mandate to coordinate relevant information from the provinces, the federal bureaucracy, industry, and other non-governmental organizations. The CCTN’s chair, Jake Warren, who at the time was Canada’s Ambassador to the United States, was credited with increasing provincial bureaucrats’ involvement in the negotiations. According to Douglas Brown, the “provinces saw this as an improvement over the CTTC which was not perceived as having any determining influence over the Canadian negotiating position.”22 Despite these changes, British Columbia, Alberta, Ontario, and Quebec continued to push for a greater role during the Tokyo Round. These provinces sent delegates to Geneva; Quebec’s stayed for the entire round of negotiations. However, Ottawa refused to allow the provinces formal representation in the Canadian delegation. Even so, relations between the two levels of government were for the most part cordial during the GATT negotiations. Ottawa kept provincial officials informed, and most of the provinces provided the negotiating team with useful analyses. The federal government also benefited from access to detailed positions on domestic jurisdictional issues such as procurement and provincial liquor boards. As a result, despite a number of ongoing concerns relating to provincial empowerment, the Tokyo Round created a positive working environment between federal and provincial officials. In fact, the Macdonald Commission “recommended the use of the ‘successful’ procedure ... in future trade negotiations, in particular for the bilateral trade negotiations with the United States.”23 Not surprisingly, federal-provincial consultative mechanisms became more institutionalized following the Tokyo Round. Senior officials met regularly on newly created federal-provincial committees, and ministers responsible for trade took steps to improve existing channels of communication. Also, Ottawa and the provinces worked closely on sectoral disputes such as those involving softwood lumber and transborder trucking. This was also the time, however, when federal officials began wondering how willing the provinces actually were to comply with difficult economic commitments. In 1985, for example, Ontario refused to follow provisions regarding liquor and wine distribution, thus exposing Canada to a GATT challenge by the European Community (EC). Ottawa argued that the Canadian constitution prevented the federal government from forcing Ontario to adhere to GATT rules. The dispute panel disagreed, noting in 1988 that “the measures taken by the Government of Canada were clearly not all the reasonable measures as might be available to it to ensure observance of the provisions of the General

The Federal-Provincial Committee System on International Trade 49

Agreement by the provincial liquor boards, as provided in Article XXIV:12.”24 The dispute followed Ottawa’s refusal to include provincial representatives on Canada’s delegation to the GATT ministerial meeting in 1982.25 As Michael Hart noted, the increasing potential for petty politics in this policy area was “immense – and ... very destructive.”26 The Provinces and the FTA Despite these tensions, the provinces continued to push for greater participation in the Canada-US free trade negotiations. As G. Bruce Doern and Brian Tomlin have pointed out, much of this pressure came from the West, especially Alberta. Alberta premier Peter Lougheed and Prime Minister Brian Mulroney shared similar views on free trade; moreover, the western provinces wanted to ensure that future negotiations were not dominated by Ontario and Quebec. In the spring of 1985 the premiers of BC, Alberta, Saskatchewan, and Manitoba declared their support for bilateral free trade; but they also requested “full provincial participation” in upcoming negotiations. Some, but not all, of the other provinces expressed a similar position. Ontario was cautiously supportive of a comprehensive trade agreement with the US; but it, too, supported the principle of full participation. Quebec supported both. The Atlantic provinces endorsed negotiations but “were neutral on the question of full provincial participation.”27 Provincial aspirations for the FTA were highlighted at the Annual First Ministers’ Conference, convened in Halifax on 28 November 1985. During this meeting the provinces pressed for a full role in the upcoming trade negotiations. Mulroney had initial concerns, but he was in a difficult political situation, given that during the 1984 federal campaign he had promised a more conciliatory relationship with the provinces. To make matters worse, External Affairs Minister Joe Clark put forward the deliberately undefined principle of “full provincial participation” in order to satisfy the provinces and end the conference on a high note.28 It was clear that despite the potential conflict over the provincial role, both Clark and Simon Reisman – who had been appointed chief federal negotiator and head of the Trade Negotiations Office (TNO) only a month earlier – wanted the provinces onside going into the negotiations, given the areas of domestic jurisdiction on the table.29 The question of provincial participation was finally settled when Don Getty, Alberta’s newly elected premier, put a compromise position forward in March 1986. Getty proposed on behalf of the provinces “a set of modalities for participation that included, among other things: the establishment by all first ministers of a joint mandate and joint control over Canada’s chief negotiator; full provincial representation on the Canadian negotiating team, including the option of ‘being in the room’ with the Americans; full participation in the negotiating strategy; and full information sharing in

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confidence with the federal negotiators.”30 Ottawa was reluctant to accept all of these recommendations; however, federal officials understood that a defined provincial role was essential if the trade deal was to be struck. Finally, in June 1986 the provinces accepted a compromise that included the following criteria: 1 The first ministers would meet once every three months for the duration of the negotiations, to review their progress. The first such meeting was set for 17 September 1986. 2 Designated ministers would meet as required, chaired by the new federal Minister for International Trade, Pat Carney. 3 There would only be one Chief Negotiator for Canada, Simon Reisman, who would be fully responsible to the federal cabinet for the conduct of the negotiations. The Trade Negotiations Office would be completely under the Chief Negotiator’s supervision. There would be no provincial representatives in the TNO or in negotiating sessions with the United States. 4 The Chief Negotiator’s mandate would be established by the federal government, in consultation with the first ministers and the designated ministers. 5 There would be close ongoing consultation through the CCTN, with Simon Reisman as Chairman. The CCTN, which had met once a month since January 1986, would continue to meet as often as required. Its function would be to provide liaison and advice. 6 The federal government would formally seek the views of all provinces prior to endorsing any agreement. There was no agreement on the issue of the role of provinces in the ratification or implementation of the agreement.31

In sum, the federal government gave the provinces enough power to satisfy some demands without losing control of the process. Provincial representatives would not physically be part of the negotiation team, but the provinces seemed to have more potential input than in any other previous arrangement.32 With consultative mechanisms now in place, Canada entered into bilateral trade negotiations with the United States. First, a consensus was reached on specific sectoral issues. When Canadian officials pressed for “a binding mechanism” that would circumvent US trade remedies, Washington demanded commitments from Canada limiting the use of subsidies. This impasse resulted in a breakdown of talks in September 1987.33 To this point, Ottawa’s consultation with the provinces had focused on the technical substance of the negotiations. The CCTN was the main forum of discussion,

The Federal-Provincial Committee System on International Trade 51

but various subcommittee, ministerial, and quarterly first ministers’ meetings supplemented its work, as set out in the federal-provincial agreement. Despite concerns regarding openness and information sharing by both levels of government, most participants thought the consultations were fairly successful. Though they were not part of the formal federal delegation, the provinces did have an impact on the direction and substance of the talks. As Brown has noted, the degree of input from the provinces exceeded “that of most other domestic actors, including the private sector, other federal departments and [P]arliament. Only the TNO itself, the Prime Minister’s Office and the special subcommittee of the federal cabinet on trade appeared to have greater access to the negotiating process.”34 The last stage of negotiations, which followed the Canadian walkout in September, lasted until 4 October 1987. Though not completely satisfied with the American proposal, the Canadian delegation eventually accepted the tabled amendments. Provincial participation during the last month was extremely limited. In fact, in the lead-up to the 3 October deadline imposed by US Congress’ “fast track” legislation, there was no formal consultation with the provinces. There were also no meetings with the provinces in the period leading up to the release of the agreement’s final text.35 As a result, there were aspects of the final deal of which the provinces were unaware, especially regarding the new trade dispute process.36 Despite this lack of consultation, the FTA’s content produced relatively few surprises for the provinces. Provisions dealing with the Auto Pact, energy, and cultural initiatives had all been discussed thoroughly during earlier negotiations. Other items, including agriculture, wines and spirits, exceptions, national treatment, and services and investment, had also received a great deal of attention in earlier federal-provincial meetings. NAFTA and the Evolution of the Federal Provincial Committee System The increased participation of the provinces during the FTA negotiations fuelled further demands for provincial involvement in matters of trade policy. Shortly after the FTA was implemented, the CCTN became the Committee for the Free Trade Agreement (CFTA), on which each province had one official representative. Ottawa also established a series of consultative committees with various provincial departments to address sectoral concerns and ongoing trade irritants. Similar sectoral committees were set up for the stalled Uruguay Round. These developments, however, did not represent a departure from the federal-provincial relationship that existed prior to the FTA. The provinces were receiving more information but still played no formalized role in the formulation of Canadian foreign trade policy. After the 1988 First Ministers’ Conference, Ottawa agreed to enter into negotiations with the provinces to institutionalize federal-provincial ties in

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this policy area. Though the provinces continued to push for a more inclusive role, there was no consensus on the form and content of these proposed linkages. Quebec, for example, tabled an initiative in 1990 calling for the creation of a “hierarchy” of provincial participation that would allow access for a select number of provinces based on specific areas of jurisdiction. A number of officials, especially from the smaller provinces, worried that the proposal would create a consultative system dominated by BC, Alberta, Ontario, and Quebec. In addition, BC criticized the plan because it “essentially gave Quebec and Ontario a veto that was not extended to other provinces.”37 Finally, Ottawa suggested that these changes would likely involve constitutional reforms, which were not an option for the federal government. By the end of 1990 it was obvious that these differences were irreconcilable, and discussions aimed at formalizing a role for the provinces came to a standstill. Even so, in the early stages of the NAFTA negotiations there was considerable cooperation between Ottawa and the provinces. Even while the two sides debated what “full” participation meant, they were able to reach an agreement on changes to the existing federal-provincial committee system on international trade. The CFTA would remain in place to deal with ongoing issues of federal-provincial concern, such as trade disputes; but in addition, Ottawa and the provinces would establish the Committee for North American Free Trade Negotiations (CNAFTN). Cooperation between the two levels of government was evident throughout the CNAFTN process, especially in terms of information sharing. Specifically, the provinces received copies of every draft proposal tabled by the US and Mexico as well as information on a number of specific sectoral issues. On several occasions the provinces even had access to materials not yet reviewed by the cabinet. According to one provincial representative, the “CNAFTN process involved the federal government tabling draft proposals and the provinces taking these documents and pushing for changes at future CNAFTN meetings. Most provincial governments also had groups consisting of different government departments depending on the sectors being discussed.”38 Even federal officials conceded that linkages between Ottawa and the provinces were now extremely formalized. In the words of one representative, “we got to a point where a CNAFTN meeting could be held within a couple of hours using a conference call.”39 Though CNAFTN appeared to represent an important step in the evolution of formal consultations between Ottawa and the provinces, a number of provincial officials had ongoing concerns.40 In fact, some participants perceived the institutionalization of these ties as an attempt to co-opt the provinces in the policy process. Specifically, several officials suggested that Ottawa’s commitment to information sharing was really an effort to limit the input of provincial governments. Ottawa was overwhelming the provinces

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with detailed information; as a result, several delegations were unable to keep pace with the federal agenda and ended up with only limited influence in specific policy areas. Yet other provincial trade representatives considered CNAFTN an important improvement in consultation.41 For example, officials in several provinces rejected the notion that Ottawa was attempting to coopt provincial interests. These officials suggested that the main challenge facing the provinces was a lack of bureaucratic resources and expertise to cover all areas of the negotiations. They also endorsed the ongoing use of a formalized committee system for international trade following the NAFTA negotiations. Ongoing Consultation: CTrade As federal and provincial officials predicted, the CNAFTN process evolved into what is now known as the CTrade committee system for international trade. Initially, however, there was some resistance within the foreign policy bureaucracy regarding further institutionalization of the CNAFTN system. According to one federal bureaucrat, the Department of Foreign Affairs and International Trade (DFAIT) “was suffering from a lack of resources” and was hoping to avoid any growth in this policy area.42 Ottawa eventually endorsed the creation of CTrade for pragmatic reasons. For the better part of a decade, Canada had been involved in free trade negotiations at the global and regional levels. Now, the newly created WTO would encompass areas of provincial jurisdiction that required coordination between Ottawa and the provinces. Bureaucratic survival for both levels of government was also an issue. Past negotiations had forced Ottawa and the provinces to commit greater resources to international trade policy. As a result, there was pressure from the bureaucracy to maintain or expand the institutional infrastructure that already existed. The current CTrade process involves four-times-yearly meetings between Ottawa and the provinces. All provinces attend these discussions. In recent years one CTrade meeting per year has been held outside Ottawa: in 2002, trade officials travelled to Iqaluit; and in 2003, discussions were held in Charlottetown. Though CTrade always focuses on topical trade issues, local matters are also included in meetings held outside Ottawa. In Charlottetown, for example, representatives from Atlantic Canada provided an overview of regional trade concerns, including automobile insurance, softwood lumber, shipbuilding, call centres, potatoes, blueberries, mussels, and lobsters. Also, Ottawa and the provinces often exploit the fact that officials are in one location by scheduling other meetings around CTrade consultations. On its face, CTrade represents a significant commitment to involve the provinces in matters of international trade. However, this evaluation is not unanimously shared. Some provincial governments are concerned that

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CTrade is more a forum for information sharing than a mechanism for consultation. Indeed, most CTrade meetings are primarily opportunities for federal officials to update and brief the provinces on current international trade issues, as opposed to engaging in detailed intergovernmental discussions. Provincial trade officials have also complained about the late arrival of federal documents and the fact that CTrade agendas often have not been available until days before the actual meetings, preventing any significant policy planning.43 Most provincial officials, though, have only minor concerns regarding the CTrade process. They generally recognize that Ottawa has recently made it a priority to provide the provinces with better information. CTrade now has a secure website, and considerable e-mail flows between officials at both levels of government. Also, draft documents are made available when Ottawa enters negotiations in areas of provincial jurisdiction. The provinces are encouraged to provide feedback and guidance on these proposals, and federal negotiators are sensitive to the economic interests of the provinces. One provincial official pointed out that “the CTrade forum is only one avenue of information gathering for the provinces.” There are many other sources available, and “it is the responsibility of everyone at the provincial level to ensure they have enough information to do the job effectively.”44 Besides CTrade, three other forms of consultation take place between federal and provincial governments. First, there is almost always more than one department at the provincial level in contact with Ottawa on international trade matters. Many of the larger provinces have specific departments to coordinate CTrade and other foreign trade policy considerations. And even where these coordinating mechanisms exist, most provinces have other officials responsible for trade policy in a wide range of departments. Ministries of environment, agriculture, finance, and forestry all have interests related to international economic policy that need to be protected. CTrade, for example, does not usually include issues related to agriculture, which are dealt with in a separate federal-provincial committee. Ad hoc sectoral committees related to specific international issues or trade disputes are another form of consultation between Ottawa and the provinces. These committees can be in place for extended periods of time. In BC, for example, federal-provincial consultation on the pinewood nematode dispute has been ongoing for more than a decade.45 For the most part, this consultation occurs at the desk officer level or senior adviser level, with occasional involvement from other officials. But contacts of this sort are sporadic, with issues becoming important at different times. According to some provincial officials, the federal government tends to be more inclusive when it comes to “defensive” trade policy positions. Specifically, Ottawa is more likely to rely on “provincial expertise and resources when other states launch trade challenges against Canada.”46 It is rare for provinces to be involved in “offensive”

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cases, but there are exceptions. In the aircraft dispute involving Brazil (Embraer) and Canada (Bombardier) there were federal-provincial discussions with specific provinces. A final example of federal-provincial consultation involves MRAs. MRAs are “mutual recognition agreements” negotiated between countries to harmonize standards relating to specific products. These agreements typically fall outside the purview of the WTO and NAFTA. Essentially, they are “standalone” agreements relating to highly specific sectoral considerations. Many of the products harmonized by MRAs are matters of provincial jurisdiction, especially in terms of how those products enter subfederal markets. Provincial involvement in the negotiation of MRAs is not guaranteed – indeed, a number of provinces have minimal experience in this policy area. Ottawa views MRAs as a federal responsibility; usually, it includes a province in MRA negotiations if there are concerns about compliance or if the province’s expertise is needed. Sometimes, MRA negotiations involve minimal conflict between Ottawa and the provinces. In the negotiations for the New World Wine Accord, which was intended to harmonize standards for European and Canadian wine products, the federal government circulated drafts of proposed guidelines to the provinces. Other times, disagreements arise between the interested parties that lead to the abandonment of a proposed MRA. One such case involved an attempt by the federal government to add an electrical safety annex to an Asia-Pacific Economic Cooperation (APEC) agreement. Industry Canada entered into negotiations on the annex without consulting other relevant federal and provincial departments. As a result, the provinces refused to accept the annex as negotiated and the issue was abandoned.47 MRAs constitute only a small part of provincial policy output. Occasionally an MRA will emerge on the agenda of CTrade, but according to one official “it is unlikely that a formal institutionalized process for Ottawa and the provinces will ever evolve in this issue area.”48 The Administration of Provincial Trade Policy: Co-operative Federalism? As CTrade evolves, some provinces continue to push for a more formal role in the policy process. According to Grace Skogstad, Quebec has cited the example of the European Union (EU), which allows member states to participate directly on EU negotiating teams. In addition, some Quebec officials have called for the right to intervene directly during negotiations on matters they consider important to their province’s interests. In September 2005 the Liberal government of Jean Charest clarified that Quebec’s position on international relations would continue to be consistent with the 1965 GérinLajoie doctrine. Quebec’s Minister of International Relations Monique Gagnon-Tremblay outlined the following five-point proposal:

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1 Quebec must have access to all information and must be involved in helping plan the Canadian position before any negotiations. 2 Quebec must be a full member of Canadian delegations and must be solely responsible for appointing its own representatives. 3 Quebec must have the right to speak for itself at international forums when topics under its jurisdiction are being discussed. 4 Quebec’s right to give its consent before Canada signs or declares that it is bound by a treaty or agreement must be recognized. 5 Quebec must have the right to present its positions at appearances by Canada before the arbitration bodies of international organizations when Quebec or its interests are at stake.49 Though not explicitly tied to foreign trade, these conditions could have implications for other Canadian provinces. For example, Quebec’s recent success in obtaining a “formal” role in UN Educational, Scientific, and Cultural Organization (UNESCO) seems to fulfill many of these objectives. At this time, however, it is unclear whether these demands will facilitate an expanded presence for provincial officials in global and regional forums, further contributing to the “internationalization” of executive federalism. Alberta, too, has proposed an institutionalized role for the provinces with regard to trade policy. Most recently it has argued for this under the umbrella of the Council of the Federation, created in July 2003. Any new mechanisms would not replace CTrade; it would, however, more clearly outline criteria for the provinces’ expanded international involvement. There is some evidence that during the later stages of Jean Chrétien’s Liberal government, Ottawa was seriously considering Alberta’s proposal. One senior provincial bureaucrat noted, however, that it was not Chrétien but Pierre Pettigrew, the trade minister, who was “the driving force behind involving the provinces as much as possible.”50 Indeed it was Pettigrew, with the support of Paul Martin, who called for a Canada-US subcommittee as part of the Council of the Federation.51 Ottawa, however, has consistently shown little interest in proposals that might reduce federal autonomy in international trade negotiations. Its specific concern is that an internal decision-making process for trade policy might restrict Ottawa’s ability to protect Canadian interests, especially if it was similar to the formal “7-50” criteria for constitutional amendments. According to Skogstad, this explains why the federal government has traditionally rejected these requests, “arguing there is no need for formalization since current mechanisms to ensure provincial participation are working well.”52 It would also appear that the provinces vary in their enthusiasm for a more formalized structure. In this regard, Ontario and BC have expressed a preference for the informal, flexible structure that already exists. One Ontario official suggested that the province “has concerns about a consensus-

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based model and, frankly, having to dedicate resources to issues we don’t really care about.”53 James Peterson, who replaced Pettigrew as federal trade minister, did little during his tenure to advance the agendas of Quebec and Alberta.54 It would appear, then, that substantial change to the existing CTrade system is unlikely. The same can be said for a formal and expanded role for provincial governments in international institutions and negotiations. CTrade and Executive Federalism: An Evaluation Despite its apparent success, CTrade does raise important questions regarding the role of executive federalism in Canada’s trade policy. Specifically, there is evidence that consultative linkages between Ottawa and the provinces could further limit federal autonomy. With international economic agreements encompassing increasingly more areas of provincial jurisdiction, demands for consultation are not going to diminish. This has implications for the federal government’s policy flexibility, both domestic and international. The following chapters will show that in the international arena, Ottawa has adjusted its positions because of concerns about provincial jurisdiction. At the domestic level, ongoing pressure from the provinces, both in CTrade and in other federal-provincial forums, has compelled Ottawa to re-evaluate its policy options in specific issue areas. In the past, the federal government ceded autonomy to international sources when signing these agreements. Today, Ottawa faces pressure from both inside and outside the country. The closed nature of CTrade also raises concerns about the legitimacy of this consultative process. That said, Canadians are unlikely to mobilize to challenge CTrade’s relative lack of transparency. After all, Ottawa’s resort to executive federalism in this case did not mark a profound departure from past models of elite accommodation.55 As Smiley first pointed out, personalities have always had a strong impact on executive federalism. For example, the provinces have benefited from the long tenures of officials working in this policy area. Personal relationships at this level, for example, have facilitated provincial cooperation. According to a number of officials, the last two chairs of CTrade also welcomed provincial input because of the sheer complexity of present-day negotiations, especially in areas such as services.56 In another example, several provincial trade representatives praised the federal leadership of Jonathan Fried, who later became Martin’s senior foreign policy adviser in the PCO.57 As one provincial official pointed out, this is a “small community of officials and it would be a mistake to think that personalities don’t have an impact on relations between Ottawa and the provinces, as well as between provincial governments.”58 Perhaps the most significant aspect of CTrade is its impact overall on intergovernmental relations in Canada. Over the past three decades, consultative

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mechanisms for matters related to international trade have expanded dramatically. This “internationalization” of executive federalism has set a potential precedent for other policy areas, such as labour and the environment. The key will be to evaluate these consultative linkages as they develop. Of specific interest will be the potential impact of these ties on federal autonomy. Questions of legitimacy and transparency will also be relevant. On its own, CTrade and its predecessors have successfully involved the provinces in matters of international trade without destabilizing traditional practices of Canadian federalism. If similar linkages begin to develop in other volatile policy areas, however, there is a risk that federal-provincial relations could experience a more dramatic institutional transformation. Conclusion As international trade agreements intrude into areas of provincial jurisdiction, non-central governments have increased their demands for a greater role in negotiating and implementing those agreements. In response, Ottawa has adopted a committee system similar to those in other issue areas in Canadian politics. Over the past two decades, trade-related committees have evolved into permanent forums for federal-provincial contact. This institutionalization reflects the capacity of Canadian federalism to respond to developments in the global political economy. In addition to CTrade, Ottawa engages provincial line departments on an ad hoc sectoral basis. MRAs are another forum for federal-provincial interaction. All of these developments, however, raise questions about executive federalism. At the domestic level, these relationships have reinforced past observations about the importance of executives and bureaucracies in constitutional negotiations. In terms of international trade, subfederal representatives are increasing their engagement when issues have implications for areas of provincial jurisdiction. The internationalization of executive federalism, however, raises ongoing questions about transparency and access; yet non-governmental interests have yet to challenge these practices. Meanwhile, efforts to further institutionalize the provinces’ role in Canadian foreign trade, such as those endorsed by Alberta and Quebec, face resistance from both Ottawa and other provincial governments. This could ultimately limit the further expansion of executive federalism in this policy area.

Part 2 Considerations of Process and Outcome

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4 The Political Executive in Provincial Foreign Trade Policy

This chapter focuses on the political executive and provincial foreign trade policy. Specifically, it evaluates centralizing subfederal institutional reforms and the interest and engagement of provincial executives in this policy area. For the most part, provincial executives have pursued institutionalized cabinet structures, although some provinces have turned toward post-institutional, premier-dominated models. The centralization of executive power has implications for provincial trade officials, though most of these representatives continue to exercise considerable autonomy. In fact, most provincial premiers and senior members of cabinet have only a peripheral interest in global trade issues, only becoming involved when high-profile meetings are held such as First Ministers’ and Premiers’ Conferences, or when crises develop such as the discovery of bovine spongiform encephalopathy (BSE). Also, members of political executives tend to be active in the late stages of international negotiations or during trade disputes. Another area of executive involvement is federal and provincial trade promotion, such as Jean Chrétien’s Team Canada trade missions. At other times, however, senior cabinet members attempt to represent specific sectoral interests, as evident in Ralph Klein’s meetings with Vice President Dick Cheney regarding a continental energy strategy and a US-Alaska oil pipeline. Otherwise, direct engagement in complex issues of trade policy remains rare. Though there was evidence of executive involvement in Ontario and British Columbia during the North American Free Trade Agreement (NAFTA) negotiations, this did not significantly alter Canadian trade policy or the evolution of international norms and standards. Studying Executives: Questions of Institutional Change Canada has experienced several stages of cabinet organization, including the traditional cabinet, the departmentalized cabinet, and the institutionalized cabinet. The traditional cabinet focused on local issues and was driven by patronage. The departmentalized cabinet had limited standing committees as well as bureaucratic departments with considerable autonomy.

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Contemporary institutionalized cabinet structures are notable for their formal committees, sharply defined central agencies, and budget-related controls. In such a cabinet the prime minister or premier is the organization’s “architect,” central departments and agencies provide policy input to cabinet, and decision making becomes more centralized; this in turn creates tension between the political executive and the various bureaucratic departments.1 Donald Savoie has also noted the development of a “post-institutional or premier-centered cabinet.” He suggests that the institutionalized cabinet’s collective and relatively collegial processes have added to the authority of the premier or prime minister.2 At the federal level, the process of formulating foreign trade policy reflects an institutionalized cabinet structure. The trade minister submits a Memorandum to Cabinet outlining the costs and benefits of various policy initiatives. Representatives from the Department of Foreign Affairs and International Trade (DFAIT) facilitate this process, consulting with line departments and agencies before these matters are formally reviewed at the cabinet level. According to Dan Ciuriak, interdepartmental linkages are vital as trade officials seek to obtain the necessary support for cabinet approval.3 Once the policy initiative reaches cabinet, the PCO considers broader political and economic factors. Generally speaking, the process is collegial and is driven by the understanding that these officials will need support on other issues in the future. Christopher Dunn has posited that a more complex institutional relationship exists in provincial governments.4 He notes an increasingly decentralized cabinet process, one in which complex committee systems require coordination by central agencies.5 How are these decision-making structures to be evaluated in the context of the provinces’ foreign trade policies? Has institutional centralization dramatically altered the role of provincial trade officials? Remember, however, that organizational factors are not the only relevant ones when the role of provincial executives is being evaluated. In terms of trade policy it is also necessary to examine the influence and interests of provincial executives. Direct engagement may be limited, but at times the executive does intervene, as it did in BC and Ontario during the NAFTA negotiations. Atlantic Canada The Atlantic province with the most executive involvement is New Brunswick. In part this is because the premier has always been such a key figure in New Brunswick politics. Over the past four decades, four premiers have controlled the province (though others were in office for shorter terms). Louis Robichaud was elected premier in 1960 and served in that capacity for a decade. Richard Hatfield was premier from 1970 to 1987, followed by Frank McKenna (1987 to 1997), who was replaced by Bernard Lord (1999 to

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2006). All four leaders were Progressive Conservative or Liberal; however, Stewart Hyson has suggested that personalities and “orientation to the job” have always had a greater impact than partisan factors. This “personal” approach was evident during efforts to centralize control in the political executives of Robichaud and Hatfield. McKenna brought a greater focus on fiscal policy, emphasizing trade promotion, investment, and cooperative federalism. Lord also embraced many of the same priorities, but he also emphasized tax cuts, as opposed to McKenna’s “interventionism.”6 These historic realities have contributed to the current role of the political executive in New Brunswick’s foreign trade policy. In previous decades there was limited involvement by the executive in this policy area. Traditionally, Liberal and Conservative governments supported free trade and the political executive allowed the bureaucracy to operate without interference.7 The election of Lord and the Conservatives altered this working relationship. One senior provincial civil servant candidly admitted that “there was considerable distrust of the bureaucracy when the Conservatives first entered office.”8 The Conservatives launched a review of the province’s organizational structure; the result was Greater Opportunity: New Brunswick’s Prosperity Plan.9 At the core of these proposed changes was a greater role for the political executive in the formulation of government policy. According to Raj Venugopal, the Executive Council Office (ECO), as the “department of the premier,” would now “establish the policy direction of the government and manage the overall execution of the policy plan.”10 The premier, as “Minister of ECO” and also of Intergovernmental Affairs (IGA) until mid-2003, highlighted international relations as a priority for the new government. As part of this executive review, the Conservatives evaluated the international activities of various departments. According to James Kershaw, the deputy education minister, the scope of New Brunswick’s “global activities surprised a lot of people”; however, these initiatives lacked planning and coordination.11 The premier responded by adopting a “corporate” and centralized approach to the province’s international affairs. The reorganization led to Prospering in a Global Community: New Brunswick’s International Strategy, published in the spring of 2003.12 This report targeted fifty-seven specific “action priorities” ranging from cooperative federalism to identifying target markets for investment and trade. It was clear that IGA would continue to centralize activities in this policy area and serve as a “conduit” to the premier. According to one provincial official, “the initial distrust took a year or two to diminish,” but the “corporate model” was eventually “considered a success, at least by IGA.”13 Yet in matters of trade policy, it is important not to overestimate the impact of the New Brunswick’s political executive. Lord’s involvement on most trade matters was limited to issues of significant political importance, such as international education. As the same official pointed out, “most of the

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day-to-day activity on these issues remains with bureaucratic officials.” When interaction does exist, it is “very collegial.”14 In the words of another civil servant, the involvement of the New Brunswick executive in international affairs “remains mainly ad hoc and reactionary,” with decisions “driven primarily by trade policy officials and other relevant line departments.”15 In Nova Scotia, provincial executives have always been small, with limited mechanisms for cabinet coordination. According to David Johnson, however, the executive system in Nova Scotia has become more institutionalized over the past three decades, though these changes “must be qualified as limited.”16 Not until the 1990s was there significant reform in Nova Scotia. During the two years the Conservative government of Donald Cameron was in office (1991-93), it challenged traditional patronage practices in the provincial public service. The Liberals under John Savage continued these changes and adopted a number of new public management (NPM) principles; for example, it downsized and reorganized the bureaucracy. The Conservative government of John Hamm, elected in 1999, furthered these reforms and created five core central agencies to assist the premier and cabinet. Also, a Department of Intergovernmental Affairs was established to coordinate federal-provincial and international activities, with a specific emphasis on equalization benefits and royalty payments for offshore resources. Hamm resigned and was replaced by a new Conservative leader, Rodney MacDonald, in February 2006. There are no current plans to drastically alter the structure and role of the political executive in Nova Scotia. In terms of international trade, however, there is limited involvement by the political executive. In fact, the province’s representative for international trade has “never encountered any pressure from the executive.” In his view, “ministers and politicians don’t want to get involved in the arcane details of international trade.” Occasionally this official is “expected to provide briefing notes or some general guidance, but that’s about it.”17 Though the new IGA was expected to increase executive oversight in this policy area, the department has focused primarily on equalization and offshore royalties. Therefore, given the informal nature of the trade policy process, and its entrenchment over time, it is highly unlikely that the role of the political executive will change significantly in the future. “This will never be like Quebec,” said the same representative. “This province has a system that works and we’ve never been required to run back and forth to cabinet for approval on trade issues.” Unless international trade threatens the economic stability of Nova Scotia, “further involvement from the executive is unlikely.”18 In contrast to New Brunswick and Nova Scotia, the political executive on Prince Edward Island is not driven by institutional considerations. According to Peter Buker, socio-political factors such as small geographic size and population, a reliance on Ottawa for financial support, and a conservative PEI political culture provide a better context for understanding executive

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input into the policy process.19 In addition, the province has a premier-driven system of governance. Buker suggests that for these reasons, most cabinet ministers “owe” their electoral success to the premier. The result is unified governments and an often compliant public. Moreover, “off island” government activities continue to be controlled by the premier. The constitutional negotiations of the 1980s and 1990s reinforced this reality, as has participation in forums such as the Council of Maritime Premiers and the Conference of New England Governors and Eastern Canadian Premiers. Yet it would be a mistake to characterize PEI’s political process as entirely dominated by elites. As Buker puts it, provincial premiers “have always operated in a constrained, broader political environment lying outside of cabinet and the Legislative Assembly; it is these broader factors that circumscribe the scope of their power, if not their power per se.”20 Many of these observations are relevant to understanding the executive’s influence on the foreign trade policy of PEI. Relations between the political executive and the province’s international trade representative are for the most part collegial. Intergovernmental Affairs is responsible for provincial foreign relations, but involvement by the political executive on matters of trade policy is on an ad hoc basis. According to one senior bureaucrat, foreign trade was historically “handled by one official in IGA but they have a very small shop and now focus primarily on domestic social issues.”21 The recent “potato wart” crisis offers a good example of this relationship. There was no division within cabinet regarding the need to challenge US protectionist measures, and the “provincial executive’s role was not about policy per se, but rather about management and political extra-provincial lobbying.”22 In contrast to New Brunswick, executive involvement in PEI has not shifted based on the political party in power. At the same time, though, it is important to understand the unique nature of political and institutional relationships on Prince Edward Island. Relative to other provinces, there is little separation between the legislative and administrative branches of government. PEI politics is based on grassroots relationships, and politicians and ministers have very close ties with the public. The same official noted that problems tend to be identified quickly and that “ministers provide clear direction to the bureaucracy on a wide range of issues, including trade policy.” For example, blueberry producers in Maine recently lobbied the US government to take action against exports of PEI bush blueberries. In response, PEI’s local blueberry association approached the province’s agriculture minister directly, and he responded by writing letters to both his federal counterpart and the federal trade minister. As PEI’s trade official pointed out, “this is often the nature of PEI politics ... Members of the executive can selectively play a direct role in this policy area compared to other provinces.” At the same time, however, the institutional relationship is also a “two-way street and IGA is certainly responsive to issues I bring

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forward based on developing trade disputes or ongoing international negotiations.”23 Generally speaking, Newfoundland and Labrador has not deviated from its executive model over the past three decades. In the early 1970s several developments occurred that shifted the province toward an institutionalized executive system. One catalyst was the 1972 Report of the Committee on Government Administration and Productivity, which criticized the existing cabinet process, highlighting its heavy workloads, lack of policy planning, and reactionary approach to Canadian federalism. In response to the report, a new Planning and Priorities Committee (PPC) was established and policy committees were created that focused on resources, government services, and social policy. After Brian Peckford’s government was elected in 1979, focus shifted to economic development and intergovernmental relations. Also around this time the PPC became more involved in resource development issues such as the bankrupt Come By Chance refinery. The election of Clyde Wells and the Liberals in 1989 introduced further innovations. Wells prioritized fiscal control but also maintained continuity at the central agency level, with the Treasury Board maintaining tight control. The subsequent governments of Brian Tobin (1996-2000) and Roger Grimes (2001-03) both adopted decentralized institutional models. The election of Danny Williams and the Conservatives in 2003 did little to alter the organization of the political executive, except that cabinet was downsized.24 Officially, Newfoundland’s international relations are the responsibility of the Intergovernmental Affairs Secretariat (IGAS), which is part of the province’s Executive Council. The Executive Council serves as the Newfoundland government’s central office. IGAS focuses mainly on federalprovincial relations, but its mandate includes contacts with other foreign governments and participation in the Conference of New England Governors and Eastern Canadian Premiers. Responsibility for international trade, however, is located in the Trade and Investment Division of the Department of Innovation, Trade, and Rural Development. That department is sometimes contacted by IGAS on technical issues, but this is typically on an ad hoc basis. Unlike previous premiers, Williams has a strong interest in trade and economic policy, especially as it relates to key sectors of the provincial economy. One bureaucrat noted that when it comes to the fisheries or oil and gas, for example, the premier “wants to know what’s going on, although this interest has a tendency to be issue dependent.” When Trade and Investment needs to clarify the government’s position on an issue, it typically prepares a cabinet paper for review.25 Saskatchewan, Manitoba, and Alberta Saskatchewan’s early commitment to social welfare programs contributed to a level of planning and rationalization not seen in other provinces for

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several decades. The result was the early demise of the patronage-driven civil service owing to a need for expertise in service delivery. In the modern era, successive New Democratic Party (NDP) governments maintained a commitment to state planning, especially in terms of economic policy. In the 1970s, for example, Saskatchewan took ownership of and control over a number of natural resources, including potash, natural gas, uranium, oil, and other minerals, in an attempt to establish a viable provincial economic base. Conservative governments during the 1980s attempted to privatize Crown-owned utilities, but this came to an end when Roy Romanow of the NDP was elected premier in 1991. It was Romanow who created the Crown Investments Corporation, which controlled a number of Crown corporations, including SaskTel, SaskEnergy, SaskPower, and SGI (Saskatchewan Government Insurance). New public-private enterprises, such as the Saskatchewan Trade and Export Partnership (STEP), also assumed important roles in the provincial economy. Lorne Calvert, a former Romanow cabinet minister, maintained most of the province’s institutional framework when he became premier in 2001.26 At this time, newly elected premier Brad Wall has not taken steps to dismantle existing public-private relationships. Based on these historic realities, it is not surprising that Saskatchewan’s political executive has played a more active role than most others in trade policy. Despite the long tenure of the NDP, the province’s political executive did not oppose liberalized trade on ideological grounds. During the NAFTA negotiations, for example, NDP governments in other provinces “encouraged” Saskatchewan to coordinate its policy positions with their own. Romanow, however, was a pragmatist; in the words of one long-time Saskatchewan official, “he always promoted policies that served Saskatchewan’s economic interests, especially agriculture.”27 For the most part, Calvert continued this approach to foreign trade, though he did not involve himself directly in the policy process. There were some exceptions to this. For example, he had an interest in agricultural subsidies and was active in policy decisions related to these practices. He was also engaged during the BSE crisis. Yet this ministerial involvement should not be overestimated. As with other provinces, most technical issues are directly “handled by specialists within specific bureaucratic departments.”28 Manitoba’s political executive has undergone several periods of centralization and decentralization. Edward Schreyer’s NDP government (1967-77), for example, adopted central planning, reflecting the past influence of the Co-operative Commonwealth Federation (CCF). During his four years as Conservative premier (1977-81), Sterling Lyon attempted to dismantle most of Schreyer’s institutional reforms. Howard Pawley, the NDP premier between 1981 and 1988, returned the province to a Schreyer-style approach by centralizing policy processes and downsizing cabinet. This continued after Gary Filmon, a Conservative, was elected premier in 1988. When Gary Doer and

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the NDP replaced Filmon in 1999, reforms were initiated that had implications for provincial foreign trade policy. First, the ministries of Rural Development and Urban Affairs were replaced with the Ministry of Intergovernmental Affairs, which subsequently became the Ministry of Intergovernmental Affairs and Trade. In addition, the NDP established a new Community and Economic Development Committee (CEDC) to coordinate economic policy.29 According to Joan Grace, this new design reflected Doer’s desire to centralize executive decision making and facilitate “the concentration of power at the centre.”30 Manitoba’s political executive involves itself in foreign trade much like Saskatchewan’s does – that is, it tends to limit itself to a narrow range of politicized issues. “In most cases we share a similar philosophy with Saskatchewan,” said one Manitoba official. “External trade is simply far too important for us so we tend to be very pragmatic and let the policy experts represent provincial interests.”31 When trade issues do go to cabinet they are processed by the CEDC, but this usually involves coordinating policy and developing specific “project teams.” A senior representative made it clear that “there is executive interest in trade policy but it is oversight and not direct involvement in the nuts and bolts of actual policy.” So it is only within a “narrow range of issues that we need to seek direction, and that’s not common.” Also, cabinet is organized in such a way that responsibility for foreign trade policy is located in Industry, Economic Development, and Mines rather than in Intergovernmental Affairs and Trade. This is owing to a focus on trade promotion in Intergovernmental Affairs and to the fact that the official responsible for trade policy in Industry, Economic Development, and Mines is also responsible for a broad range of issues, including economic development. This is not to suggest that Intergovernmental Affairs and Trade has no engagement on trade policy; rather, “linkages are informal and not formal.”32 “Premier-centred” executives long dominated provincial politics in Alberta. When Peter Lougheed and the Conservatives assumed control in 1971, however, reforms were adopted to “rationalize” relations between the political executive and the bureaucracy. Given the province’s increasing reliance on oil revenue, Lougheed wanted economic policies to be generated by a professional bureaucracy with significant guidance from the premier and cabinet. Don Getty, who replaced Lougheed as Conservative premier, adopted a similar organizational structure. When Ralph Klein became premier in 1991 he initiated sweeping changes designed to open up the government’s policymaking processes. Ultimately, however, his reforms transferred greater control and oversight to the premier. First, Klein politicized the provincial executive’s staff by assigning communications officers to the office of every government minister. In an attempt to streamline policy processes he also “blended” cabinet and caucus committees to reflect a hybrid of American and British

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traditions. Cabinet committees were replaced by Standing Policy Committees (SPCs), which were restructured following the 1997, 1999, and 2001 provincial elections. The Agenda and Priorities Committee served as a coordinating mechanism for these committees.33 For the most part, though, ministerial involvement in Alberta’s foreign trade policy is consistent with other provinces. In Alberta, public support for liberalized trade is such that there is very little debate within cabinet on foreign trade policy. Indeed, the government’s own polls have found that over the past three decades, Albertans’ support for “free trade” has run at 70 to 75 percent.34 “We obviously take ministerial direction and advice into consideration,” noted one provincial bureaucrat, “but the lack of politicization within the province related to trade policy is such that most bureaucratic departments are very autonomous.” This is not to suggest that there are no disagreements on policy issues, but “for the most part the executive and the bureaucracy both see the wisdom in pursuing open markets for Alberta, especially in terms of energy, grains, and red meat.”35 Direct involvement by the political executive tends to be limited to highly politicized issues, such as Alberta’s efforts to reopen American borders following the BSE crisis. In that situation, ministerial involvement was more significant, but not to the point that executive priorities conflicted with bureaucratic concerns related to long-term planning and policy implementation. Quebec Following the Quiet Revolution, and the traditional cabinets of Maurice Duplessis, Quebec modernized its government institutions. The Liberals under Jean Lesage initiated bureaucratic reforms and sponsored large public enterprises, including Hydro-Québec, first founded by the Parti Libéral du Québec (PLQ) government of Adélard Godbout in 1944, and the Quebec Deposit and Investment Fund. According to Luc Bernier, these initiatives – which were not always well planned – were meant to encourage province building and to transfer power and economic resources to the state.36 Though the Liberals under Robert Bourassa continued to pursue similar economic objectives, the power of the cabinet and premier did not significantly increase during the 1970s. It was René Lévesque and the Parti Québécois (PQ) that built on the earlier centralized framework developed by Lesage. For much of the next decade, constitutional issues dominated the Liberal governments of Bourassa and Daniel Johnson. The subsequent election of Jacques Parizeau and the PQ focused government attention on the 1995 referendum. Under the current Liberal government of Jean Charest, however, economic issues have again become the focus of the political executive. Responsibilities for these initiatives are divided among the ministers of Finance, Treasury Board, Labour, Tourism, and Economic and Regional Development, which has replaced Industry and Commerce. In the tradition of Quebec politics, there

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are also separate ministers for Intergovernmental and Aboriginal Affairs, Culture, and International Relations.37 Despite these reforms, Quebec’s foreign economic policy continues to be guided by three long-standing principles. First, the political executive has always stressed economic and sectoral priorities when negotiating and implementing international trade commitments. Second, the provincial government consistently calls for increased consultation and direct provincial involvement when Ottawa is formulating foreign policy. Third, both the Liberals and the PQ have pursued greater autonomy for Quebec in foreign relations. These priorities were clear during the FTA and NAFTA negotiations. During NAFTA discussions, for example, Quebec’s cabinet strived to maintain the gains made under the FTA while excluding areas, such as publishing and language rights, considered vital to the province’s economy and culture. The province was also interested in opening the Mexican market to Quebec goods and ensuring that it remained an attractive location for investment. Quebec has supported trade liberalization for various reasons. Bourassa, for example, was an economist by training who understood the virtues of freer trade with the United States. He also saw the Canada-US Free Trade Agreement (FTA) as a means to bolster the province’s status in Canadian federalism. Opposition to the FTA by David Peterson’s Liberal government in Ontario enabled Quebec to play a leadership role during negotiations. Indeed, according to one observer it was Quebec that often spoke for the “provinces on matters of general concern while searching for enough common ground with the federal government to preserve forward movement.”38 Quebec’s prominence was bolstered further by the hiring of Jake Warren, Canada’s former chief negotiator during the Tokyo Round of the General Agreement on Tariffs and Trade (GATT).39 The province’s role as a federalprovincial facilitator continued into the NAFTA negotiations, especially when it came to the Side Deals on labour and the environment. A senior official from another province noted at the time that “Quebec is the key. They are the province that continues to gain control and influence in key international policy areas, and if they back out [of the Side Deal compliance negotiations] others will likely follow.”40 The PQ under Bernard Landry, which held power in Quebec until April 2003, also emphasized the economy. For example, it pursued stronger economic ties with the United States, opening trade offices in Los Angeles, Miami, Chicago, and Boston.41 Yet Landry also highlighted the province’s shifting status in Canadian federalism by resisting efforts to coordinate international initiatives with the federal government. Similar tensions were evident during the lead-up to the Summit of the Americas and its focus on the Free Trade Area of the Americas (FTAA), in 2001. As one Quebec official pointed out, there was “considerable disagreement between Ottawa and the province on Quebec’s role during trade talks for the FTAA prior to the 2001

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meetings in Quebec City.” The same representative made it clear, though, that federal-provincial differences were not limited to trade policy. In fact, those differences were similar to ones “across a wide range of issues, including education and health.”42 The political executive, however, was not the only architect of Quebec’s new role in Canadian federalism during the PQ era. The PQ has an International Relations Committee that provides strategic direction to the party. This committee often encouraged Landry to challenge Ottawa on foreign affairs. Daniel Turp, a recent chair of that committee, used the forum to argue for Quebec’s direct participation in those international organizations that focus on provincial areas of jurisdiction.43 Pressure from the committee also contributed to legislation in 2002 requiring National Assembly approval of all international agreements negotiated by the province or the federal government.44 At the same time, however, it would be inaccurate to suggest that the committee significantly altered the PQ’s already ambivalent position toward Canadian federalism. As Nelson Michaud points out, the PQ’s response to further coordination with Ottawa on foreign affairs was “unanimously negative, running from a critique of their effectiveness (by the party), to an implicit rejection (by the minister) all the way to an explicit rejection (by the government).”45 Not surprisingly, these positions were also consistent with the party’s broader goal of independence. Charest’s Liberal government, however, renewed Quebec’s interest in federal-provincial relations, though not at the expense of provincial autonomy. The Liberals’ position was outlined in a policy document drafted by Benoit Pelletier in 2001 while the party was in opposition. In A Project for Quebec: Affirmation, Autonomy, and Leadership, the Liberals called for a reevaluation of the Gérin-Lajoie doctrine and noted a need to protect Quebec’s interests within the limitations of the Canadian constitution.46 These themes were again emphasized after the Charest government was elected. In a speech given in Quebec City in September 2004, Quebec’s Minister of International Relations, Monique Gagnon-Tremblay, stressed that Quebec’s “relations with Ottawa ... [existed] in a climate of cooperation.” She also highlighted commonalities between both levels of government on issues such as the Kyoto Protocol and cultural diversity. Finally, she expressed Quebec’s desire to return to its former role as an advocate of provincial rights within federalism. Besides the Council of the Federation, she noted Quebec’s efforts to improve linkages with other provinces that “shared the desire to play a greater role on the international scene.”47 In the month following Gagnon-Tremblay’s speech, the Quebec government announced its intention to participate with France in a trade mission to Mexico. This mission involved Charest and the French prime minister, Jean-Pierre Raffarin, and included a meeting with the Mexican president, Vincente Fox. It received considerable attention in the media, yet it did not

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draw heavy criticism from Ottawa. In fact, Paul Martin pointed out that the trip was consistent with past commercial missions. An earlier state visit to France, when the premier met the French president, Jacques Chirac, without Canada’s ambassador to France, had drawn a similar response. Indeed, Pierre Pettigrew, at the time Ottawa’s foreign affairs minister, defended the visit, citing new federal guidelines for provincial international activity created in 1999.48 The Liberal provincial government continued to pursue a number of initiatives consistent with those of previous PQ governments. Though the Liberals adopted an approach more conducive to cooperative federalism, political executives in Quebec continued to emphasize provincial autonomy, international status, and a strong role in federal-provincial relations in matters of international trade. Ontario The introduction of an institutionalized cabinet system in Ontario began in 1969 with the Committee on Government Productivity (COGP) commissioned by Conservative premier John Robarts. Remarkably, most of that committee’s recommendations, ultimately adopted by Premier Bill Davis, remained in place for almost three decades. The arrival of Mike Harris’ Conservative government in 1995 represented a return to a premier-dominated cabinet. Within a year the Harris government, as part of its “Common Sense Revolution,” had made significant cuts to the public service, reduced social assistance by 20 percent, and amended provincial labour laws. In 1999 it introduced further reforms, which included the establishment of a comprehensive Priorities, Policy, and Communications Board (PPCB) and several new policy committees. A Statutory Business Committee was also created, and “Superbuild” was initiated to coordinate public-private partnerships for infrastructure and investment. Though Harris suspended most policy committees as he neared retirement, his successor, Ernie Eves, resumed many of the same institutional practices. When Dalton McGuinty assumed office in 2003, the Liberals made a commitment to integrate caucus with cabinet – an issue that Eves, too, had taken steps toward during his brief period as premier.49 Ontario’s political executive was somewhat unique in that it did play a direct role in the province’s decision to oppose both the FTA and NAFTA. In 1988 David Peterson’s Liberal government had announced that it would oppose the proposed FTA. According to G. Bruce Doern and Brian Tomlin, Peterson’s decision damaged Ontario’s credibility with Ottawa and the other provinces during the FTA negotiations. While Ontario attended meetings and briefings, it refused to participate in any meaningful context. Only during the last stages of negotiations, when Peterson realized that a deal was inevitable, did Ontario begin to increase its interest. As Doern and Tomlin suggest, Peterson’s strategy erred badly “first in assuming Ontario could stop

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the negotiations, then in betting there would be no agreement and, most important, in deciding to play the role of a spoiler only, rather than attempting to shape the Canadian negotiating position.”50 Fortunately for Ontario, its key export industry, automotive vehicles and parts, already had guaranteed access to the US market through the Auto Pact. Donald Abelson and Michael Lusztig, however, doubt whether Peterson was really interested in stopping the FTA. The Liberals, for example, did not carry through on their original threat to challenge the constitutional legitimacy of the proposed agreement. In addition, the Peterson government did not proclaim legislation it had passed regarding energy and water exports. For Abelson and Lusztig this was the most telling indication of Peterson’s true intentions, for the Liberals had the support of the NDP opposition to pass that legislation. Abelson and Lusztig argue that ultimately, Ontario’s position was tied to the strength of organized labour in the province and to the political and economic costs associated with failing inefficient businesses.51 Thus Peterson was motivated by the desire to ensure that the FTA was perceived as an “imposed” agreement, reluctantly accepted by Ontario. Ministerial interest in foreign trade continued with the subsequent election of the NDP. Early on, Bob Rae’s government fully engaged itself with the NAFTA process, despite its preference for ongoing Uruguay Round negotiations. There was also strong support for liberalized trade within various branches of the Ontario bureaucracy. In fact, the Ministry of Economic Development and Trade (MEDT) supported greater liberalization; this was evident in the appointment of Robert Johnstone, a former federal trade negotiator and deputy minister, as Ontario’s chief NAFTA negotiator.52 At the same time, though, there were increasing signs that Rae and senior members of the Premier’s Office were beginning to question NAFTA. Conservative advisers in Ottawa, for example, were overheard in a taped telephone conversation in September 1992 referring to Rae’s hardening position as typical of “that old left-wing, crypto-communist, anti-free trade, NDP-Liberal con group.”53 During that conversation, James Ramsay, the chief of staff for the Minister of International Trade, Michael Wilson, also suggested that Rae’s opposition would force the “coalition which has been sitting on their hands over the past two or three years” to get “out behind us again.”54 Ontario’s concerns were further entrenched in January 1993 when Rae transferred responsibility for the negotiations away from MEDT and to the Ministry of Intergovernmental Affairs (MIA). Several officials in MIA were especially critical of MEDT, believing that its “pro-business” orientation prevented it from protecting provincial interests. Rae also announced the creation of an Ontario cabinet committee to study NAFTA. Some provincial bureaucrats, however, were critical of Elmer Buchanan, the chair of the hearings, for not “facilitating any real dialogue on the issue.” In fact, the

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agriculture minister “always made it clear in his opening statement that Ontario was opposed to NAFTA.”55 There was also the perception within government that “the Ontario Cabinet Committee was simply a symbolic gesture designed to appease the Maude Barlows in the crowd.”56 Not surprisingly, the Final Report of the Cabinet Committee on the North American Free Trade Agreement, published in June 1993, cited problems with Ottawa’s positions on energy, water and forest resources, social policy, and the environment. As a result, the committee recommended that “the Government of Ontario assess the legal, legislative, and policy actions it can take to protect the interests of the people ... in the face of the NAFTA.”57 In the wake of these recommendations, Frances Lankin, Minister of Economic Development and Trade, outlined Ontario’s revised NAFTA strategy in a speech on 28 July 1993. Specifically, she announced that the province would retain legal counsel to challenge the federal government’s constitutional authority to implement NAFTA. In addition, Ontario was going to re-examine water export legislation first introduced by the Liberals with the unproclaimed Water Transfer Control Act of 1988. Lankin also pledged funding for a research project on “social dumping” that would address inadequate labour and environmental protections.58 These points were further developed in a subsequent news release that highlighted the need for an exemption on bulk water exports and other large-scale water diversion projects. The energy proportionality provisions of NAFTA, which guaranteed access to Canadian energy for American consumers even in times of shortage, were also cited as a concern. Other issues included the pursuit of a social dumping complaint regarding Mexican subsidies and the need to prioritize Ontario’s green technology initiatives. According to Abelson and Lusztig, though “little documentation exists, sources within MEDT and MIA suggest that Ontario’s policy shift created significant disruption of the NAFTA process.”59 At the core of Ontario’s opposition was the constitutional challenge. Specifically, officials in MIA hoped that the legal action would convince Washington that NAFTA faced serious difficulties in Canada. The only problem was that, in the words of one observer, “the Americans barely burped.”60 In addition to this, the Ontario Attorney General’s Office (AGO) pointed to existing judicial precedents and cautioned against further action. “It was not hard to figure out what was going on,” said the same representative, but even if MIA “saw the rats leaving a sinking ship it was not prepared to give up its quest to ruin the NAFTA.” The response to the legal challenge in the rest of Canada was also limited. A federal official called the plan “laughable”; another provincial counterpart said it “was difficult to support something that had no link to reality.”61 At the same time, however, there was some concern in other provinces that Ontario might actually move forward with the challenge. As one official suggested, there was “too much at stake ... to sit on the sidelines and let

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Ontario finish this thing on their own. People tend to lose sight about what this case is all about. It really has nothing whatsoever to do with the NAFTA. It is really about provincial rights and the division of powers in Canada.”62 Ultimately, all of these efforts had only a minimal impact on NAFTA’s implementation. Sensing potential problems, Mulroney ratified the agreement by passing legislation in the House of Commons without requesting direct legitimization from provincial legislatures. By December 1994, a year after the defeat of the federal Conservatives and the arrival of Chrétien’s Liberal majority, the Ontario government was hinting that it might withdraw its judicial challenge. Indeed, Laurie Stephens, a spokesperson for the Rae government, publicly speculated that “Ontario would likely lose ... [its] legal challenge since it could not prove it had suffered any damage by a federal intrusion into its jurisdiction with the implementation of NAFTA.”63 In the end, the province did not pursue either the reference case or proposed legislation on water protection. Within two years of NAFTA’s ratification the Rae government had been voted out of office. This is not to suggest that the subsequent Harris government represented an era of cooperation between Ottawa and Queen’s Park. In fact, Harris often clashed with the federal government on a wide range of issues. In matters of international trade, however, Harris ensured that Ontario’s relationship with Ottawa was channelled through MEDT. He did not want Ontario’s trade priorities damaged as a result of other federal-provincial conflicts.64 He also had a tendency to focus on export promotion rather than trade policy. One example of this selected interest was Ontario’s leading role in Canada’s position on the WTO’s General Agreement on Trade in Services (GATS). Given the province’s significant services sector, Ontario was asked for direct input for Canada’s original and revised GATS offers. In response, MEDT prepared a formal proposal and worked closely with numerous ministries to ensure that the political executive would approve it. Despite these efforts, MEDT was repeatedly told that the cabinet agenda was full; ultimately, the proposal was not reviewed within the formal executive process. Instead, MEDT worked with the Cabinet Office, and eventually several recommendations were sent directly to the premier. Yet even at that point, MEDT officials “had to use the fact that the minister was going to an international trade meeting ... to gain access.”65 For the most part, the election of Dalton McGuinty’s Liberal Party did not represent a significant shift in the role of Ontario’s political executive. Though the province’s contribution to Canada’s revised GATS position still required cabinet approval, MEDT made no attempt to engage the formal process. This time, MEDT consulted directly with officials in other ministries and isolated specific areas of concern. Once this informal approach had created a consensus, a meeting with the premier was requested. Once again, however, there was no urgency to address this issue within the political

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executive. According to the same representative, “a similar tactic was needed to gain access to McGuinty.” In the end, MEDT had to highlight an upcoming trade ministers’ meeting and the need for Ontario “to clarify its position.” This demonstrates “cabinet’s minimal interest in matters of international trade.”66 British Columbia The political executive in British Columbia was long isolated from other federal and provincial officials in Canada, especially during the Social Credit era of W.A.C. Bennett. In later years, however, BC fluctuated between centralized and decentralized systems of decision making. The election of the NDP and Dave Barrett in 1972 established an activist cabinet model with an empowered political executive and considerable departmental autonomy. The return of Social Credit under Bill Bennett in 1975 shifted power to a central staff located in the government’s Intergovernmental Relations Office and the Premier’s Office. In contrast, according to Norman Ruff, the Mike Harcourt era was the “premier in a plexiglass bubble” period owing to Harcourt’s isolation from the policy process. The “colleague-intimidating, proactive, get-things-done political style of his successor” Glen Clark resulted in a premier-dominated model. Finally, the election of Gordon Campbell’s Liberals in 2001 further isolated power in the centre, with the Premier’s Office absorbing the Public Affairs Bureau, the Crown Agencies Secretariat, and the Intergovernmental Relations (IGR) Secretariat. In Ruff’s opinion, the transfer of power to Intergovernmental Relations reflected the priority that Campbell placed on both interprovincial and international relations.67 Generally speaking, these institutional reforms had only a minor impact on BC’s foreign trade policy. The exception to this, ironically, was during Harcourt’s time as premier. Harcourt was not an intrusive participant in the policy process, but he did play an active role in the province’s opposition to NAFTA. According to one provincial bureaucrat, Harcourt’s NDP government had been elected with support from numerous groups “seeking influence” as a reward for long-time support.68 Indeed, BC’s powerful labour lobby was cited as the catalyst for the NDP’s decision to question its role in the NAFTA negotiations. Given the late stage of the talks, and the fact that there were issues on the table of vital interest to the province, the NDP decided to remain in the NAFTA consultative process – but only as a reluctant and vocal critic. Trade Minister David Zirnhelt announced that BC would attend federal-provincial briefings on NAFTA but that it would no longer “actively” participate in them – a strategy that was immediately praised by Ken Georgetti, the leader of the BC Federation of Labour.69 This decision to attend the meetings as an observer perplexed Ottawa as well as a number of the other provinces. One Vancouver Sun columnist noted that the “BC government’s statement on the North American free trade talks ... [was]

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strategically and tactically so foolish that one ... [had to look] for political reasons for it.”70 The same commentator suggested that organized labour’s hostility to NAFTA was at the core of NDP provincial trade policy. Some observers also suggested that besides organized labour, specific individuals in the provincial government had significant influence in this area of policy. Clark, for example, whom Harcourt had named Minister of Finance and Corporate Relations as well as Chair of the Treasury Board, was often singled out as a source of opposition to liberalization. This had potential implications for trade policy when Clark became the Minister of Employment and Investment in 1993. That ministry, which included the Trade Policy Branch, was important given its role in determining BC’s negotiating position for both the Agreement on Internal Trade and NAFTA. According to G. Bruce Doern and Mark MacDonald, Clark’s position on these agreements should not be surprising. After all, he had entered politics with a history of union activity and “was predisposed to be skeptical, even obstinate, about the process that was underway.”71 Also, Clark had entered cabinet somewhat distrustful of the existing bureaucracy. As one representative suggested, “this was especially the case with Trade Policy. He came in and saw the department filled with lawyers, economists, and MBAs and assumed it was a pro-business forum.” It was clear that other ministries “such as Agriculture and Forestry were not becoming politicized but [Trade Policy] was, because Clark was the minister in charge – and it got even worse after he became premier.”72 Some observers, though, argue that this is not a fair or accurate assessment of Clark’s position on trade policy. One senior official suggested that Clark was often labelled an ideologue without justification. First, though “Clark was on the left he was definitely pro-growth.” Also, he focused more “on trade promotion and the Agreement on Internal Trade (AIT) than international trade and ultimately, his position on NAFTA was a political decision designed to appease a divided cabinet and caucus.” In fact, “there was surprisingly little political discussion of NAFTA at that level and most of it centred on whether or not BC should support Ontario’s proposed constitutional challenge of the agreement.” What “needs to be remembered,” he continued, “is that once Clark became premier he had to balance a number of policy issues and he was not going to place NAFTA ahead of export growth and internal trade.” Ultimately, “people forget that Clark was first and foremost a provincial rights advocate and not an anti-NAFTA crusader.”73 Clark’s position on liberalized trade was perhaps misrepresented; even so, critics did argue that he influenced executive and bureaucratic appointments in this policy area. Vaughn Palmer, for example, has contended that Clark, along with Adrian Dix, his chief political adviser, arranged for the appointment of Tim Gallagher, now a senior policy analyst for Environment Canada, to a number of important positions, including in Trade Policy.74 That said,

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a former official with close ties to Clark has argued that any focus on Gallagher is “absolutely ridiculous.”75 Specifically, “Gallagher’s role, responsibilities, partisanship, and supposed connection to the premier was negligible.” And another high-ranking member of Clark’s executive has suggested that “Palmer’s insight makes for good political commentary, but it is unfair to Gallagher and other Trade Policy appointments, who were all highly knowledgeable.” In fact, “Clark made a point of ensuring that qualified officials were in place given the anti-NAFTA position of some members of caucus.” Furthermore, “he also maintained a large number of former Social Credit appointments, that served ... [the] government very well.” In sum, suggestions of “rampant NDP politicization of Trade Policy are hardly accurate.”76 Ultimately, only one appointment to Trade Policy was the result of direct intervention from Clark. This occurred when Clark requested a discussion paper outlining provincial options in a non-free trade scenario. The subsequent report, which Clark jokingly referred to as the “Albanian recommendation,” was viewed as an exercise within Trade Policy to challenge its image as a biased supporter of liberalization. In the words of one senior bureaucrat, “Clark saw the document as an almost Stalinist critique designed to appease him, and that’s when he decided to make changes, notably by recruiting ... a new director of Trade Policy.”77 Another former official, however, made it clear that this appointment was “hardly political.” Though the new director had previous ties with the BC Federation of Labour, he did not enter the department advocating an antiglobalization perspective. In fact, prior to being appointed to Trade Policy, he had served as a special adviser to the ministry on economic development issues.78 According to a representative from Atlantic Canada, the new director actively defended BC’s interests, though at times he was somewhat “quixotic” about his opposition to certain issues. Regardless, “just because he challenged positions readily accepted by others did not make him a ‘political’ apologist for the NDP.”79 Clearly, then, executive appointments to Trade Policy were not as politicized as Palmer has suggested. At the same time, it is important to note that some members of the bureaucracy did question their role and influence. “Look, I have no problem with political appointments,” said another senior representative. “These are orders-in-council and government has the right to appoint whoever they want. What Clark was doing was nothing new. Even Bill Vander Zalm hired people from outside of the bureaucracy to serve as deputy ministers and assistant deputy ministers.”80 The difference, however, was that Clark and Harcourt established the precedent of appointing these individuals as low in the bureaucratic hierarchy as the policy adviser level. This, according to another official, raised questions regarding the integrity of the policy process, especially given Clark’s supposed stance on international trade. “It got to the point where you really had to be careful about what you said.”81

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Notwithstanding these concerns, there is evidence that new perspectives in the department had an impact on BC’s foreign policy. Specifically (see Chapter 6), Trade Policy became a vocal advocate of the need for a clear definition of social services in both NAFTA and the WTO. In terms of NAFTA, several officials were critical of Canada’s approach to the agreement’s Annex II, “Reservations for Future Measures.” Trade Policy encouraged the cabinet to include the need for stronger implementing language in BC’s negotiating position. This pressure resulted in “public education, public training, health, and child care” being explicitly included in provisions related to cross-border services and investment.82 The province also argued for a broader exemption related to Articles I:3(b) and (c) of GATS. In this case, however, federal and other provincial officials believed that the existing language of Article I:3(c), which allowed for the protection of services “supplied neither on a commercial basis, nor in competition with one or more service providers,” was sufficient to protect social services at both levels of government.83 Thus, with GATS, pressure from the department influenced BC’s negotiating position, but unlike in the case of NAFTA, that pressure did not significantly alter Canada’s trade policy or the development of international norms and standards. In the months following the defeat of the NDP in May 2001, the Liberal government of Gordon Campbell quickly dismissed several NDP appointments, including the director of Trade Policy. Not long after this, the Liberals adopted the same informal appointment process as had been followed by the Socreds and the NDP. Though these placements left Trade Policy largely untouched, there are several examples throughout government – especially in communications – where a selected number of ministerial assistants have been promoted to director positions.84 As the following chapter makes clear, however, any real or alleged executive influence over Trade Policy (now the Trade and Competitiveness Branch of the Ministry of Economic Development) is not the sole determining factor in BC’s foreign trade policy. Several line departments play significant roles, such as the Ministry of Forests and the Ministry of Agriculture, Food, and Fisheries. Also, current institutional restructuring by the Liberals is such that other ministries, including the Intergovernmental Relations Secretariat (IGR), have been integrated into the foreign policy process.85 Conclusion The purpose of this chapter was to answer three questions: First, has the evolution of an institutionalized cabinet system had an impact on provincial foreign trade policy? Second, does executive interest and engagement vary among provinces in this issue area? And third, if it does, what implications does this have for Canada’s global trade relations and for the evolution of international norms and standards?

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In terms of organization, most provinces have shifted from traditional cabinets to institutionalized systems based on rational organizational principles designed to increase centralization. These reforms, however, have not dramatically altered the influence of provincial trade officials. Even when provincial executives have taken a direct interest in trade policy, such as in Ontario and BC during the NAFTA negotiations, there is no evidence this has had a significant impact on Canada’s trade policy or its negotiating position. Overall, the political executive tends to limit involvement to crisis situations, trade promotion, and politically relevant trade disputes. In extreme cases, some provinces – such as Alberta – have directly approached high-ranking members of foreign executives, though this activity is not common. Generally, then, provincial political executives in Canada play a surprisingly minor role in the detailed realities of foreign trade policy, especially relative to other issues in Canadian federalism. Also, it is not apparent that any direct engagement by the political executive has had an impact on emerging or existing international trade regimes.

5 Bureaucratic and Legislative Pressures

In order to evaluate the role of the bureaucracy and the legislature in the formulation of provincial foreign trade policy, it is necessary to examine issues of capacity, coordination, and influence. Provincial bureaucrats have exercised considerable autonomy in this policy area. This is owing to the small number of officials specializing in trade policy in most provinces. In the past these experts were usually located in separate departments within larger economic development ministries. Today, many of these representatives have been moved into centralized offices of intergovernmental affairs. This bureaucratic restructuring has not diminished the influence of these officials. At the same time, however, most provincial governments continue to face budget and staffing challenges related to trade policy. These workload issues, and the need to develop technical expertise within specific sectors, have resulted in the development of an international capacity in several line departments as well. In some provinces, such as Alberta, Quebec, and New Brunswick, there are institutional mechanisms to coordinate this activity. In other provinces this interaction is ad hoc. In addition, the legalization of trade policy and the prominent role played by outside legal counsel have placed additional financial strains on provinces and raised normative questions of accountability and transparency. Finally, provincial legislatures play a minor role in trade policy. This is due to party discipline, a lack of legislative activity in this policy area, the high turnover of elected officials, and the failure of most voters to identify with international trade at the constituency level. The Bureaucracy: Issues of Organization and Capacity Kim Nossal’s observations regarding the influence of bureaucratic actors at the federal level are also applicable to Canadian provinces. In terms of the bureaucracy, he notes that in theory it has the least influence over the policy agenda as these objectives are the responsibility of the political executive

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and the state’s elected leaders. Nossal, however, does suggest that the bureaucracy has a distinct advantage over the executive, especially in terms of expertise and the control of information.1 Federal bureaucrats have functioned in an evolving policy process over the past three decades. As Donald Savoie has noted, “two policy-making processes” have emerged in Ottawa. The prime minister and his inner circle of advisers have centralized policy by removing ministers, central agencies, departments, and career officials from specific policy decisions. In the aftermath, government officials have been left to “pick up the pieces” in a secondary policy process. What has emerged is a federal bureaucracy that is more “horizontal, consultative, and porous.”2 According to Marcel Massé, a former senior cabinet member, this new “postmodern government” requires politicians and bureaucrats to consult, explain, and understand policy issues with a wide range of actors.3 Not surprisingly, provincial governments have also struggled with these “postmodern” challenges, especially in matters of trade policy. Ontario and Quebec The two provinces with the most developed bureaucratic commitment to international trade are Ontario and Quebec. In Ontario, the responsibility for negotiating and implementing foreign trade agreements rests with the Trade and International Policy Branch of the Ministry of Economic Development and Trade (MEDT). That ministry has a number of divisions with varying responsibilities. Specific tasks include export development, investment, small and medium business, science and technology, and various agencies, boards, and commissions. The Trade and International Branch is located within MEDT’s Employment and Business Development Division. As the name implies, this division focuses largely on trade and investment promotion; negotiation and compliance are also key issues. As with other provincial bureaucracies, the Trade and International Branch has changed its role over time. Some sectors, such as automobiles, have long been excluded from its mandate. Ongoing WTO service negotiations, North American Free Trade Agreement (NAFTA) Chapter 11 considerations, and international trade disputes are all current priorities in the department. The Trade and International Branch sometimes has intermittent input on specific files. In 2002, for example, one department official worked with the Ministry of Natural Resources on the issue of softwood lumber. By 2004, however, the Trade and International Branch was no longer involved, owing to philosophical differences related to ongoing WTO and NAFTA disputes.4 Ontario has faced staffing and budget challenges in this policy area. At one time the Trade and International Policy Branch consistently employed twelve or thirteen policy advisers. During the NAFTA negotiations and the Uruguay Round, extra staff was added. By 2005, however, the department had been reduced to nine, with one official on leave with the federal

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government and another on a one-year professional sabbatical. In both cases there was no money available to replace these representatives, even temporarily. This placed additional pressure on the department; however, one member noted that this was mitigated by the collapse of the Free Trade Area of the Americas (FTAA), stalled WTO negotiations, and the MEDT’s reduced responsibility for softwood lumber.5 Quebec has devoted significant bureaucratic resources to provincial foreign policy over the past three decades. To coordinate this activity, the province has its own Ministry of International Relations (MIR), established by the Parti Québécois (PQ) in 1985. Since that year, under both Liberal and PQ governments, the department has seen its mandate shifted, with international trade and immigration being moved in and out of MIR. In 2001 the PQ highlighted Quebec’s international objectives with a new MIR strategic plan. That document covered a wide range of issues but prioritized the United States in relation to Quebec’s economic interests. France, however, remained the province’s main focus in terms of political and cultural affairs.6 As the previous chapter suggested, the Quebec Liberal Party has not adjusted the province’s foreign policy in any significant way, though it has placed more emphasis on federal-provincial coordination in the pursuit of Quebec’s international autonomy. It is interesting that international trade policy is not a primary focus of the Ministry of International Relations. During the NAFTA era, the province had a separate department for international trade. These responsibilities were then transferred into MIR; still later, they came under the control of Industry and then the Ministry of Finance. By 2003 foreign trade policy was located in the Ministry of Economic and Regional Development (MERD), which subsequently became the Ministry of Economic Development, Innovation, and Export Trade. This department has a staff of approximately one hundred. In reality, only twelve or so work specifically on trade policy, given that the department’s primary commitment is to trade promotion. During the Uruguay and NAFTA negotiations, however, staffing levels were close to thirty.7 As in other provinces, line departments also have officials working on matters of trade policy. Responsibility for internal trade is located in the Premier’s Office. Western Canada When the New Democratic Party (NDP) came to power in British Columbia in 1991 it gained control of a bureaucracy that had already negotiated the Canada-US Free Trade Agreement (FTA) and was completing discussions regarding NAFTA. Its bureaucracy had a reputation for participating somewhat reluctantly in the continental free trade process. Indeed, when NAFTA was first announced, BC warned that the agreement had the potential to create a “fortress US” approach to economic policy that was damaging to Canadian

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interests. This position was not ideological, given that most policy officials had worked under previous Social Credit governments. Rather, concern about a broader hemispheric agreement reflected the fact that BC already enjoyed access to the then thriving Asia-Pacific market and had strong economic ties with several American states in the region. By then, the province’s softwood lumber industry had also been the focus of a number of US trade complaints for more than forty years. Declining bureaucratic resources presented a challenge for BC trade officials. The province had once been a leader in promoting provincial rights within Canadian federalism, but for economic and political reasons it no longer played that role. According to one official, the province lacked both the money and the staff to lobby on most matters of international trade. As much as BC wanted to build closer relations with the federal government, it “couldn’t afford to keep travelling back and forth to Ottawa or attending conferences in Geneva.”8 Also, the political reality was such that some departments – namely, Tax and Finance – were already heavily involved in disputes with the federal government. Thus provincial trade officials made a pragmatic decision to avoid confrontation as much as possible. Regardless, in selective cases, Socred governments continued to spare no expense in protecting provincial interests. This was most apparent with softwood lumber, especially regarding the exclusion of log export controls during NAFTA negotiations. Prior to the summer of 2005, responsibility for international trade was located in the Trade Policy Branch of the Ministry of Small Business and Economic Development. Following two reorganizations, the department was renamed the Trade and Competitiveness Branch (TCB) and moved into the new Ministry of Business and Development. Though the department’s mandate now included film industry policy and other general issues related to economic competitiveness, about 50 percent of TCB’s responsibilities remained internal and external trade.9 Despite these new tasks the department continued to struggle with staffing reductions. During the NDP era Trade Policy comprised as many as six people. As of 2003 the department had three officials, a new director, and two other representatives, one each for internal and external trade. A senior provincial bureaucrat suggested that in this new environment, “something was eventually going to fall through the cracks.”10 Other provincial officials, however, were reluctant to look at these developments as setbacks. A different representative noted that BC simply became “more strategic in the issues it pursued.” Now “we only focus on problems that are specific to BC or are being neglected by the federal government.”11 In Alberta, responsibility for international trade is located in the Trade Policy Branch of the Ministry of International and Intergovernmental Relations (MIIR). This department is responsible for negotiating and implementing

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international trade agreements, disputes, services, investment, and the AIT. Responsibilities within Trade Policy are generally divided up on a functional basis. The senior Alberta trade representative, who recently retired, was a long-serving provincial official with extensive experience in this policy area. The department also has a director of internal trade, whose caseload includes the Agreement on Internal Trade (AIT), the Council of the Federation, the Alberta-BC Trade, Investment, and Labour Mobility Agreement (TILMA), and provincial stakeholder negotiations. The associate director of trade and economic analysis coordinates market access issues, statistical research, alcohol, NAFTA, the Asia-Pacific Economic Cooperation (APEC), and the EC. In addition, the department has two international trade counsels. The first provides analysis related to dispute settlement, trade remedies, and technical barriers in a wide range of sectors. The second is responsible for services, investment, the environment, e-commerce, and Canada’s bilateral trade agreements with Chile and Costa Rica. Three to four trade policy officers support these senior bureaucrats, though some of these positions are sporadically vacant or filled by non-permanent staff.12 Given its broad mandate, Trade Policy could benefit from additional bureaucratic resources. According to one trade representative, the department “could easily handle three other research support staff.” To compensate for this, Trade Policy has a relationship with the Western Centre for Economic Research (WCER), located at the University of Alberta. The WCER is used on a contract basis to provide statistical analyses and reports, though these activities are limited by the availability of faculty.13 Despite these problems, Alberta is often considered a leader among the provinces on matters of foreign trade policy, owing to the expertise of its officials, which allows the department to provide services comparable to those of larger provinces such as Ontario and Quebec. Generally, Alberta is regarded as a highly professional if somewhat “intense” participant in domestic policy processes. As one observer suggested, “if you’re prepared and know what you’re talking about Alberta can be an extremely productive province to do business with. It’s only when you come to the table without doing your homework that you ... [can be] dismissed as irrelevant.”14 These characteristics have made Alberta a strong advocate for provincial rights in the formulation of Canadian foreign trade policy. Saskatchewan and Manitoba have less bureaucratic capacity devoted to international trade than Alberta and BC. In Manitoba these issues are mainly the responsibility of one official: the Director of Policy, Planning, and Coordination in the Administration and Finance Division of the Department of Industry, Economic Development, and Mines. Line departments, such as agriculture, also devote significant resources to international trade. Provincial representation on forums such as CTrade, however, remains the responsibility of Industry. Though the director has occasional support from other officials,

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staffing is also a challenge for Manitoba. One senior bureaucrat pointed out that Industry would “love to have six people working on international trade,” but because of limited resources, the department is “forced to pick its spots.” This is not to suggest that Manitoba did not play an important role in negotiations for NAFTA and during the Uruguay Round. In such situations, Industry relies on input from line departments and, in some cases, other provinces. “There were times,” said the same official, “that we’ve relied on the research capacity of Alberta and Quebec.” When the funding is lacking, “we get the information wherever we can.”15 The election of Gary Doer’s NDP government sparked a review of Manitoba’s international trade. Doer had an interest in Canada-US relations and sought to centralize control of this policy area. As a result, a number of traderelated issues were moved into Intergovernmental Affairs, which had its own Canada-US and International Relations department. Initially, the intent was to shift all policy responsibilities out of Industry and into Intergovernmental Affairs; this plan was eventually abandoned because, according to another official, “it became too difficult.”16 The director of policy planning and coordination remained in Industry and a formal written document was drafted outlining specific responsibilities. The director now reports to the ministers of Industry and Intergovernmental Affairs. This may seem confusing, but it has worked in Manitoba because Intergovernmental Affairs focuses mainly on trade development and promotion rather than policy.17 In Saskatchewan, Trade Policy is currently located in the Trade and International Relations Department of the Ministry of Government Relations, which until recently was the Ministry of Government Relations and Aboriginal Affairs. Compared to Manitoba, Saskatchewan has a greater bureaucratic commitment to international trade. Trade Policy has three senior trade analysts and a director. Even though the department has more staff, Saskatchewan, too, focuses on specific policy initiatives. “We typically step back and see what the universe looks like and then pick our spots,” said one high-ranking bureaucrat. The real difficulty, he continued, is “with negotiations and disputes.” Given the province’s “minimal resources, it’s difficult to adopt a strategic policy approach and as a result we tend to suffer at times from a lack of long-term policy development.” The result is a slightly “reactive” approach to foreign trade policy. However, it is important here to differentiate between sectors. Obviously, he noted, “if it’s related to agriculture, it becomes a high priority. Although we would like to target numerous international working groups, it’s just not possible.”18 Atlantic Canada Foreign trade policy became a higher priority in New Brunswick following the election of Bernard Lord’s Conservative government. At that time, Trade Policy was located in Business New Brunswick. Though line departments

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were involved in the policy process, they were limited mainly to technical issues. Their advice was then forwarded to the Director of Trade Policy, who coordinated the information and represented New Brunswick in its dealings with the federal government during the FTA, NAFTA, and Uruguay Round negotiations. Initially, the director was the sole bureaucrat responsible for those negotiations. As the agenda grew more complex, however, the department expanded to include two to three additional policy advisers, though not all of them were permanent and full-time. Today, Trade Policy consists of a senior policy adviser and an additional policy adviser. Also, Trade Policy’s ties with line departments have increased regarding matters related to international and internal trade.19 As noted in the previous chapter, the Conservatives’ emphasis on international relations resulted in a White Paper, Prospering in a Global Economy: New Brunswick’s International Strategy. A second and related change was Bill 55, An Act to Amend the Executive Council Act. This legislation replaced the previous Ministry of Intergovernmental Affairs with the Department of Intergovernmental and International Relations (DIIR).20 The new department was meant to centralize executive control over New Brunswick’s international activities. Though the reorganization was motivated by Lord’s preference for an overarching bureaucratic framework and a more “corporate” approach to policy, it was also linked to budget and efficiency issues. According to a senior member of IGA, a number of departments were taking foreign trips but “nobody had a clear idea of what was being accomplished.”21 Though Trade Policy initially remained in Business New Brunswick, DIIR did begin to develop bureaucratic capacity, creating a US desk to monitor cross-border relations. Then in 2004, Trade Policy was moved out of Business New Brunswick and into DIIR. For the most part this was a collegial process, though it met with resistance from some members of the provincial bureaucracy. Nova Scotia, too, has developed a centralized foreign trade policy. In November 2002, responsibility for international trade was moved out of the Department of Economic Development and into the Ministry of Intergovernmental Affairs. This shift, which was part of a broader bureaucratic reorganization, reflected the expanded mandate of Economic Development, which now focused on technology, investment, and trade promotion rather than on general economic policy. These changes had direct implications for Nova Scotia’s trade representative. That position had been created in the 1980s in the wake of the FTA negotiations. The Uruguay Round, NAFTA, and the AIT added to its responsibilities.22 Before the reorganization, the job description of the provincial trade representative was modified to give it a more defined federal-provincial role, which provided some justification for the move into IGA. This policy area now employs one additional policy adviser, a former contract employee, in addition to the province’s trade representative. Again, as with New Brunswick, the reorganization was for the

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most part collegial. As part of the move into IGA, these officials have at times taken on additional, unexpected responsibilities. One senior bureaucrat suggested that “we don’t want to be writing briefing papers on the trade policy of Belgium. As with any significant change, it’s going to take some time to fully clarify our key functions.”23 In Newfoundland and Labrador, responsibility for international trade is in the Trade and Investment Division of the Department of Innovation, Trade, and Rural Development, which was formerly the Trade Policy Branch of the Department of Industry, Trade, and Rural Development. The recent reorganization under the Conservative government of Danny Williams has added a Strategic Industries Division and a Rural Secretariat to the department; however, despite a new focus on technology, its responsibilities for foreign trade have not been significantly altered. Newfoundland, much like Nova Scotia, traditionally had one official responsible for international trade. In 2004, however, a second policy analyst was added. As in other provinces, the department would benefit from additional resources. It receives a number of ad hoc requests from other line departments seeking briefing notes on existing trade commitments or ongoing negotiations.24 In comparison to other provinces in Atlantic Canada, Prince Edward Island has the least developed bureaucratic capacity. Historically, PEI had minimal expertise within its bureaucracy on matters of international trade. During the FTA and NAFTA negotiations, Intergovernmental Affairs, line departments, or specialists, often working on a contract basis, handled provincial interests in an ad hoc manner. Between 1999 and 2002 the government had no employees focusing on international trade. Recently, however, the Department of Development and Technology hired a part-time trade adviser. This official is a former Saskatchewan trade representative who retired to PEI and whom the government recruited for their expertise. Obviously, given PEI’s size and location, its institutional bureaucratic structure is not as specialized as that of other provinces. Development and Technology, for example, has a very broad mandate and is responsible for economic policy in a number of sectors (which, however, do not include agriculture, fisheries, and to some degree forestry).25 Bureaucratic Coordination and Cooperation It is clear from the above discussion that every province has more than one department working on foreign trade policy. Typically, several ministries (often including finance, agriculture, forestry, justice, and the environment) have officials working on some aspect of international trade. Not surprisingly, three provinces have established standing committees to oversee these bureaucratic interests. In Alberta there are two structures that coordinate foreign policy. The first is the Trade Policy Committee, which is a forum for communication and

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information sharing and which distributes relevant documentation. Also, several Alberta departments besides MIIR have international policy capacity. Forestry, for example, has six officials dedicated to the softwood lumber dispute. Energy has its own department responsible for external relations, though it works mainly on market access and advocacy in the United States. It is MIIR, however, that is responsible for coordinating trade policy within the Alberta government. The Trade Policy Committee, then, serves as a formal source of expertise for MIIR on specific policy issues. Alberta also has a committee of assistant deputy ministers on international issues; however, it is not driven by trade policy. This committee provides the premier with information related to a diverse range of international initiatives such as those involving culture, education, science, and research.26 Quebec, too, has taken steps to coordinate its trade policy. Beyond MIR, numerous line departments – such as Agriculture and Natural Resources – have developed the expertise to negotiate and implement international trade agreements. Also, an interdepartmental committee has been created involving eighteen separate departments and agencies; it meets every two to three months. To ensure more frequent dialogue, a number of subcommittees have also been established. As in every province, ad hoc daily meetings and regular phone conversations are common during trade disputes and the crucial phases of negotiations. Quebec also has a Secretariat for Interprovincial Relations, which is responsible for both political and economic issues. This body focuses solely on internal trade, though there is inevitable overlap with Quebec’s foreign trade relations.27 New Brunswick also has institutional mechanisms to coordinate provincial international activities. In terms of general consultation, an interdepartmental International Strategy Working Group (ISWG) has been created to facilitate communication and information sharing. This forum, coordinated by DIIR, is designed to promote cooperation in the early phases of policy making. As noted earlier, this activity was historically ad hoc. Usually, technical positions were developed in line departments; this information was then forwarded to the Director of Trade Policy.28 According to Raj Venugopal, the recent reforms were not designed to give DIIR oversight and control over the activities of line departments. Rather, this “pooling and sharing of information was designed with two objectives in mind: to provide corporate memory of all government-related international activities; and to communicate government officials’ international work plan itineraries to senior managers prior to date of travel.”29 The other provinces do not have formalized committee systems. Instead, policy positions are established through ad hoc information sharing among the relevant ministries. Ontario lacks an overarching framework, though attempts to institutionalize coordination in specific sectors have been made in the past. One example is softwood lumber, where MEDT and Natural

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Resources attempted to formalize their communication and coordination processes. Before long, however, it was clear that the two departments differed on how to end the dispute. According to one senior official, “MEDT decided to terminate the arrangement and Natural Resources gained control of the file.”30 It is hard to say whether formal coordination might have prevented this tension; it is also important to point out that MEDT has a collegial working relationship with most departments in the Ontario government. Generally speaking, duplication is not inevitable. Another bureaucrat pointed out that “most of these policy areas are so broad and complex that there is rarely an overlap of interests.”31 In BC, Trade Policy is not the only department responsible for the province’s global trade. Indeed, Trade Policy relies on information from several other bureaucratic divisions. Not surprisingly, these departments are tied to the more prominent sectors of the provincial economy, which also tend to be the most contentious. For example, Trade Policy relies on information from the Ministry of Forests and the Ministry of Agriculture, Food, and Fisheries. Most interactions within the provincial bureaucracy involve trade disputes or briefings related to ongoing international negotiations. For the most part this is an extremely cooperative arrangement, and members from all three departments have praised the working relationship that they have developed.32 Unlike other provinces, such as Alberta, there is no formal mechanism or committee that oversees all aspects of BC’s international trade. To this point, however, this has not impeded policy making. One official suggested that the process “might not look coordinated, but it works.”33 Expertise and Influence In recent years, DFAIT has reorganized its bureaucracy to better accommodate the provinces’ demands in this policy area. Previously, it had a small department responsible for coordinating the provinces’ international interests, be they trade promotion, negotiations, or dispute settlement. As the issues grew more complex, however, the Department of Foreign Affairs and International Trade (DFAIT) established the Trade Policy Consultations and Liaison Division (TPCLD), responsible for coordinating CTrade and other provincial trade interests. When the TPCLD was formed in 1999, it consisted of a director, a deputy director, and around ten other officials. The office was not high in the DFAIT hierarchy, however. Rather, it was a division within the Trade Policy II Branch (the Services, Investment, and Intellectual Property Bureau), which reported to the Assistant Deputy Minister of Trade, Economic, and Environmental Policy. During the Paul Martin era, after DFAIT was divided into Foreign Affairs Canada (FAC) and International Trade Canada (ITCan), the same organizational hierarchy existed for TPCLD. The new title for the assistant deputy minister, however, was the ADM for Trade, Economic, and

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Environmental Policy and Chief Trade Negotiator for the WTO. This person reported to the Deputy Minister of International Trade. Stephen Harper’s Conservative government slightly altered responsibility for CTrade and provincial coordination. In 2006 TPCLD was eliminated and replaced with the Consultations and Liaison Division (CSL). This new division, which was part of Harper’s reintegration of ITCan and FAC, employs about ten officials, which at one point included a federal-provincial territorial liaison officer. The responsibilities of TPCLD and CSL are quite similar. Like the TPCLD, the CSL is relatively low in the government’s hierarchy. It is part of the Strategic Policy Division, which is located in the Investment, Innovation, and Sectors Branch of the Ministry of International Trade. That branch, which reports directly to the deputy trade minister, has a broad mandate. Also, the Strategic Policy Division shares bureaucratic resources with the Asia-Pacific Gateway Initiative, Olympic Games 2010, Innovation and Partnership, Invest in Canada, Investment Marketing, Science and Technology, and the Strategic Trade Planning and Performance Management Division. Trade Policy and Negotiations and the Trade Law Bureau are also the responsibility of the deputy minister. The bureau, not surprisingly, is the federal government’s source of legal advice on trade matters. For its part, Trade Policy and Negotiations focuses on multilateral, regional, and North American trade. The various divisions of Trade Policy and Negotiations are responsible for trade issues such as technical barriers, services, intellectual property, and softwood lumber.34 Most officials in TPCLD (now CSL) have less experience than provincial representatives. As one bureaucrat pointed out, the provinces’ trade policy departments tend to be “staffed with knowledgeable members who have held these positions for very long periods of time.” At the federal level there is less continuity, given the “junior” status of TPCLD and CSL. These departments are “usually viewed as a career step for federal officials”; thus there “tend to be regular changes from year to year.”35 Again, though, it is important to emphasize that provincial consultation on trade issues is not limited to CSL: provincial officials are in regular direct contact with officials in specific ministries, such as DFAIT’s former Trade Policy I and II Branches. According to several provincial bureaucrats, these are often very senior members who are well versed on the intricacies of foreign trade. In cases such as these there is not a similar advantage for the provinces. Recent and pending retirements at the provincial level have the potential to alter this area of federalprovincial relations. Provincial representatives’ continuity allows them to build ongoing relationships with their counterparts in other provinces. Though it would be a mistake to suggest that the provinces often form alliances, data and workloads are quite often shared. In Ontario, for example, MEDT makes a point of copying most departmental memos to other provinces and the federal

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government in order to avoid duplication. Ontario went so far as to draft an internal Guide for Trade Agreements, outlining obligations for provincial departments, and distributed this manual to other provinces.36 At times, provincial cooperation is based more on sectoral considerations and mutual interests. For example, Alberta works closely with BC and Saskatchewan on softwood lumber. It also shares a working relationship with Saskatchewan on wheat and with Quebec on more general questions of jurisdiction.37 Quebec and Alberta also worked together during the final stages of the Uruguay Round in Geneva.38 Trade officials in Atlantic Canada have forged ties as well. New Brunswick and Nova Scotia, for example, have long been in almost daily contact, especially on more contentious files such as softwood lumber and shipbuilding.39 One senior official in the region described this working relationship as a “job share” – that is, as a response to the lack of available resources and to complimentary strengths and weaknesses.40 In addition, “virtual committees” have been established in Atlantic Canada for information sharing on issues such as softwood lumber, services, and the AIT. Yet at the same time, it is important not to overemphasize this cooperation. In the words of one provincial bureaucrat, “provinces have competing interests, and it does not always make sense to share information.” “What people forget,” he continued, “is that in some cases we’re actually directly competing with other provinces and trying to anticipate their positions so we can have a better argument.”41 Several officials in Ontario complained that not all provinces were willing to share information and resources. One representative suggested that Ontario was a “bit of a boy scout and brownnoser when it comes to this stuff. Ultimately, we need to stop doing all the heavy lifting for other provinces.”42 Larger provinces have been known to depend on the bureaucracies of smaller provinces to protect specific interests. In the case of shipbuilding disputes with Europe, the Central Canadian provinces relied on representatives from Atlantic Canada “because we knew it was important to them and they would do the work.”43 Generally, then, cooperation among provinces is sporadic and depends heavily on the personalities involved. In the words of one official, “cooperation between provinces will only occur if it does not create a great deal of work for those involved. If it doesn’t come easily, it’s not likely to happen.”44 The Legalization of Trade Policy? The increasing complexities of international trade have contributed to a growing reliance on legal representation for both Ottawa and the provinces. Lawyers generally provide three specific services. First, they offer advice when international trade agreements are being negotiated. Second, they provide crucial legal representation when NAFTA and WTO tribunals hear

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trade disputes. Third and more recently, federal and provincial governments have been hiring Washington law firms to lobby Congress on specific sectoral concerns. Provincial trade representatives can no longer ignore the “legalization” of trade policy. “If I was putting together a trade shop ten years ago I would have hired a bunch of economists,” noted a senior bureaucrat from BC. “Now I need a roomful of lawyers.”45 Another representative, from Manitoba, suggested that historically “the role of provincial trade officials was similar to an editorial writer. We were asked to monitor developments and comment on possible implications for the province.” As negotiations began to include issues such as government procurement, services, and other intrusive areas of policy, “our job began to change.” Suddenly the province needed to focus on the implementation of these agreements. “I’m not a lawyer, but I need one, so this expertise has to come from outside of government.”46 An Ontario official was more blunt: “We now have to send everything to lawyers to review in order to ensure we have an informed legal opinion.” The difficulty, however, “is that once it leaves our hands it becomes less of a policy issue and more of legal matter, which prevents us from fully monitoring the process.”47 Not surprisingly, sectors involved in international trade disputes are also the ones most dependent on legal representation. An obvious example is softwood lumber. In the words of one former bureaucrat, “it was always the ‘A’ team of provincial and federal officials and Washington lawyers when it came to softwood lumber.” The “stakes were simply too high to have it any other way.”48 The costs for this representation are significant. In some provinces, decisions to hire specific firms for these lucrative contracts are based at least in part on political factors. For example, during Lumber II, which ended in 1991 with the termination of the Canada-US Memorandum of Understanding (MOU) on softwood lumber, most legal contracts in BC were with firms that had ties to the Mulroney government. Then after the 1993 election, the BC Council of Forest Industries (COFI) – at that time the main industry association in the sector – hired a prominent Vancouver law firm with close ties to Jean Chrétien and Eddie Goldenberg, his long-time adviser. At first this relationship was mainly political, and there were indications that it was succeeding as Chrétien began making softwood lumber the focus of several BC speeches. Over time, however, the firm also began providing extensive legal advice to COFI on the lumber file.49 Despite the growing influence of lawyers and the apparent practice of hiring firms with ties to the federal government, some observers have their doubts that foreign trade policy is becoming more “legalized.” According to one legal representative, the process remains highly “politicized” in that most legal firms – especially American firms – are hired on the basis of their access to Congress. Dewey-Ballantine, for example, is an American firm that

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represents US industry not just in lumber but in a wide range of other sectors, including steel.50 Regardless, these developments raise questions related to provincial budget considerations, as well as relevant issues of transparency and accountability. Put simply, trade policy is already a Byzantine process that draws extensive criticism related to access and legitimacy. These problems have the potential to become more serious when governments turn even more responsibility over to non-accountable lawyers, some of them with political ties to parties in both Ottawa and Washington. The Legislature There are two general opinions regarding the role of Parliament in formulating foreign policy. David Leyton-Brown and R.B. Byers have concluded that Parliament has historically lacked involvement on this issue.51 In addition, Nossal has argued that elected members rarely gain the support of local constituents on the basis of foreign policy, especially international trade.52 Activity is also limited by strict party discipline and by the legislature’s responsibility for a diverse range of issues. On the other hand, John English has suggested that the role of parliamentarians has increased over the past two decades. Specifically, he argues that especially in ethnic communities, voter support is being linked more and more to foreign policy. English also points out that elected members today enjoy expanded opportunities to serve on parliamentary committees and cross-border legislative associations.53 The key, then, is to evaluate these arguments in the context of provincial legislatures. To do so, it is necessary to examine the ratification and implementation of international treaties, the role of legislative committees focusing on foreign affairs, and the external legislative linkages of Quebec. In Canada, by tradition, the legislative branch of government is not involved in the ratification of foreign trade agreements. As Peter Hogg points out, the signing and ratification of treaties is the prerogative of the Crown and/or the executive. In other words, Canada’s Westminster model does not extend formal jurisdiction over foreign relations to elected legislatures (the US Congress, by contrast, does have this jurisdiction). Hogg does note, however, that the federal government has always sought parliamentary approval for significant agreements before official ratification. This legislative review is not statutory and is not granted royal assent. Between 1946 and 1966 roughly one-quarter of Canada’s treaties were submitted to Parliament. More recently it has become less common to require formal ratification for international commitments.54 Despite these limitations, in 2002 Quebec passed the Act to Amend the Act Respecting the Ministère des Relations Internationales. According to Stéphane Paquin, this “forces ratification by Quebec’s National Assembly of any federal treaty that concerns Quebec’s areas of jurisdiction.”55 In his opinion, this has created a potential problem within Canadian federalism that could prevent the ratification of future

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international agreements. Based on Hogg’s analysis, however, it is clear that the Quebec legislature will be limited to passing legislation based on the right to “review” international treaties in areas of provincial jurisdiction. This is not an insignificant development, but it falls short of creating a constitutional crisis over the issue of ratification. On the other hand, treaty implementation does often require legislative change to ensure that domestic law is consistent with international obligations. In terms of the provinces, this was the case with both the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labour Cooperation (NAALC).56 Provincial legislatures have also initiated bureaucratic reorganizations and legitimized other institutional reforms. In 2002, for example, Quebec voted to establish the Observatoire Québécois sur la Mondialisation, a mechanism designed to advise the province on matters of “globalization.”57 Following NAFTA, Alberta also adopted a formal implementation process for trade policy. Most of these activities are carried out through executive orders-in-council, but some technical changes to areas of provincial legislation still require legislative authorization. Another area of potential involvement is legislative review. At the federal level over the past two decades there has been evidence of an enhanced role for Parliament in this capacity. Starting with the Mulroney government, a number of parliamentary committees and reports have examined Canadian multilateral and regional trade relations. Generally, the House of Commons Standing Committee on Foreign Affairs and International Trade and its Subcommittee on International Trade, Trade Disputes, and Investment have coordinated public hearings on these issues. Since 2001 the federal government has published several studies linked to these efforts.58 All of this is in addition to parliamentary committees studying non-trade–related aspects of Canada’s external relations. Finally, parliamentarians engage industry and societal interests in multistakeholder negotiations and serve as panellists and speakers at a wide range of public forums. Finally, reports outlining Canadian economic priorities, Canada’s State of Trade and Canada’s International Market Access Priorities are tabled annually in Parliament. Conversely, provincial legislative committees on international trade are rare. Recently some provinces have attempted to formalize involvement on this issue for elected representatives. Saskatchewan, for example, has proposed a legislative review process.59 Alberta has a Standing Policy Committee to evaluate the work of various departments, but that committee does not usually focus on international trade, except at times in relation to softwood lumber and energy.60 However, Alberta’s MIIR is accountable to the legislature’s Business Plan (Budget) Annual Review. Most provincial committees on international trade are ad hoc. Where they exist, as in Ontario during NAFTA, they have the potential to be politically motivated.

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In BC during the 1990s, for example, NDP governments established legislative committees to study both NAFTA and the Multilateral Agreement on Investment (MAI). The first of these committees, the Select Standing Committee on Economic Development, Science, Labour, Training, and Technology, was created in January 1993 to discuss NAFTA with business, labour, NGOs, civil society, and academia. In its interim report, which was tabled in the provincial legislature in May 1993, the committee addressed NAFTA’s impact on environmental controls, agricultural support mechanisms, and water. However, the NDP chair of the committee, Mike Farnworth, emphasized the risk that NAFTA presented to provincial trade with Asia. In his opinion, BC “was unique among provinces in that we have convinced ourselves that our future lies in Pacific trade.”61 The BC legislature’s MAI committee, on the other hand, began its deliberations in the summer of 1998. The MAI was not explicitly linked to trade; even so, the committee, chaired by the NDP’s Joan Smallwood, expressed concerns regarding its impact on the province’s freedom to regulate economic and social development. From the outset, the NDP faced questions about the committee’s purpose. For one thing, it was formed during a six-month suspension of negotiations for the MAI following the expiry of an April 1998 deadline. For another, the committee faced a crisis when its Liberal opposition members walked out in October 1998.62 Despite these developments, in January 1999 the legislative committee tabled an initial report condemning the MAI; thereafter it continued to hold public meetings throughout the province.63 Though the committee lacked Liberal representation, and though the deadline for the MAI had passed, the NDP contended that the process was still necessary in case these issues arose during WTO negotiations scheduled for Seattle later that year.64 Ultimately, the committee ended without a consensus on the MAI; the process did, however, influence BC’s eventual decision to oppose investment provisions being considered for both the WTO and the FTAA. A final legislative issue to consider is the foreign relations of provincial legislatures. According to Louise Harel, Quebec has been the most active provincial government in establishing these linkages, in both bilateral and multilateral contexts. Specifically, Quebec has working relationships with the “Assemblée Parlementaire de la Francophonie, [l’] Association Parlementaire du Commonwealth, [la] Confédération Parlementaire des Amériques, [le] Council of State Governments, [et le] National Conference of State Legislatures.” On a bilateral basis, Quebec has ties with “France (Assemblée Nationale et Sénat), la Bavière, le Parlement Centraméricain, la Communauté Française de Belgique, le Brésil, la Catalogne, la Californie, le Niger, l’Ontario, [et] la Région Wallonne.” In 1997 the province hosted the first Parliamentary Conference of the Americas, which subsequently became the Confédération

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Parlementaire des Amériques. Harel suggests that as a result of this experience, Quebec can serve as an example for other provinces considering an expanded presence in the international arena.65 Conclusion To understand the role of provincial bureaucracies in foreign trade policy, it is necessary to examine issues of capacity, influence, and cooperation. Provincial officials have considerable autonomy in this policy area; at the same time, they face budget and staffing challenges. Also, recent efforts to centralize policy within ministries of intergovernmental affairs and the ongoing development of line department capacity have generated tensions within some provinces. Regardless, subfederal bureaucratic coordination is effective, with Alberta, Quebec, and New Brunswick creating specific institutional mechanisms for this purpose. The strong influence of provincial bureaucrats, especially compared to their federal counterparts, is a result of the long tenures of these officials and the relationships they have developed with other provincial trade representatives. The expanding influence of legal experts, however, has added to provincial budget pressures and raised questions of accountability and transparency. It is clear that provincial legislatures play a less significant role in trade policy. Legislatures are sometimes asked to pass legislation related to international agreements, and to legitimize bureaucratic reorganizations and other institutional reforms, but generally their impact is limited. The only exception to this is arguably Quebec, which now has provisions for elected officials to review and debate all international agreements that have relevance to provincial jurisdiction.

6 Issues of Implementation, Negotiation, and Consultation

Besides institutional pressures, provinces must also balance sectoral factors when implementing and negotiating international trade commitments. Provincial business interests have influenced not only Canadian foreign trade policy but also the development of international norms and standards. Specific examples include the WTO Agreement on Subsidies and Countervailing Measures (SCM), the General Agreement on Trade in Services (GATS), the North American Free Trade Agreement’s (NAFTA’s) service provisions, and recent agreements on wine and labelling. Note, however, that the impact of these actors varies among and often within specific sectors. Also, provincial industries are vulnerable to market forces and decisions by international dispute settlement panels. This is demonstrated by the emergence of “preventative” regulatory regimes related to NAFTA’s Chapter 11. As well, an examination of consultative linkages makes it clear that ties between provincial governments and the business community are informal and are limited to sectoral disputes or international negotiations. And within provinces, the development and maintenance of these links shifts from sector to sector and in some cases even within industries. Finally, there is evidence that dominant ideas related to the liberalization or protectionism of specific sectors influence government-industry relations in Canadian provinces. Furthermore, these attitudes are fragmenting and often contradictory, which contributes to an increasingly complex policy process that places restrictions on Canadian negotiators as they seek specific outcomes at the international level. Compliance and Implementation: Wine, Insurance, and Preventative Regulatory Regimes Before evaluating the provinces’ influence in specific sectors it is necessary to define implementation, negotiation, and consultation. For this discussion, “implementation” refers to putting into practice specific international trade obligations. Here, province-industry linkages are tied to Canada’s formal

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obligations outlined in NAFTA and the WTO, obligations that often require adjustments to domestic laws, policies, and regulations. “Negotiation” is a much broader and more inclusive term, one that touches on relationships among government officials as they represent Canada’s global, regional, or sector-specific interests. Finally, “consultation” refers to more general sectoral ties as provinces pursue formal and informal relationships with business and societal interests in order to gain information related to policy change. Clearly, these definitions are not mutually exclusive; there is some overlap. As noted in Chapter 3, alcohol was the first sector to highlight problems related to the provinces’ implementation of international trade agreements. Historically, Canadian provinces have maintained monopolies or near monopolies on the sale of alcoholic beverages, similar to restrictions in other sectors such as agriculture and government procurement. In an effort to raise revenues, provincial liquor control boards have carefully regulated the sale and importation of all alcohol – wine and beer in particular. Specifically, beer imports from other countries have been subject to high tariffs; similar restrictions were previously extended to domestic producers, requiring them to operate breweries in individual provinces. Several provincial governments have discriminated in favour of local wine makers by imposing extremely high prices on other Canadian products. Some liquor control boards have gone as far as to forbid the sale of wines made in other countries and provinces. According to Douglas Brown, the dispute between Canada and the EC centred on a 1979 Statement of Intent signed by Canadian provinces that explicitly limited the capacity of provincial liquour boards to regulate sales of alcohol. In the years following the agreement a number of European countries began to question the willingness of provincial governments to follow these guidelines. Specifically, Ontario’s marketing and distribution practices, and its policy of protecting local wineries through differential markups, were viewed as violations of the Statement of Intent. The matter was submitted to a General Agreement on Tariffs and Trade (GATT) dispute panel, which reported its findings in October 1987. The key here was GATT’s “federal state clause.” After hearing the case, the panel ruled in favour of the EC. Canada and Europe reached an agreement on 20 December 1988 that focused mainly on wine. Existing price differences for beer were frozen, and the principle of national treatment was extended to listing practices. Provincial beer distribution was not addressed.1 The EC/GATT dispute revealed significant differences among the provinces on the issue of alcohol. Grape growers and wineries in Ontario and BC defended provincial practices by citing European agricultural subsidies. Several other provinces, however, especially those with limited wine production and exports, wanted to settle the GATT challenge because it threatened to

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disrupt beer sales. In an effort to represent these conflicting interests, Ottawa invited the provinces to three separate EC negotiating sessions following the 1987 GATT ruling. Though the provinces did not attend as full participants, Brown believes that the final 1988 agreement “was made with the knowledge and tacit consent of the majority of the provinces, although Ontario apparently reserved its support until a final settlement was reached on wine adjustment measures in March 1989.”2 Following the 1988 agreement there were few official complaints from Europe related to wine and Canadian provinces. In the late 1990s, however, the EC called for a further review of provincial liquor distribution practices. In December 2000 it initiated a dialogue with Ottawa; several months later the federal government contacted the main wine-producing provinces – Ontario, Quebec, and BC – regarding participation in these discussions. As one official pointed out, “this was the first time in over a decade the provinces were directly involved in the EC wine dispute.”3 Federal officials attended these meetings, but only as observers. This model was based on earlier provincial involvement in 1990s discussions with the United States regarding market access. Those meetings, however, had been with American commercial groups rather than US government representatives.4 Another example of provincial engagement was Canada’s successful participation in the negotiation of the New World Wine Accord, signed by the United States, Australia, Chile, and New Zealand in December 2001.5 This pact was a mutual recognition agreement dealing with technical oenological (winemaking) practices that built on earlier multilateral discussions in the World Wine Trade Group, which was established in 1998. The mutual recognition agreement (MRA) was meant to allow greater access for wine exports with consistent production practices. In the past, production methods had been used to justify trade barriers in the defence of health and safety standards. The agreement also called for ongoing consultations and the creation of a sectoral dispute settlement mechanism (which would not supersede the WTO). The MRA demonstrated the federal government’s willingness to cooperate with the provinces in this sector. Over a three-year period, Ottawa circulated draft copies of the proposed agreement and made certain that any new international norms and standards would reflect provincial interests. Yet it is important to distinguish MRAs from more comprehensive trade agreements. As one bureaucrat noted, “MRAs are not nearly as contentious and the wine accord was a surprisingly easy deal to negotiate.”6 A subsequent wine-related development was the 2003 agreement between Canada and the EU regarding labelling and market access. Under this deal, to be phased in over ten years, Canadian producers were no longer allowed to label products using the terms sherry, champagne, port, or chianti, which the EU argued were exclusive geographic regions in Europe. Overall, this agreement had a negligible impact on Canadian provinces. Indeed, the

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Vintners Quality Alliance (VQA), which establishes standards in Ontario that are also voluntarily followed in BC, had already prohibited the use of these terms. The accord also allowed domestic wineries in BC and Ontario to exclusively sell Canadian wines in private retail outlets. Finally, label protection was extended to Canadian products such as ice wine and whisky. Once again, the 2003 agreement represents an example of provincial interests shaping foreign trade negotiations.7 Alcoholic beverages are not the only compliance issue affecting Canadian provinces. A somewhat unexpected outcome of NAFTA’s Chapter 11 has been the emergence of “preventative” regulatory regimes. Under Chapter 11, private corporate interests are permitted to pursue claims against governments for lost investment opportunities. Though the number of Chapter 11 challenges has dropped significantly in recent years, Canada did lose earlier cases. For example, a loss to Ethyl Corporation resulted in a payment of $19 million to that US-based company. These cases have raised awareness at both levels of government regarding the relevance of Chapter 11 in various sectors. During the 2003 provincial election in New Brunswick, for example, the high cost of automobile insurance was a prominent campaign issue and there was pressure on all parties to endorse a “public” government insurance program similar to those in Manitoba and BC. The Conservative government of Bernard Lord seriously considered the idea but abandoned it because it might expose the province to a Chapter 11 suit.8 Automobile insurance was also an issue in Ontario, but again, the government decided not to pursue a public insurance program, in part because of Chapter 11. For similar reasons, Ontario also backed away from legislation calling for blank cigarette packaging.9 If a preventative regulatory regime has in fact emerged, it is another example of the intrusiveness of international trade commitments. Yet not all observers are convinced that Chapter 11 has had a significant impact. A senior federal official, for example, contends that Canada faces only a minimal long-term threat from Chapter 11. “I deal with these files every day,” he noted, “and the temperature has really gone down on this issue in both Ottawa and the provinces.” The number of Canadian cases has not increased significantly, and “both levels [of] government continue to pass legislation in potentially sensitive areas.” According to this representative, the best test case was the Kyoto Protocol. Given initial concerns, any Canadian “environmental legislation potentially limiting investment opportunities in Canada should have been targeted,” but this did not happen.10 Julie Soloway has also argued that Chapter 11 does not limit the government’s ability to regulate environmental issues.11 Negotiations: Provincial Interests and Market Pressures – Agriculture Provincial protectionism remains a reality in Canadian agriculture, especially in the dairy supply management system. Dairy production in Canada is de-

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termined by a combination of import tariffs, pricing programs, and production quotas. This system has benefited producers; even so, farmers must still pay provincial marketing boards a levy based on production levels. These fees are then used to maintain supply management systems and to lobby government. As Kathy Baylis and Hartley Furtan have pointed out, provincial legislation may require mandatory membership in marketing boards, but it is Ottawa that determines the actual quantity of national milk production. This has opened the door for tensions among provinces with different interests in relation to these quotas.12 A distinction must be made here between “fluid” milk, the quota for which is determined strictly on the basis of provincial population, and quotas for “industrial” milk, which are based on provincial production levels at the time of the 1973 Milk Supply Management Agreement. As things now stand, “industrial” quotas heavily favour Ontario and Quebec. In addition to production restrictions, pricing adjustments are made to ensure that fluid milk prices are higher than those for industrial milk, even though dairy prices for processing remain higher than international averages.13 In addition, the United States has challenged the Canadian Wheat Board as an unfair trading mechanism. The Wheat Board is a Crown corporation that sets prices for Western producers’ wheat exports; however, these prices are dependent on successfully acquiring foreign markets. Generally, this system provides price benefits for Canadian producers owing to Canada’s comparative advantage in this sector, which reinforces Canada’s argument that the Wheat Board is not a market-distorting mechanism. The Americans, however, point out that once costs are set and the Wheat Board purchases the grain, payments are guaranteed to Canadian farmers even if markets are not ultimately secured. Ted Cohn argues that these realities help explain the “consistent support [of the prairie provinces] for an effective agricultural trade regime” that includes the Canadian Wheat Board.14 Yet not all Canadian producers support the Wheat Board. In fact, many of them have argued that prices would rise for Canadian exports if wheat were sold directly to American consumers. Alberta is now strongly advocating market-based reforms. In support of its position, it released four separate reports on the Canadian Wheat Board in June 2006. Two of those studies recommended changing the board’s business model to make it better represent “goals of marketing choice.” The third report focused specifically on Australia and its single-desk marketing system. The final study discussed the elimination of federal supports and the future of the Wheat Board. According to Doug Horner, Alberta’s former Minister of Agriculture, Food, and Rural Development, the Canadian Wheat Board must be transformed owing to inevitable reductions in global agricultural trade barriers. As he noted at the time, Alberta has the capacity “to build ... [its] grain marketing system under ... [its] own terms.”15

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Though agriculture was a contentious issue during the NAFTA and Uruguay Round negotiations, both agreements had only a modest impact on Canadian trade policy. According to Grace Skogstad, the WTO’s Agreement on Agriculture was notable for its lack of intrusiveness. The earlier quota system for dairy, poultry, and eggs was replaced with tariffs, but these were set at higher average rates than previous import quotas. In addition, Canada had already reduced domestic aggregate supports by the amounts stipulated in the agreement and was already reforming the grains sector in relation to income safety nets. As part of its deficit reduction strategy, Ottawa had also eliminated export grain subsidies in its 1995 federal budget, in this way exceeding the 36 percent target set by the WTO. Even in the sensitive supply-managed sectors, the Canadian government met and in some cases surpassed WTO targets. Finally, compared to Europe and the United States, Canada now had one of the lowest transfers as a percentage of total value of production, especially in terms of wheat.16 As Éric Montpetit has argued, agricultural protection remains but is not going to return to previous levels, despite pressure from lobby groups such as the Canadian Federation of Agriculture. Canada can simply not afford US and European levels of subsidization and is now focusing its international efforts on “price-depressing and trade-distorting agricultural aids.”17 Agriculture remains a key sector in the ongoing Doha Round of negotiations. Not surprisingly, there are regional differences within Canada between export-oriented sectors and import-sensitive sectors. According to Skogstad, organizations such as the Canadian Alliance of Agri-Food Exporters, the Saskatchewan Wheat Pool, and Manitoba’s Agricore are encouraging Ottawa to reduce tariffs and eliminate in-quota duties.18 The supply-managed sectors, by contrast, argue that past reforms have already gone well beyond those of other states and that attention should now focus on issues such as food safety. Skogstad notes here that American protectionist pressures related to sugar, peanuts, citrus, and cotton make it difficult to challenge Canadian supply management programs. The WTO Subsidies and Countervailing Measures (SCM) Agreement also has implications for agriculture. The final text of that agreement serves as another example of the provinces’ impact on the Uruguay Round talks. There was considerable American pressure to alter Article 2.2 of the SCM, which states that “the setting or change of generally applicable tax rates by all levels of government entitled to do so shall not be deemed to be a specific subsidy for the purposes of this Agreement.”19 During the negotiations, Washington made it clear that it wanted to remove or dilute this clause in order to end state subsidies, a practice that generates considerable competition among subfederal governments in the American market. Canada rejected this because it posed a threat to regional subsidy programs. As one official pointed out, “the US proposal would have made provincial programs countervailable

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and all provinces, not simply Ontario and Quebec, opposed it.” The other important factor, he suggested, was that “regional subsidies in the US are primarily state-driven programs, whereas in Canada the provinces rely almost exclusively on funding from the federal government.”20 Regional subsidy programs, however, were not the only SCM issue related to Canadian provinces. During the Uruguay Round some provinces lobbied for a stronger process for launching and investigating subsidy complaints, as outlined in Article 11 of the SCM. Alberta, for example, proposed a “net subsidy” approach wherein “countervailing duties could only be imposed on imported products to the extent that they received subsidies greater than the subsidies received by the industry that started the case.”21 This idea was ultimately dropped from the Uruguay Round’s agenda; even so, Alberta continues to support it. Another provincial concern during the Doha Round is potential changes to SCM Article 8.2, dealing with “green light” subsidies. This “traffic light” system, which was supported by provincial governments during the Uruguay Round, provides a means to identify various forms of subsidies.22 “Red light” subsidies include those for which government action is not allowed. “Green light” subsidies are the opposite. In the current negotiations, the Canadian provinces want to protect the regional development exemption outlined in Article 8.2(b). Finally, Article 1.1’s definition of “financial contributions” as subsidies is problematic, especially in relation to specific WTO panel decisions on softwood lumber, which have suggested that provincial programs could meet these criteria.23 Services Another specific interest for Canadian provinces is services. During the NAFTA and Uruguay Round negotiations, several provinces did not have well-developed positions for this policy area. In fact, both levels of government were uncertain about the extent to which services would be included in any final agreement. Also, limited bureaucratic resources made it difficult for some provinces to develop negotiating positions, especially when other issues had higher economic priority. In other cases there was open disagreement among provincial governments. In terms of health and education services, some provinces supported the idea of further liberalization, due to a perceived comparative advantage, while others advocated greater protectionism. The movement of service-based professionals added another dynamic to these discussions. In terms of NAFTA, provincial interests were directly reflected in Annex I and Annex II of the agreement. Annex I excluded all provincial health measures in existence prior to 1 January 1994 as they related to national treatment, most-favoured-nation (MFN) status, and local presence requirements. As Mark Crawford has noted, this reservation seems to exclude most health services, given that basic provincial schemes have not been dramatically

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altered since 1994. The difficulty arises when provinces (such as Alberta) threaten to pursue a system that would provide greater access to privately funded services. The Supreme Court of Canada’s decision to strike down Quebec’s prohibition of private health insurance, Chaoulli v. Quebec (Attorney General), has the potential to further legitimize the increased privatization of provincial health care programs. Based on the language of Annex I, this could open health services to the NAFTA dispute process.24 However, NAFTA’s Social Service Reservation, outlined in Annex II, could allow for ongoing protection of provincial practices. Specifically, Annex II excludes social services provided for public purposes. Canadian officials have argued that this provision includes “private delivery” of “publicly funded” services. Ultimately, it was BC that became the leading advocate for a clear definition of social services in NAFTA. As noted in Chapter 4, the BC government was critical of Ottawa’s approach to the Annex II negotiations. It argued for public education, public training, health, and child care to be specifically noted in the final agreement.25 BC also argued for changes to Article I.3 of the WTO’s GATS, which at the time excluded services provided by regional and local governments.26 As Crawford notes, BC was the only province to dispute what it believed was the narrow definition of the exemption. To bolster this argument, provincial officials pointed to successful challenges of Article 55 of the EC Treaty, which was designed to allow similar service exclusions in Europe. Other federal and provincial officials, however, believed that the existing language of Article I.3 could be “interpreted broadly” and argued that the recognition of the “right to regulate” and “due respect for national policy objectives” in the GATS preamble protected provincial interests.27 So in this particular case a province did not alter Canadian trade policy or international norms and standards. To date, no state has launched a WTO challenge applicable to this section of GATS. According to Anthony J. VanDuzer, however, Canada’s vulnerability is potentially exposed in Article I.3(c), which states that competition must be “economically rational as well as legally and practically possible.” In other words, a degree of consumer choice must be maintained consistent with previous GATT criteria related to trade in goods. At the same time, however, VanDuzer makes it clear that “the language of Article I.3(c) suggests that competition could have a ‘one-way’ meaning.” In this case, the criteria for evaluating the exclusion of a service under Article I.3(c) are based on whether a supplier is offering “services to all” and is not trying to “increase its revenues by attracting more consumers.” If so, these services “would be within the exclusion.” VanDuzer is relatively confident that under this interpretation Canada’s health and education services would remain protected; but he also points to the difficulty in predicting the outcomes of WTO dispute panels.28 In the decade following GATS, most provinces developed clearer priorities related to service-based industries. Provincial officials reviewed existing laws

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and regulations and are now aware that future GATS negotiations will have direct implications for areas of subfederal jurisdiction. In this regard, most provincial governments distinguish between “defensive” and “offensive” interests. Defensive interests require ongoing support for government regulatory capacity, especially in the areas of health and education. Offensive interests, by contrast, are services that might well benefit from a reduction of market barriers. An example is GATS Mode IV, which allows temporary access for professionals providing services in another country. Not surprisingly, most provinces have prioritized defensive interests. As already noted, however, divisions can develop even within “defensive” service sectors. A prime example is health and education, with some groups viewing GATS as a threat to Canada’s education system and others viewing it as an export opportunity.29 Several provinces have now developed specific GATS priorities. Ontario, for example, has initiated a comprehensive review of potential GATS liabilities. During this process a number of issues were highlighted. First, though the province is sensitive to defensive concerns related to education, there is support for greater liberalization of Mode IV provisions, especially in relation to professional services such as architecture, engineering, management, and accounting. Owing to issues of municipal jurisdiction, the province has also prioritized tour guide services as well as fishing, hunting, and other licence requirements. The distribution practices of provincial liquor boards remain a potential target, and general exceptions outlined in GATS may be less comprehensive than first believed. In addition, Ontario trade officials believe that GATS’ Article 1 provisions on “measures affecting trade in services” are unclear. Finally, there is evidence that provincial policy documents and public statements can now be used by the Appellate Body to clarify unclear practices under review.30 Ontario has also attempted to evaluate the exposure of services under NAFTA’s Chapter 11. In the area of private for-profit operations – for example, child care – the Canadian Union of Public Employees (CUPE) raised concerns during provincial labour negotiations that government funding could be targeted under Chapter 11. Though it was the Ministry of Children and Youth Services that was bargaining with the union, Ontario’s Ministry of Economic Development and Trade was eventually asked to evaluate a CUPE legal opinion on the issue. In drafting the rationale for the government’s position, Ministry of Economic Development and Trade (MEDT) consulted with Ottawa and other provinces; in the end, it was satisfied that its funding mechanisms, barring any unlikely government expropriation initiatives, were consistent with both NAFTA and GATS. According to one provincial official, “child care was not part of some conscious strategy but it seemed to indirectly reinforce provincial autonomy.” It also reflected “the uncertainties associated with provincial service based interests.”31

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The complexities of achieving provincial consensus on services are also evident in the positions of New Brunswick and Alberta. In its recently published international strategy, Prospering in a Global Community, New Brunswick specifies education and health as important export opportunities.32 Service exports related to knowledge and technology-based industries are also highlighted. Alberta, for its part, has identified the need to improve Mode IV access for engineers, who are still required to obtain certification in individual US states. Environmental service providers in Alberta have also been pushing for Mode IV improvements provided that access is not based solely on qualifications.33 Regardless, it is clear that Canada’s position on services is motivated by a multitude of often conflicting regional pressures. The result has been various degrees of influence on Canada’s foreign trade policy. Note well that success or failure in establishing norms and standards is tied to many pressures and that this further diminishes the impact of provincial interests at the international level. For example, the WTO Negotiating Group on the Movement of Natural Persons has successfully negotiated twenty schedules. Bernard Hoekman and Michel Kostecki suggest that these commitments, which include Mode IV temporary access provisions, “[do] not go significantly beyond the status quo.”34 Often these negotiations are driven by the concerns of developing states (such as India), which are reluctant to dramatically open their service sectors. Having said that, Hoekman and Kostecki add that temporary access for service providers has the potential for incremental liberalization.35 This is not to suggest that the movement of persons is not a priority for Canada and the provinces. Rather, it indicates that several areas of these agreements do not reflect significant Canadian influence. Financial Services and Government Procurement In evaluating the provinces’ impact on NAFTA and Uruguay Round negotiations, it is helpful to briefly examine provincial exclusions related to financial services and government procurement. NAFTA includes various provisions allowing provinces to maintain existing measures: Annex I (Reservations for Existing Measures and Liberalization Commitments); Annex V (Quantitative Restrictions – Chapter 12); and Annex VII (Reservations, Specific Commitments, and Other Items – Chapter 14). Generally, provincial service providers enjoy considerable autonomy when establishing financial institutions and new financial services, when building data processing capabilities, and when appointing senior managers and boards of directors. The financial services sector also allows for “prudential exceptions” – a term ambiguous enough to exempt a significant amount of activity in this sector.36 Negotiations for financial services during the Uruguay Round were contentious and threatened to delay the agreement. In the end it was agreed

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that discussions related to financial services (as well as basic telecommunications and maritime transport) would continue after the WTO was created. Negotiations for financial services were not concluded until December 1997. The end result comprised fifty-six schedules involving seventy member-states, which were annexed to GATS. The final financial services agreement was similar in many ways to related NAFTA provisions. Most important, it contained a “so-called ‘prudential carve-out’ for domestic regulation on financial services,” which provided considerable flexibility for signatories, just as in NAFTA.37 Once again, however, Canadian interests did not play a significant role in this part of the agreement. Instead, the final legal text reflected the interests of developing countries, which feared the impact of liberalization on the regulation and management of domestic financial services. In this sense, the provinces benefited from a form of “autonomy by proxy,” which allowed provincial bureaucrats to devote their limited time and resources to other issues. In both NAFTA and the Uruguay Round, the provinces were also able to protect specific interests related to government procurement. The CanadaUS Free Trade Agreement (FTA) had restricted itself to federal procurement. NAFTA extended this to include the procurement of goods, services, and construction services. Canada, however, succeeded in exempting research and development, health and social services, utilities, communications, education and training, and financial services. Activities related to the delegation of government services to private corporations were also excluded from NAFTA.38 Participation in the WTO Government Procurement Agreement (GPA) was limited mainly to developed countries. Unlike other signatories, however, Canada did not grant foreign parties equal status with domestic suppliers when it came to bids for government procurement contracts. Also, Ottawa was able to exempt provincial, municipal, and regional governments from the GPA. Thus, Canada is not able to bid on government contracts in the jurisdictions of other signatories. Canadian provinces, however, can gain access to procurement contracts in US states.39 Consultation: Provincial Sectoral Linkages The provinces’ consultative exercises with sectoral interests take no standard form. At the federal level, two different sets of consultative linkages were established for the FTA negotiations: the International Trade Advisory Committee (ITAC) and the fifteen Sectoral Advisory Groups on International Trade (SAGITs). There are no equivalent mechanisms at the provincial level. Where contacts exist, they often shift from sector to sector and within industries. Several branches of provincial bureaucracies tend to be involved, including trade policy offices and line departments. As a result of all this, consultative ties are difficult to evaluate in terms of domestic and international outcomes. Moreover, it is not always clear whether provincial decisions are a direct result

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of ties with business. The following section argues that consultative efforts have only a limited impact outside a small number of key sectors and that most such consultations are tied to specific international negotiations or disputes. Central Canada As noted in Chapter 4, Ontario did establish consultative mechanisms with business and non-governmental interests during the NAFTA negotiations. More recently, Ontario’s MEDT has engaged business interests in a wide range of sectors. During the softwood lumber dispute, for example, there was initial contact between MEDT and producers and remanufacturers. Sectoral interests also met with officials from the Ministry of Natural Resources, the provincial department responsible for forestry. Regarding MEDT, contact was limited to a small committee of five or so officials and industry lawyers. Membership on the committee was decided within the sector, but for the most part it was the larger companies that were represented. The problem Ontario faced was that producers and remanufacturers had divergent interests. Also, tension between MEDT and Natural Resources prevented the development of a unified provincial position on the dispute. Ultimately, as one bureaucrat noted, the province decided to side more with the manufacturing interests, “as it was more consistent with Ontario policy.”40 In other sectors, MEDT takes an active but informal approach in its attempts to engage industry, especially in terms of ongoing WTO negotiations. In relation to services the department has developed a contact list of relevant firms, though it is often difficult to generate interest from sectoral groups. On issues related to investment protection, MEDT has enjoyed more success, though in this sector contact has been limited to corporate lawyers (as opposed to industry representatives). In matters related to automobiles, MEDT is not involved. This sector – by far Ontario’s largest source of both exports and imports – is handled directly by the Premier’s Office, which attempts to strike a balance between North American producers (GM, Ford, Chrysler) and Japanese ones. The result, says one official, is “extremely ‘neutral’ policy statements” in this sector.41 At the same time, there is a consensus in some Ontario government departments that commercial interests have minimal impact on trade policy. A senior bureaucrat suggested that with the exception of specific disputes, such as softwood lumber, the “business lobby in Ontario is not very effective.” The Ontario Chamber of Commerce, for example, does not have the capacity to engage government on trade policy; other potential players, such as the Ontario Board of Trade, do have that capacity but “choose not to bother.” In addition, other sectoral groups fail to contact the provincial government “because they think we don’t matter.” In these situations, “industry attention is instead focused on Ottawa.”42 Another trade representative

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noted that sectoral interests “like to complain, but they rarely have any tangible alternative policy options to offer.”43 Having said that, the previous official did suggest that an absence of linkages is not necessarily a negative thing, especially given the government’s limited resources. Staffing is an issue, and furthermore, “there are no political reasons to pursue this. We simply don’t need the legitimacy.”44 Similar patterns of industry engagement are present in Quebec. There, as in Ontario, sectoral consultations are dispersed, but most contact is with line departments. This is especially the case with agriculture and forestry, where consultation with sectoral interests has played an important role in the development of Quebec’s international policy.45 Indeed, during international disputes Ottawa has relied on these linkages for information and expertise. Recent examples include Europe’s challenge of the Canadian asbestos industry and Brazil’s complaints about unfair subsidies to the aeronautics sector (most notably Bombardier). Quebec differs significantly from other provinces, however, in its corporatist tradition. Stephen Brooks and Andrew Stritch have defined that tradition as “a tripartite political structure in which the business elite and the tradeunion elite have jointly incorporated with the state elite into a centralized system of authority dominating the policy making process in capitalist societies.”46 Various models of corporatism emphasize different roles for the state. In “state” corporatism, government exercises significant control over business and labour. In “liberal” or “societal” corporatism, a more equal relationship exists in which labour and business have the capacity to influence the government’s agenda. Marxists, such as Leo Panitch, argue that corporatism is a means to co-opt labour into an alliance with state and business in order to maintain a stable economy, thereby limiting the possibility of organized opposition to capitalism.47 Several observers doubt whether corporatism is relevant to Canadian politics, owing to the fragmentation of industry, labour, and government. William Coleman, for example, has concluded – reluctantly – that these divergent interests have prevented coordinated industrial policy in Canada.48 Even Panitch acknowledges the absence of a corporatist “structure” in Canada, though he does concede that corporatist “ideas” have had occasional relevance.49 Wallace Clement, on the other hand, stresses “kinship ties” between economic and state elites, which have contributed to government restrictions on foreign ownership in the banking, insurance, utility, and transportation sectors.50 Despite these challenges, there is evidence of a corporatist tradition in Quebec dating back to the 1960s. After the Quiet Revolution the province hired significant numbers of personnel from Quebec’s business and nongovernmental communities in order to fill its expanding bureaucracy.51 According to Montpetit, this “certainly prompted the emergence of state-directed

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or state corporatist networks,” though these differed from sector to sector.52 Over the following decade the labour movement challenged government policies, which contributed to the election of the Parti Québécois (PQ) in 1976. The PQ promised to institutionalize a neocorporatist relationship involving the state, trade unions, and business. One specific example was the PQ’s creation of the Conseil du Patronat du Québec (the Council of Employers) as a consultative mechanism. In this forum members of the executive and the bureaucracy met with specific sectoral interests on an informal basis, usually two or three times a year. Membership on the council (which still exists) included the provincial Chamber of Commerce, major industry and labour leaders, and representatives from most industry associations in Quebec.53 Though some observers, such as Brian Tanguay, question the success of the PQ in this process, it is generally accepted that even with the return of Robert Bourassa and the Liberals in the 1980s, Quebec maintained elements of corporatist politics.54 In the 1990s, corporatist networks continued to expand to include a wide range of groups with differing levels of influence. The 1982 Conférence au Sommet de Québec, a facet of the corporatist process, included traditional participants such as trade unions, the Council of Employers, and consumer associations. By 1996 these meetings were also being attended by community groups, individual entrepreneurs, and “para-public” sector organizations such as the Centres Locaux de Services Sociaux et Communautaires (CLSCs). Montpetit suggests that the proliferation of participants was the result of an increasingly post-materialist agenda in which new issues, such as the environment, became focal points of government activity. Another contributing factor was budget cuts in the 1980s, which led to the emergence of community groups seeking access to the policy process. Montpetit notes that challenges to Quebec’s corporatist tradition have been developing over the past two decades. There is increasing distrust of that tradition among groups not included in the decision-making hierarchy. A more significant development is that pressures are building related to international market forces and the threat of an increasingly intrusive and expansionist federal government. For Montpetit, these developments have the potential to weaken corporatist ties in the province.55 The FTA exposed early divisions in Quebec’s corporatist framework. There was significant support for the FTA within the business community; however, opposition to it emerged among the larger provincial unions. Complaints from labour are not unique in Quebec; in this case, they focused on potential threats to employment. Groups opposed to the FTA also pointed to its impact on government subsidies, social programs, and cultural issues. These disagreements were highly visible during the 1988 federal election, during which business interests organized the Regroupement pour le Libre-Éxchange (Free Trade Support Network), which financed an extensive media campaign

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to challenge labour’s opposition.56 In the aftermath of the FTA and NAFTA, however, corporatist ties were restored. During public consultations by the Quebec National Assembly in September and October 2000, two major labour groups, the Confédération des Syndicats Nationaux (CSN) and the Fédération des Travailleurs du Québec (FTQ), supported the proposed Free Trade Area of the Americas (FTAA), albeit with calls for social issues to be a priority in any negotiations.57 Skogstad has examined corporatist relations in Quebec’s agricultural sector. Specifically, she has observed traditional province-based corporatist networks as well as interests seeking “national corporatist decision-making” structures. The “first face” of Quebec agriculture supports the “disengagement” of Quebec from the federal agricultural system. Ongoing support for this position is a result of the province’s expansionist agricultural policy, Ottawa’s decreased spending, and a decline in the number of farmers benefiting from federal supply management programs. For those advocating this position, the increasing intrusiveness of international market pressures is secondary to “provincial state-building and federal fiscal constraints.”58 The Union des Producteurs Agricoles (UPA) serves as Quebec’s corporatist farm union. Indeed, Bourassa recognized the UPA as a monopoly union in 1972, granting it the right to collect membership fees from all provincial farmers. The UPA also has a close working relationship with the province’s agricultural bureaucracy, the Ministry of Agriculture, Fisheries, and Food (MAPAQ). This has translated into significant policy influence at the provincial level.59 The “second face” of Quebec agriculture supports pan-Canadian corporatist networks. These interests are mainly in the dairy and poultry sectors and view international developments – especially in terms of Canada-US relations – as economic incentives to support Canadian federalism. This attitude is understandable, given Ottawa’s proven ability to protect Canada’s supply management systems under both NAFTA and the FTA and to resist strong pressure to dismantle these programs. The same pan-Canadian network, however, later promoted GATT-induced liberalization and fostered a 1995 agreement among six provinces, including Quebec, to harmonize dairy policy. The broiler industry in Quebec has accepted the possibility of provincial self-sufficiency; the province’s dairy and poultry producers have benefited from “political cooperation and concessions across provinces.” It is these “trust ties” that foster national corporatist networks focusing on supply management. Western Canada In Manitoba, sectoral consultation is the responsibility mainly of line departments; also involved, though, is the Director of Policy, Planning, and Coordination in the Administration and Finance Division of the Department of Industry, Economic Development, and Mines. For the most part, linkages

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are ad hoc and are driven by disputes or problems within sectors, though on broader negotiations the province has actively sought the views of specific industry associations. A senior official pointed out that one of the difficulties in Manitoba is the diversified nature of the provincial economy. “There is a well-established Chamber of Commerce in Manitoba, but each sector is represented with varying capacities. In the apparel sector there are numerous companies and agriculture is not solely farming, but also includes food and beverage processing. Steel, on the other hand, is one main producer.” Not surprisingly, he suggested that “it is difficult to maintain close contact with all of these varying interests on a regular basis.”60 Sectoral consultation in Saskatchewan is often limited to line departments, though there are some attempts to coordinate activities within the province’s Trade Policy Branch. Most such ties are related to agriculture as well as transportation and environmental services. Generally, linkages within government are collegial. “Agriculture is a good example of this,” suggested one bureaucrat. “Saskatchewan is able to avoid problems faced by other provinces due to the unified voice that exists in this sector.” The province’s small population and dependence on trade promotes cooperation between business and government. “For us the issue is simple,” said the same official. “We are now the second most trade-oriented province in Canada.” Put simply, “trade is our lifeblood here.”61 Alberta maintains consultative linkages with many sectoral interests. The province long made a point of maintaining a list of provincial participants on federal SAGITs in order to share information and consult with these groups. According to Alberta officials, however, this became more difficult owing to a lack of updated lists of provincial SAGIT members. Regardless, the province’s commitment to consultation is evident in several sectors. In terms of energy, the main industry association is the Canadian Association of Petroleum Producers (CAPP). CAPP has an office in Calgary, and according to one senior representative it has “expertise related to a number of crossborder energy issues.” The difficulty is that CAPP is “a national organization [with] a wide mandate.”62 Contact with energy interests, however, sometimes does not take place in specific associations. In 2004, for example, the Alberta government sent a delegation to the Global Petroleum Conference in Calgary. At this forum the province focused mainly on oil-and-gas field equipment as well as environmental services (such as waste disposal). Alberta has also developed industry linkages with the forestry sector, largely in response to the softwood lumber dispute. Here the Alberta Forest Products Association (AFPA) represents a full range of sectoral interests, including pulp and paper, remanufacturing, and primary harvesters. A subgroup within the AFPA is the Softwood Lumber Trade Council, which comprises approximately fifteen corporate representatives. Though there are obvious divisions within the AFPA, the association operates on the understanding that individual

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companies can pose questions and concerns directly to government. A provincial bureaucrat considered this important, given the varying size and interests of AFPA members. “If government is going to articulate these positions,” he suggested, “we need a forum where we can get this information.” Unlike other provinces, “many of these firms can’t afford legal counsel and lobbyists in Washington.” For the most part, however, this contact is with the Ministry of Sustainable Resource Development, though Trade Policy is also involved on a selective basis.63 In the services sector, Alberta has launched consultation efforts, economic studies, roundtables, and surveys in order to evaluate specific priorities. The province prides itself on having one of the most developed negotiating positions on services in Canada. It has also worked collegially with other officials at both levels of government to develop negotiation strategies, especially in relation to GATS.64 At the same time, however, Alberta has encountered problems when it comes to facilitating dialogue with the wide range of actors with potential interests related to services. Under economic pressure, industry associations and corporations have reduced staff and capacity, including trade specialists. As a result, the expertise to deal with complicated service issues no longer exists, and this has created a need for independent consultants – something that many firms and industry associations cannot afford. The technical nature of this sector has also created an additional barrier to direct participation.65 BC’s Trade and Competitiveness Branch (TCB) has selected contact with sectoral interests. During the 1990s there was a shift in the way the New Democratic Party (NDP) government’s bureaucracy dealt with industry. Specifically, meetings with corporate interests became less frequent. As one provincial bureaucrat noted, the new government saw its support coming from labour and environmentalists and made it a priority to engage such groups.66 By 1999, however, the NDP had decided to expand dialogue, and the Ministry of Employment and Investment established an open-access Web-based initiative focusing on the ongoing WTO and FTAA negotiations. In particular, the ministry made available background papers covering a range of topics, including competition policy, technical barriers to trade, investment, services, the environment, intellectual property rights, government procurement, dispute settlement, e-commerce, and labour and human rights.67 In almost every case, BC’s position on these issues was not presented, except for some commentary on investment, services, and government procurement.68 A separate survey for small and medium-sized businesses was also included in this program. Sectoral linkages also existed during the NDP era with line departments outside Trade Policy. In March 1999, for example, the BC Ministry of Agriculture and Food launched its own consultative linkages in an attempt to establish a province-wide position on agriculture for the WTO and FTAA.

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The ministry created the BC Agri-Food Council on Trade and Subsidies (BC-ACTS) for this purpose. The panel comprised twenty-five members representing the interests of major commodity producers, processors, retailers, provincial marketing boards, consumers, and labour. Unlike Trade Policy’s initiative, BC-ACTS was not Web-based. Instead, it invited interested parties to mail, phone, or fax in comments and suggestions. Following the defeat of the NDP, the new Liberal Minister of Agriculture, Food, and Fisheries, John van Dongen, established the BC Agri-Food Trade Council, which is similar to BC-ACTS. This forum meets three times a year; attendees include the heads of industry associations and the presidents/CEOs of agri-food businesses.69 Labour leaders are noticeably absent. Following the return to power of the Liberals, Trade Policy was encouraged to expand its consultative efforts. For the most part, however, it has not done so; instead it has focused on negotiation and implementation.70 One example is the ongoing dispute between Canada and Europe regarding the pine nematode. Though this is a forestry issue, one official in TCB handles the file. There is no direct contact with individual business interests; however, close ties are maintained with one of the key lumber industry associations in the province, the Council of Forest Industries.71 The Ministry of Forests is responsible for all other consultations with the forestry sector. This is a wellestablished relationship that at times has become almost “symbiotic.”72 Atlantic Canada There are varying levels of contact between government and industry in Atlantic Canada. In Nova Scotia, the Committee of Manufacturers and Exporters (CME) represents a wide range of international and domestic trade sectors. It meets once a month, with government officials usually in attendance. Similar ties exist, on a less regular basis, with the Atlantic Chamber of Commerce and the Maritime Lumber Bureau (MLB). There are also ad hoc consultations among industry, line departments, and Nova Scotia’s Trade Policy Branch.73 In New Brunswick, most industry contact is also with line departments, especially in terms of agriculture and fisheries. Trade Policy becomes involved when specific issues are related to disputes or to the negotiation and implementation of international agreements. According to a recently retired New Brunswick bureaucrat, the province often used information from sectoral interests to pressure Ottawa on trade issues. When US companies were dumping candy into the Canadian market, for example, New Brunswick adopted the advice of Ganong Candy, a local confectionary company established in 1873, and “pushed the federal government to ensure labelling was bilingual.” He also noted that during the FTA negotiations, it was New Brunswick that warned Simon Reisman, Canada’s chief negotiator, to “back off on agriculture because provincial farmers would never accept an agreement.”74

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Though Prince Edward Island only recently appointed an official to monitor foreign trade, the government has made some attempt to develop stronger ties with industry. Historically, PEI had no sectoral diversity, and its agricultural exports usually were not processed. The closing of the Canadian Forces Base (CFB) at Summerside, however, forced the province to develop new export sectors. Shipbuilding, for example, developed a market in Central America after subsidies were provided to one shipyard specializing in tugboats. Also, the former CFB became a manufacturing centre for large aircraft engines and interiors for Bombardier. Overall, however, the province continues to be dominated by agriculture; thus consultative linkages are most developed with the sector’s main industry associations – the PEI Potato Board and PEI Dairy Producers. Lobbying efforts by these groups are usually directed at the minister and deputy minister, given the grassroots nature of PEI politics. This was most evident during a recent dispute between Maine blueberry producers and PEI. The provincial minister was contacted quickly; PEI’s part-time consultant on foreign trade wrote a letter on the issue, which was then sent to the federal minister of agriculture.75 Sectoral consultations in Newfoundland and Labrador are similar to those in other Atlantic Canadian provinces. Stakeholder consultations are on an as-needed basis, and when they are held it is often in conjunction with federal initiatives. Typically, this contact is strongly issue-driven. In some cases divisions within specific industries can create challenges for the province. Recently, for example, the provincial government attempted to impose a processing system on the crab fishery that challenged traditional methods of distribution. Historically, large processors would offer incentives to bigboat fishers to gain access to their holdings of crab. Provincial legislation ended this practice, and new provisions allocating specific levels of crab to individual processors were welcomed by smaller owners and fish co-ops. Companies that benefited from the previous system organized a protest that closed the Confederation Building in 2005. The legislation is now under review, and “although there was no consultation prior to the original decision, there is now considerable input from industry.”76 Sectoral Protectionism, Liberalization, and Consultation: The Role of Dominant Ideas Based on the above discussion, it is clear that dominant ideas related to sectoral liberalization and protectionism exist in Canadian provinces. To influence outcomes, subfederal ideas must be sponsored by institutional elites. An example is alcohol, where there are long-standing protectionist policies related to provincial liquor boards. Government support for protectionism in this sector shifted somewhat after the 1987 GATT dispute panel; but dominant protectionist ideas have remained, as has official backing for

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these concerns. Though the subsequent New World Wine Accord was driven by the pursuit of expanded export markets, dominant protectionist ideas have ensured that the agreement has had only a negligible impact on Canadian provinces. Agriculture is another sector with embedded ideas related to liberalization and protectionism. Indeed, Canada has a long record of support for supply management and other methods of agricultural assistance. Historically, these policies have been tied to dominant protectionist ideas in Canadian provinces. In Quebec, for example, officials in provincial institutions sponsored protectionism, which contributed to government programs and regulatory frameworks designed to assist the province’s dairy and poultry industries. Protectionism in this sector has, however, diminished in recent years. As noted earlier, in the 1990s the federal government reduced protectionism as part of its deficit reduction project. Also, some provinces are much more protectionist than others in this sector. Some provincial officials, for example, have embraced principles of liberalization. Not surprisingly, conflicting subfederal ideas make it difficult for the federal government to develop a consistent international position on agriculture. Provincial ideas regarding services are relatively new and further highlight inconsistencies related to liberalization and protectionism. BC, for example, succeeded in obtaining federal and provincial sponsorship for specific exclusions in NAFTA’s Annex II. Conversely, Ottawa’s failure to endorse similar language in the WTO’s GATS provisions reflected an absence of elite support. Provincial ideas in this sector have been developed as well during the current Doha Round of negotiations. For example, Ontario supports the liberalization of professional services but also seeks the protection of education, licensing, distribution practices, and other selected social programs. New Brunswick has expressed a desire to pursue global markets for health and education services but not at the expense of compromising provincial practices. Alberta, on the other hand, is promoting the liberalization of environmental and engineering services, as well as Mode IV access issues. Once again, these conflicting dominant ideas contribute to an increasingly complex policy process in Canada. Given the relatively recent attention devoted to negotiations on services, it is difficult to evaluate these ideas in relation to long-term international outcomes. Dominant ideas of liberalization and protectionism, then, are sector and often province specific. Furthermore, those ideas are not monolithic, which means that differing opinions exist within industry and government. Whatever those inconsistencies, there is evidence that Canada has been able to protect specific sectoral concerns and, in the process, has succeeded in influencing international outcomes. It is important, though, not to overstate the impact of provincial dominant ideas beyond domestic process issues.

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No doubt, those ideas are taken seriously, but not all are endorsed by federal and provincial officials whose hard task it is to achieve consensus and broker compromises among growing numbers of participants. Even when institutional support exists, subfederal objectives can be consistent with the positions of other states, and this raises questions regarding what actually drives international outcomes. Finally, there is the reality that dominant sectoral ideas are often better reflected in bilateral and trilateral agreements (as opposed to multilateral ones). Canadian provinces do not have embedded ideas regarding sectoral consultation. Most consultative linkages between government and industry at the provincial level are informal and sector specific. Not surprisingly, corporate interests whose dominant ideas are related to liberalization or protectionism tend to have the most contact with government. Those sectoral interests often seek government support, which, however, does not guarantee success in terms of international outcomes. The exception to this is Quebec’s corporatist tradition. Quebec has long avoided the fragmentation of ideas that exists in other provinces regarding consultation. Challenges to corporatist ties emerged during the FTA negotiations, but these pressures have weakened over the past decade in relation to the now stagnant FTAA negotiations. Yet as Skogstad points out, agriculture is one sector that transcends the traditional corporatist argument in Quebec. Internal provincial linkages exist, but in her view the success of dairy and poultry interests with regard to supply management is tied more directly to a pan-Canadian corporatist network. Conclusion Provincial sectoral interests have influenced both Canadian foreign trade policy and the development of international norms and standards. In the case of agriculture and the WTO, Canada’s decision to reject US proposals related to Article 2.2 of the SCM was directly linked to subfederal subsidy programs. Canadian provinces also influenced Canada’s negotiating position on Article 8.2 (exemptions for regional development programs). In terms of NAFTA, specific provinces ensured that health care measures in existence prior to 1994 were excluded from Annex I of the agreement. Also, BC was instrumental in protecting NAFTA’s Social Service Reservation, though similar efforts for WTO exemptions did not succeed. Finally, subfederal interests were well represented in the New World Wine Accord and in agreements between Canada and the EU on labelling and marketing. Yet it is important to note that the positions of subfederal governments are not driven solely by industry. Obviously, Canadian provinces protect sectors that are vital to economic growth and stability, yet there are surprisingly few ties between business and government at the provincial level. Few provinces have formalized their linkages with industry groups; instead, such contacts are tied to specific international negotiations and trade disputes.

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Also, there are no regular consultation forums comparable to the federal ITAC and SAGIT systems. Government-industry consultations that do exist are held across a wide range of bureaucratic actors, including trade policy branches and line departments. Finally, there is evidence of provincial vulnerability in terms of NAFTA Chapter 11’s evolving role as a preventative regulatory regime. New Brunswick’s rejection of public auto insurance owing to potential Chapter 11 exposure demonstrates the often limited capacity of provinces and subfederal business interests to withstand international pressure or to shape outcomes in the global political economy. So, while the significance of business in the formulation of provincial trade policy is hard to deny, process factors vary among industries and often within specific sectors.

7 Is Anybody Listening? Evaluating Societal Considerations

Ottawa has attempted to engage societal actors in matters of foreign trade policy. The provinces, much less so. In Ontario, environmental issues related to agriculture are driven by industry; in the forestry sector, Aboriginal groups have had some impact. In Quebec, institutionalized consultative mechanisms were established under the Parti Québécois, and the province has a long corporatist tradition; however, the current Liberal government relies on other, arguably less inclusive forums. Alberta has a limited history of non-governmental activism with existing linkages dominated by business. In BC, interaction with societal interests increased during the New Democratic Party (NDP) governments of the 1990s; however, the influence of labour and environmentalists (though not of First Nations) has diminished over the past decade. Despite all the differences, it is possible to identify a number of commonalities in the provinces’ government-societal relations. First, contact, when it happens, typically involves specific ministries rather than trade policy departments. Also, some provinces with limited bureaucratic resources tend to engage societal interests mainly during federal consultations. Governmentsocietal relations are further marginalized owing to the generally held view within governments that societal groups are uninformed on trade issues. Moreover, many societal interests in this policy area suffer from similar limitations of funding and resources. Finally, besides normative concerns related to transparency and access, there is the difficulty of evaluating societal “influence,” especially when non-governmental goals are consistent with existing provincial policy preferences. Regardless, at this time it does not appear that domestic societal pressures contribute in any strong way to provincial foreign trade policy or to the evolution of international norms and standards. Attitudes regarding the legitimacy of non-governmental actors, however, do influence dominant ideas related to participatory democracy – ideas that contribute to provincial political cultures.

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The Role of Societal Factors In studies examining the political economy of international trade there are conflicting views on the relevance of societal considerations. Some observers are critical of transnational market forces and endorse the principle of cosmopolitan democracy, which calls for the democratization of international institutions and the development of a form of citizenship that extends beyond the nation-state.1 Traditional Marxist and dependency interpretations emphasize the exploitive nature of the global economy and look to class-based forces as a means of change.2 More recent “social movement” approaches focus on identity and culture as mobilizing influences, especially in terms of Latin America and Mexico.3 In contrast, communitarian or state-centred perspectives treat societal forces as secondary variables.4 The role of societal interests is also addressed in the Canadian literature, especially in terms of interest groups and social movements. Interest groups, for example, vary in organization and focus but are generally viewed as having formal structures and the capacity to articulate positions with the goal of altering policy preferences, albeit without assuming elected office.5 As an extension, studies examining “policy communities” and “networks” focus on formal and informal interactions between interest groups and the state.6 Social movements, for their part, tend to lack formal organization; with membership including a broad range of societal actors.7 Recent contributions have also argued that neoliberalism has altered the nature of political institutions and democracy in Canada.8 The role of societal considerations has also been evaluated in studies examining the democratization of Canadian foreign policy. Institutional perspectives have called for a wide range of reforms, including a greater role for the House of Commons, improved access to parliamentary committees, and stronger efforts to educate citizens at the constituency level.9 Other observers have argued for a greater role for non-governmental actors, including “ordinary Canadians,” in the policy process.10 Studies examining international trade, on the other hand, point to the impact of the MAI and the Seattle meetings of the WTO – both of which failed – on Ottawa’s decision to increase linkages with civil society.11 Another empirical analysis of public attitudes toward international trade has identified a “permissive consensus” in Canada based on the perception that foreign trade agreements increase prosperity without undermining the welfare state.12 Those opposing this view critique the apparent exclusion of non-corporate interests and suggest that the co-optation of these actors creates “long-term implications for social cohesion and democracy.”13 Specific attention to these conclusions is most apparent in studies examining Canada’s antiglobalization movement.14 Recent attention, therefore, has been directed toward the relevance of societal factors for international relations, for Canadian politics, and for

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Canadian foreign policy, but few studies have considered similar questions at the provincial level. For the most part, the role of societal actors in Canadian provinces is not significant, with some sector-specific exceptions such as agriculture, services, forestry, and the environment. Quebec’s corporatist tradition challenges this assumption, though the impact of that province’s societal groups on specific matters of trade policy seems questionable. In most cases, then, there is little evidence that non-governmental pressures directly alter the trade policies of provincial governments. This lack of influence is due to the fact that most civil-society organizations are national in scope; for that reason they neglect the relevance of provinces to foreign policy. Funding issues, which limit federal participation, are also relevant at the provincial level. Finally, most provinces have limited interest in consulting with societal groups unless they require their information or expertise. When contacts do occur, it usually involves specific ministries, such as education or forestry, rather than trade policy branches. Ontario: Agriculture and the Environment These trends are evident in Ontario, especially when it comes to contentious issues such as the environment. Generally, the Ministry of Economic Development and Trade has minimal contact with societal groups; most efforts to engage government occur in other ministries. On water issues, for example, non-governmental interests focus on the Ministry of the Environment. For services, attention is usually directed at the Ministry of Education. In some cases, however, contact points with government are less clear. The environment ministry, for example, does not usually handle issues related to agriculture. According to Éric Montpetit, Ontario’s Environmental Protection Act does not address “normal” farming practices and “core agro-environmental issues” are the responsibility of the province’s Ministry of Agriculture and Food.15 Agricultural practices are such that that ministry has also been drawn into a series of other environmental issues, however, including Great Lakes water pollution during the 1970s. This policy overlap was further evident when the ministry negotiated federal-provincial soil erosion agreements such as the Soil and Water Environmental Enhancement Program (SWEEP). For the most part, both farmers and the Ontario government have relied on the Ontario Soil and Crop Improvement Association (OSCIA) to administer these programs. In the 1990s, however, the relationship between farmers and government began to change. Historically, agricultural groups in Ontario had relied on representation from three groups: the Ontario Federation of Agriculture (OFA), the Christian Farmers Federation of Ontario (CFFO), and the National Farmers Union (NFU). After the 1990 provincial election, however, Bob Rae’s NDP government proposed an Environmental Bill of Rights and a

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new advisory panel of agriculture representatives. This group disbanded soon after it was formed, and members from the OFA, CFFO, and other commodity-based associations established the Ontario Farm Environmental Coalition (OFEC). This coalition was eventually expanded to include livestock and field crop producers. Unexpectedly, the Government of Ontario bolstered the legitimacy and financial capacity of OFEC through the Farm Registration and Farm Organizations Funding Act (1993), which required farmers to pay dues to either OFA or CFFO. Montpetit has argued that these developments subordinated the Ontario government to farming interests, especially in terms of the Environmental Farm Plan. Though the environment ministry identified agricultural practices as a major polluter, it failed in its attempts to challenge the farmers’ coalition. Significant budget cuts following the election of the provincial Progressive Conservatives in 1995 meant that further attempts to expand the department’s mandate were impossible. After the Walkerton tragedy some restrictions were placed on the agricultural sector through the 2002 Nutrient Management Act; for the most part, though, the sector remained largely self-regulated.16 At first glance it would seem that this discussion of Ontario’s agricultural sector belongs in the previous chapters on sectoral influences. This example demonstrates, however, the subordinate role of non-business societal interests in Ontario. In the case of agriculture, sectoral pressures trumped environmental ones. According to Kathy Brock, this is not surprising because the “liberal ethos in Ontario, with its commitment to individualism, a free market economy, and rights, has meant that government is open to a diversity of views while supportive of the capitalist structure and relations.”17 Yet at the same time, Brock suggests that though this exposes the Ontario government to pressure from potentially thousands of interest groups, business has the most influence. This is reinforced by the fact that a large number of federal industry associations and major corporations have their headquarters in Toronto. These include groups with ties to banking, insurance, mining, education, health, agriculture, and the service sector. Religious, First Nations, environmental, antipoverty, and other issue-oriented groups are also well entrenched in that city.18 The Ministry of Economic Development and Trade’s (MEDT’s) limited involvement with these interests is somewhat surprising. As one representative suggested, the only time MEDT consults with civil society “is when we get the odd phone call or have a personal relationship with members of these groups. For the most part we just don’t seem to be on the radar.”19 This is not to suggest that MEDT actively discourages engagement with civil society. In fact, several officials noted that greater linkages could help defuse the suspicion that exists between societal interests and economic branches

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of government. “They tend to look at us as the Horsemen of the Apocalypse,” said one bureaucrat, “but after we actually have a personal discussion we usually find that we can get along.” The same person noted that “the Sierra Club was especially active on Great Lakes water issues” during the North American Free Trade Agreement (NAFTA) negotiations, which at least “forced us to consider policy initiatives that acknowledged water as a limited and non-renewable resource.” Indeed, “several US governors began working with Ontario on an annex to the Great Lakes Charter on this very issue, so that certainly says something.”20 There are some exceptions to existing government-societal relations in Ontario. Officials in MEDT met recently with the Canadian Centre for Policy Alternatives (CCPA), which at the time was conducting stakeholder research on services. Though there is no broad strategy of consultation, provincial representatives have shared working papers with the CCPA on this issue. According to one senior policy adviser, this is an “extremely productive relationship.” Ontario and the CCPA “both understand that negotiations on services can be ambiguous so there’s nothing wrong with probing and pushing in this area.” Though the department has developed considerable expertise in this policy area, “there’s nothing wrong with having a dialogue like this. Sometimes we agree and often we don’t, but it is a very civilized process.” The same official made it clear, however, that though input from the CCPA is productive, “it does not define the province’s final negotiating position on these issues.”21 Another example is forestry. It is now understood that all Canadian provinces have an obligation to consult with First Nations groups. This point was supported by the 1996 Royal Commission on Aboriginal Peoples, which made specific recommendations to improve Aboriginal participation when forest resources on Crown lands are being developed. According to Evert Lindquist and Adam Wellstead, these recommendations, and relevant judicial challenges, have established a new pattern of partnerships between indigenous groups and all levels of government, though these relations tend to “vary significantly from community to community.”22 In terms of Ontario, Karine Levasseur and Stephanie Paterson have noted that varying levels of shared regulatory governance already exist in northern communities such as Dryden. As forest companies seek to harvest this timber, provincial governments are increasingly required to engage these interests; the result is “overlapping authority” and the possibility of a “two ‘royalty’ payments” system.23 This has obvious implications for provinces that export softwood lumber. Quebec: State and Societal Linkages As Chapter 6 suggests, there is a corporatist tradition in Quebec politics that fosters relations between state and non-governmental actors. These corporatist

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networks emerged during the Quiet Revolution and represented a new era in state-societal relations. Ontario and Quebec are somewhat similar with regard to interest-group activity. In Quebec, as in Ontario, a provincially based business class has become an active policy participant. Both provinces also emphasize agriculture, and these industry groups tend to be well organized and to have considerable influence.24 There are, however, also specific differences between the two provinces. First, labour tends to be more involved in Quebec’s policy process. As Rand Dyck has pointed out, Quebec’s “interest group culture” tends to closely associate “group” with “provincial” interests, thereby integrating secular and nationalist societal actors “to an unusual degree.”25 The corporatist reality of Quebec politics is further enhanced by the highly organized nature of the province’s civil society. Its three largest trade unions, the Confédération des Syndicats Nationaux, the Fédération des Travailleurs et des Travailleuses du Québec, and the Centrale des Syndicates de l’Enseignement du Québec, provide an organizational base for labour interests in Quebec. Unlike other provinces, Quebec civil society also benefits from “peak associations,” which draw together groups with similar interests. Gender issues are represented by the Fédération des Femmes du Québec, whereas the environment falls under the mandate of the Union Québecoise pour la Protection de la Nature. Professional associations such as the Fédération des Médicins Omnipraticiens du Québec and la Fédération des Médecins Specialistes du Québec regulate the medical profession. Ultimately, though divisions exist in Quebec civil society over a broad range of issues, the harmonization and organization of non-governmental interests provides a degree of coordination and influence not found in any other Canadian province.26 In matters of foreign trade policy, contacts are made directly with line departments; information is then passed to other relevant officials within the provincial bureaucracy. In response to pressure from civil society before and after the Organization of American States (OAS) Summit of the Americas in Quebec City, the Parti Québécois (PQ ) also convened a panel, the Quebec Observatory on Globalization in late 2001. According to Nelson Michaud, this panel was linked to ongoing WTO negotiations and the proposed Free Trade Area of the Americas (FTAA) and was designed to address the public’s “fears about globalization.”27 Michaud emphasized, however, that the panel was an autonomous institution, not a government agency. According to the PQ it was to be a “genuine roundtable” based on direct citizen participation rather than a consultative body or a “socio-economic summit.” It was anticipated that a website would be designed to disseminate information to the public as well as to increase “democratization.” From the outset, however, several questions were raised about the panel’s actual purpose. A number of critics saw it as an “appendage” or “research

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institute” of the provincial government. The fact that the panel was to have an academic advisory committee also contributed to speculations about a broader mandate. Regardless, as one provincial representative pointed out, “the whole idea never really got off the ground.” Further attempts to institutionalize these linkages collapsed with the election of Charest’s Liberal government. “The Liberals,” said the same official, “had no interest in pursuing this kind of framework.” Instead, “the government made it clear from the outset that it was going to rely on specialized think tanks and university groups for its non-governmental input.” Indeed, the province had commissioned several studies by 2003, which were completed by the University of Montreal. Though ongoing contacts continue to be made in line departments, especially in relation to issues such as the General Agreement on Trade in Services (GATS) and education, it is clear that the PQ’s model of consultation will not be re-established in the near future.28 Manitoba, Saskatchewan, and Alberta: Shifting Societal Pressures In Manitoba and Saskatchewan a considerable amount of non-governmental activity is related to agriculture, though the two provinces differ in terms of their reliance on this export sector. According to Brock, in the years following Confederation, Manitoba was generally perceived to be a smaller version of Ontario, in the sense that large numbers of English Protestant settlers were overwhelming existing French, Métis, and First Nations populations. Later waves of immigration brought German, East European, and Mennonite farmers to the province. This, and a mix of conservative and social democratic traditions, resulted in a population that was often critical of government policies. As a consequence of this activist tradition, there are currently a number of interest groups in the province, including the United Farmers of Manitoba, the Manitoba Farm Bureau, the Manitoba Federation of Labour, the Manitoba Government Employees Association, the Manitoba Teachers Society, the Manitoba Nurses Union, the Assembly of Manitoba Chiefs, and the Indigenous Women’s Collective. Access to government historically depends on which party is in power. Conservatives tend to favour agriculture, business, and Métis groups, while the NDP focuses on organized labour and other Aboriginal interests.29 For the most part, these generalizations appear not to hold when it comes to provincial foreign trade policy. In fact, members of the bureaucracy suggest that consultations in this policy area are as inclusive and broad as possible. “When it comes to issues such as agriculture,” said one representative, “there are obvious ties to line departments.” In matters more directly associated with foreign trade, consultation tends to be organized across a wide range of ministries. Also, engagement with societal actors is often linked to efforts at the federal level. Specifically, “when Ottawa comes to meet with people on trade issues ... the province usually has some input into who

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participates, and we always make sure the crowd is representative of divergent interests.” Having said that, provincial engagement with societal interests needs to be kept in perspective. The same official pointed out that “discussions have raised awareness and a better understanding between these groups but ... the actual impact on policy, especially from non-industry sources, is limited.”30 Saskatchewan, in contrast, is an agricultural economy that depends more heavily on commodity-based exports, especially wheat. In rural Saskatchewan, farming interests have long controlled most local societal groups, including those not based in agriculture. This has contributed to a form of provincial politics that is widely participatory and that is not driven by political leaders and elites. According to Ken Rasmussen, however, this “activity was more of a functional requirement of the wheat economy than some grand plan to create a small-scale democracy on the prairies based upon the anti-statist and cooperative traditions of the Co-operative Commonwealth Federation (CCF) and its Fabian intellectuals.”31 Rasmussen suggests that as small rural farms began to vanish, unable to compete with growing economies of scale in the agricultural sector, historic concepts of civic involvement began to change. Grassroots politics continued in Saskatchewan but was now more a reflection of “the new decentralized pluralism in urban areas.”32 In addition, increasing diversity in Saskatchewan’s cities encouraged the growth of a number of gender- and ethnic-based societal groups, which further challenged agriculture’s long dominance in the province. Saskatchewan’s engagement with societal actors on the issue of foreign trade policy reflects similar realities in Manitoba. In Saskatchewan, most contacts – especially with industry associations – are tied to specific line departments. This is also the case with “non-traditional” trade issues such as labour and the environment. Much like Manitoba, Saskatchewan attempts to partner with the federal government during its consultative exercises; also, it makes an effort to hear from a wide range of interests, including unions and academics. Saskatchewan is now considering an electronic consultation system, one that would be more inclusive and formalized than current practices. Regardless, limited bureaucratic resources restrict societal engagement in both Manitoba and Saskatchewan. As one trade official stated, “We have to be selective about provincial involvement given the extensive responsibilities of various departments.” He did concede, however, that a proposed legislative committee system could “change this relationship, especially if societal groups decide to bypass the bureaucracy and directly target members of the legislature.”33 In contrast to Saskatchewan and Manitoba, Alberta does not have a history of active civic engagement. David Laycock has noted that this is a legacy of the long tenure of Social Credit and its elite-driven decision-making processes, which limited citizen’s expectations of involvement to voting in

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elections.34 In the 1980s and 1990s, however, demands grew for more citizen engagement with government, reflected in opposition to projects such as the Oldman River dam in southern Alberta and proposed pulp mills in the northern part of the province. In Peter J. Smith’s opinion, this created a “more active notion of citizenship” as Albertans mobilized to protest government policies, especially during the “Klein revolution.” Unfortunately, massive Conservative cuts to public spending again altered society’s expectations of government. According to Smith, those cuts turned “citizens” into “consumers” who were satisfied as long as basic services were maintained. However, the perceived need for civic engagement began to increase as the Alberta government expanded its surplus and increased its spending on programs such as health care and education.35 For the most part, these trends are not reflected in consultations related to provincial foreign trade policy. As in other provinces, there are some contacts with line departments and the Ministry of International and Intergovernmental Relations (MIIR), but these tend to be dominated by industry. Labour interests, for example, have only a limited impact on policy. According to one senior bureaucrat, “We rarely hear from labour and when we do it tends to be reprints of liberalization and investment studies sponsored by the Council of Canadians.” In fact, “most of the material ... is forwarded to us by members of the legislature” because “labour seems to think it’s more effective to lobby MLAs than the actual people making policy.”36 At times, though, contacts with societal actors are encouraged, especially in relation to services. Earlier in the decade, MIIR made a point of holding information sessions on services with a wide range of interests, including teachers, labour leaders, and health care professionals. These meetings were not regularized; but three additional sessions were held over the following five years. Some provincial officials questioned the quality of input from some participants. Ultimately, “there would be correspondence following these meetings, but again, it was ... largely rhetoric.” This made it difficult to take “these arguments seriously.”37 Atlantic Canada: Limited Civic Participation New Brunswick is unique among the Atlantic provinces for its large francophone population. Historically, pressures from this group conflicted with strong British and Loyalist traditions, which often opposed linguistic equality and forced the provincial government to actively protect language rights. As Brock has pointed out, these underlying tensions created the foundations for social activism in the province, which, somewhat surprisingly, did not fully materialize. As in other provinces, most “societal” contacts with government, especially as they relate to trade issues, are with industry. In many cases these linkages also have direct ties to the Irving and McCain families, which have long controlled the region’s media. Having said that, other non-governmental

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groups have succeeded in generating public pressure in the past. This has been the case with the Federation of Labour, the School Trustees Association, the Teachers Association, and the Hospital Association and Medical Society, all of which are perceived as viable policy advocates. Prominent economic groups include the Forest Products Association, the Federation of Woodlot Owners, the National Farmers Union, and Hospitality New Brunswick.38 In New Brunswick, as in other provinces, most societal consultations related to trade policy involve line departments. New Brunswick also engages non-governmental interests as part of broader federal consultations. A senior bureaucrat made it clear that Trade Policy, despite its limited resources, has “never turned down an offer to talk to civil society or make a speech.” To prove the point, he noted that a member of Trade Policy “even talked to the Council of Canadians.”39 In other issue areas, however, New Brunswick has a more proactive approach to societal consultations. Another official suggested that the province is “well ahead of other Eastern provinces on consultative issues such as the environment.”40 Further civic contacts were made during the drafting of New Brunswick’s international strategy, Prospering in a Global Community. The same representative noted that though consultation has “always existed,” the Conservative government of Bernard Lord “used these efforts for a number of strategic purposes,” including gathering information, legitimizing policy, and delaying controversial decisions. Having said that, he did concede that these discussions “did not often deal directly with trade policy.” Though Nova Scotia has the most diversified economy in Atlantic Canada, non-governmental interests have had minimal impact on that province’s policy process. Indeed, for generations societal groups were considered irrelevant – the result of a party system that relied heavily on patronage.41 With regard to trade policy, most consultations occur as part of broader federal engagements. Officials in the Nova Scotia government provide Ottawa with a list of potential participants; one policy adviser pointed out that “we even invite the troublemakers.” Except for these efforts there is almost no contact. The same representative emphasized, however, that “if people want to find me they can,” though “nobody from the general community ever has.” When asked to explain why, he suggested that “trade policy is simply too complicated, and most people are not very conversant in these areas.” Echoing comments in other provinces, he noted that many of these groups “simply carry the message of Maude Barlow and the Council of Canadians and, frankly, for us, it’s rarely an informed opinion.”42 Prince Edward Island has a very different sense of political community, and this does much to explain the limited role of interest groups and civil society in that province. PEI’s small population and geographic isolation have fostered a political process that is more personal and that does not display the ideological divisions found in other provinces.43 Its economy

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has never been highly diversified; provincial business interests to this day focus on agriculture, fishing, and tourism. In recent years the impact of sectoral groups has also been limited due to internal divisions. The PEI Federation of Agriculture, for example, has seen its traditional influence weakened by the National Farmers Union, the PEI Potato Producers Association, and the Potato Dealers Association. Other emerging industry groups include the Tourism Industry Association, the PEI Federation of Labour, and the Public Service Association. So far, however, these groups have had very little engagement with PEI’s trade official. When the province appointed him, he made a point of asking several other provincial departments whether there were representatives from labour, the environment, First Nations, or civil society who wanted to engage in some form of dialogue. “I was told there was nobody. Trade policy is driven by commercial interests in PEI and from what I can see nobody is complaining.”44 Not surprisingly, societal groups in Newfoundland and Labrador are tied to the province’s resource-based economy, especially the Grand Bank fisheries, offshore oil, and hydroelectricity. In the past there were close ties between merchants and political elites; as these linkages have declined, numerous sectoral and labour associations have emerged, including the Fisheries Association, the Fishermen’s Protective Union (FPU), and the Newfoundland Fish, Food, and Allied Workers’ Union (NFFAWU). The NFFAWU has had considerable influence at the federal and provincial levels owing to its expertise in the fishing industry.45 More often, though, efforts to access government occur at the ministry level. In the words of one bureaucrat, most organized groups will “usually send a letter to the minister to arrange a meeting, and if there’s some relevance to international trade our department will be included.” Ultimately, in smaller provinces such as Newfoundland, “sectoral and societal groups representing a wide range of interests can potentially have an impact on trade policy.”46 British Columbia: Environment, Labour, and First Nations Interests Diverse societal interests have involved themselves in BC politics. More so than in other provinces. In fact, by the 1990s numerous non-governmental actors that had long been isolated from the policy process began to press for a larger role. The environment, for example, became a focal point of provincial activism following the collapse of the Social Credit Party in 1991. Under Mike Harcourt, the NDP embraced green issues, especially those involving the creation of public parks. This led to some tension within the provincial government given the NDP’s reliance on the support of organized labour, especially in the forestry sector. Owing to a shortage of lumber in the United States, however, prices and demand remained high for BC products, which made it easier for the NDP to endorse environmental initiatives while maintaining relatively stable levels of employment.47

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During this same period, a number of new environmental groups with considerable financial resources began to emerge. These included Americansponsored associations such as BC Wild, Ecotrust, and the Sierra Legal Defence Fund. The latter group launched a litigation campaign against the BC government that focused attention to environmental issues. Though that initiative had limited success, it did encourage other major international environment groups, including Greenpeace and the World Wildlife Fund, to begin questioning BC’s forestry practices. Because BC’s forestry laws made that sector extremely difficult to challenge in the courts, Greenpeace eventually chose to target international consumers of BC lumber rather than government policy. Specifically, Greenpeace began an aggressive advertising campaign that criticized the province’s harvesting practices with the goal of inspiring a consumer boycott. In the end, few contracts were cancelled, but as George Hoberg has suggested, the campaign still gave “BC forest companies and the province an economic interest in improving their environmental record.”48 Environmental issues have become less important in BC in recent years. The election of the Liberals represented a shift from the NDP’s relatively pro-environment platform. Also, environmental groups have suffered from reduced funding. For example, in the early 1990s the need to preserve the coastal rainforest drew the attention of several wealthy American foundations, such as the Pew Charitable Trusts; many of these endowments have since withdrawn their funding. Finally, political divisions within the BC environmental movement have weakened it as a whole. For example, organizations such as the David Suzuki Foundation and the Sierra Legal Defence Fund now focus mainly on scientific and legal arguments in an attempt to gain support; meanwhile, groups such as Greenpeace are more interested in publicly accessible messages, and other groups, such as the Forest Action Network and the Friends of Clayoquot Sound, pursue “extreme” methods such as tree spiking and vandalism against logging equipment.49 Another prominent societal interest in the BC forestry sector is its principal union, the Industrial, Wood, and Allied Workers (IWA). During the 1990s the NDP launched two major policy initiatives related to labour. First, during the early Harcourt years the province introduced Forest Renewal BC (FRBC) as part of its environmental agenda. FRBC was designed to compensate for job losses with various programs for retraining workers and assisting communities that were threatened with reductions of harvestable timber. The second initiative, the Jobs and Timber Accord, was a cornerstone of Glen Clark’s NDP government. Its ambitious goal was to create more than twenty thousand jobs in the forestry sector. When the Asian market for BC lumber collapsed in 1997, these initiatives were no longer economically viable. The loss of FRBC was especially difficult for labour as it had provided approximately $1.6 billion in assistance to workers over the previous five years. In

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contrast, the Jobs and Timber Accord was, according to one senior representative, a “spectacular failure.”50 Though the IWA and other labour interests vigorously opposed these changes, it was clear that the NDP simply did not have the resources to continue these programs. Under the current Liberal government, labour faces a number of new challenges. The rising Canadian dollar, the extended softwood lumber dispute, and economic realities related to overproduction have resulted in mill closings and job losses.51 All of this, came at a time when the IWA was trying to negotiate a new contract with industry. To further complicate matters, the IWA was also forced to deal with two different industry bargaining agencies, the coastal-based Forest Industrial Relations Association and the Interior Forest Relations Association. As early as 2003, IWA President Dave Haggard acknowledged that the sector was in crisis. “It doesn’t take a rocket scientist to see the problems out there,” he suggested.52 Forest companies eventually tabled a one-year extension of the existing contract; the offer was rejected by the coastal locals, which were hardest hit by the closures and therefore tended to be most militant. This was followed by a three-week job action by coastal workers that ended with the government passing the Coastal Forest Industry Dispute Settlement Act in December 2003. Needless to say, all of these developments restricted labour’s input into BC lumber policy. BC’s First Nations communities, however, have played a significant role in the forestry sector. In the past these groups were largely excluded from BC’s political process. That changed, however, once they began filing judicial claims involving large expanses of territory.53 These court challenges had direct implications for provincial lumber policy. One of the first claims involved Clayoquot Sound. In the early 1990s the old-growth forests on the west coast of Vancouver Island became the focus of wide protests over BC logging practices. Clayoquot Sound was traditional territory for the Nuuchah-nulth, and the courts eventually ruled that until land title issues were resolved, all non-First Nations logging would have to be halted. In 1993, to resolve this issue, the BC government created a steering committee. The following year the Scientific Panel for Sustainable Forest Practices in Clayoquot Sound was established, on which the Nuu-chah-nulth were given four seats. In 1995 the government accepted all of the panel’s land management recommendations. As well, in 1994 the Nuu-chah-nulth reached an Interim Agreement with the BC government whereby a Central Regional Board was formed to deal with all other forestry-related issues.54 The Nisga’a Treaty, signed in April 1998 and receiving Royal Assent in April 2000, was another example of government policy being shaped by First Nations. That agreement addressed a broad range of issues, including forest policy. Close to 45,000 hectares of forest land was transferred to the Nisga’a, along with an allowable annual cut of approximately 150,000 cubic metres. The treaty also gave the Nisga’a considerable authority over land

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management and the right to determine and collect fees, royalties, and other charges related to timber resources on Nisga’a land. Though the final agreement did place restrictions on the Nisga’a – most notably, forest management practices would have to meet or exceed provincial policy standards – the process and content of the treaty should not be underestimated. As Michael Howlett has pointed out, the case demonstrates that “under pressure from the courts, the provincial government ... moved to formulate a system of First-Nation-provincial forest co-management on Native lands.”55 In addition, the recent Liberal Forest Revitalization Plan included several provisions that addressed First Nations concerns; including calls for annual cut levels to be raised and for provincial timber revenues to be shared. Also, several companies have entered into joint ventures with Aboriginal groups regarding the management and harvesting of lumber-related projects. “These initiatives are not necessarily anything new,” says one provincial official, “but it does reflect a growing recognition between both industry and First Nations of some of the benefits of working together on these issues.” The same representative suggested that the current situation is “really a compromise between both parties to develop these harvestable lands.” Though it is impossible to know how the process will evolve, “this is where we are now and it is likely that more of these joint partnerships will emerge in the future.”56 One possible impediment to First Nations influence is a 2005 ruling by the Supreme Court of Canada on native logging rights. The Court ruled that Mi’kmaq people charged with violating logging regulations in Nova Scotia and New Brunswick did not have a historic claim to resources on provincially owned lands. Specifically, the Court ruled that any attempt to extend claims to these territories was subject to documented legal evidence proving physical occupation, beyond seasonal hunting or fishing, prior to the establishment of European colonial governments. The Court also found that “peace and friendship” treaties that were common between British officials and East Coast Aboriginal groups did not extend to any new claims, though oral tradition was to be respected. This ruling placed a heavy burden of proof on First Nations interests, especially in BC, where most claims are based on many of the same legal arguments as the Mi’kmaq case.57 Later that same month, however, the BC government announced a “new relationship” with provincial Aboriginal groups, pledging to increase the sharing of resources, revenues, and decision making with more than two hundred First Nations communities. The plan, to be phased in over ten years, was greeted with enthusiasm by business groups but with some skepticism by indigenous interests.58 Consultative efforts in the forestry sector are ongoing. The Ministry of Forests from time to time holds “summits” that bring together a wide range of actors, including corporate, labour, Aboriginal, and environmental interests.

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Thus in the fall of 2001 the minister met with almost three hundred members of the public and private sectors. In April 2002 the premier had a much smaller meeting with delegates from business sectors as well as selected municipalities and labour and environmental groups. The 2001 forum had been larger and had served more as an information update than an actual consultation. The 2002 meeting, however, took place after the expiry of the Softwood Lumber Agreement (SLA) and the imposition of US countervailing duties. According to one provincial official, the “mood of these [two] meetings were extremely different.” The “first one was extremely feisty with considerable dissent but the subsequent group was much more somber, essentially focusing on the fallout of the American decision.”59 Regardless, the same representative made it clear that the government had no plans to hold such meetings on a regular basis. He suggested that for the most part, future lobbying would likely continue in more “traditional” forums, such as the media, random public meetings, and direct discussions with forestry officials. “The bottom line,” he suggested, is that the “impact of civil society, even in this ministry, is very limited. Societal efforts might slow down the process but it rarely leads to any direct policy changes.” This conclusion is also evident in government contacts with other societal groups in BC. As already noted, non-governmental interests participated actively in the legislative committees studying NAFTA and the MAI as well as in Trade Policy’s 1999 Web-based initiative. Arguably, it was organized labour that had the most influence in terms of international trade, at least outside the forestry sector. It was labour, for example, that motivated BC to adopt its observer-only stance during the NAFTA negotiations. Labour’s impact was also evident in BC’s position on WTO and FTAA negotiations relating to labour standards and services – two issues highlighted in Trade Policy’s consultative efforts. Specifically, in November 1999, prior to the Seattle meetings, the BC government challenged Ottawa to push for the recognition of labour standards, as well as for a formal role for the International Labour Organization (ILO) in the WTO. At the core of BC’s concerns was the province’s inability to factor in labour exploitation when making subsidy determinations. BC’s labour minister, Joan Smallwood argued that this “isn’t just a question of worker rights. It’s a question of fair trade ... British Columbians and Canadians shouldn’t be at a competitive disadvantage because we recognize and enforce basic labour standards.”60 Yet a number of former NDP officials have suggested that labour’s influence is often overemphasized. “There’s no doubt,” said one senior representative, “that the NDP continues to have strong ties to the labour movement, which includes a formal role within the party.” But the same observer also made it clear that “labour did not drive government policy, especially on matters of international trade.” Indeed, labour “did not come to government with a list of concerns in which NAFTA and the MAI were specifically targeted

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and even if they did it would not dramatically [have] influence[d] the policy process.” He also noted that “NAFTA was often not even the most important international priority” for the Clark government, which had to contend with the Pacific Salmon dispute, jurisdictional issues regarding Nanoose Bay, and softwood lumber: “I don’t even remember the premier being briefed on the MAI and NAFTA. Softwood yes, but other international trade issues were often secondary and peripheral.”61 Societal interests, however, did appear to have some bearing on the province’s position on services, especially the GATS. Specifically, the NDP assigned Trade Policy the responsibility for organizing consultations with non-governmental interests on the GATS. Yet according to one senior policy adviser, “these meetings were more like seminars than actual consultations.” Their agendas were predetermined, and “they were handled more as information sessions than public forums.” Also, most groups that attended these meetings were “NGOs that tended to be anti-free trade in orientation.” It was clear, said the same official, that the NDP “was focusing on NGOs that shared their philosophy regarding international trade. They were trying to raise awareness within groups that were already sympathetic with their agenda in the hopes they would mobilize and rally public support against the GATS, NAFTA, or whatever.”62 Note, however, that not everyone in Trade Policy agreed with this assessment of societal consultation. One former bureaucrat suggested that the department “made a point of including speakers endorsing pro- and anti-free trade positions at all of these meetings.” He also stressed that there was “never any intention to mislead the public” and that “the only thing we were interested in was to create an open dialogue and debate.” For the most part, societal linkages “always reminded us that these were complex policy issues that touched non-governmental groups in a number of different ways.”63 Regardless, it is clear that the NDP represented a shift toward greater access for labour and other non-governmental interests. Though this did not always mean increased influence, the relevance of societal actors did increase under the NDP. Under the Campbell government this strategy has changed. As one representative noted, “the Liberals have gone back to the old approach. They ignore civil society.” As in other provinces, though, there is an acknowledgment within Trade Policy that these linkages could be productive. Resources, however, are lacking to the extent that any contact is “extremely selective.”64 Whither Civil Society? Opportunities and Challenges for Societal Actors The influence of societal actors on the provinces is somewhat debatable; that said, there is growing recognition in some provincial governments that further democratization is desirable. Part of this is due to Ottawa’s efforts to

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include civil society, in some capacity, in discussions about international trade. According to Robert Wolfe, there are several reasons for this increased activity. First, international trade issues have achieved a high profile, especially since the protests associated with the MAI and the (in)famous “Battle in Seattle.” Second, specific groups, such as the Council of Canadians, are expanding their memberships and enjoying increased financial contributions, which makes it easier to mobilize critics of liberalized trade. Third, budget cuts and bureaucratic restructuring have increased governments’ need for non-governmental expertise. Indeed, there is growing awareness that because of the intrusiveness of these agreements, negotiators require specialized information regarding domestic matters. This knowledge is not always available at either level of government.65 Yet at the same time, it is important to recognize that a number of barriers continue to prevent civil society from having a strong impact on Canadian and provincial foreign trade policy. One such barrier is consultation fatigue. In the same way that governments face limited resources, so do nongovernmental interests; most groups lack the capacity to engage in dialogue with different ministries at both levels of government. There is also the reality that “civil society” is not monolithic; groups vary in their interests. In BC, for example, organized labour, environmentalists, and Aboriginal groups have all actively engaged government on softwood lumber and have all enjoyed success at different times, notwithstanding their very different agendas.66 A third point is that foreign trade is an extremely complicated and technical issue that often exceeds the basic understanding of observers not directly involved in formulating policy. As a result, non-governmental groups may make demands for exclusions and exceptions that are not based on informed awareness of the basic principles of international trade negotiations.67 Related to this is Gerald Schmitz’s point that “idea driven normative endeavours” require “focused and sustained” political support “every step of the way.”68 Finally, Wolfe suggests that the events of 11 September shifted the Canadian trade agenda from completing the FTAA and Doha Round negotiations to addressing broader security concerns. As a result, “more players” became involved, which divided business and societal interests owing to fundamental differences related to policy priorities.69 Then there is the related problem of determining “influence.” If influence is the ability to initiate or alter policy preferences, there is little evidence that societal forces, especially non-business interests, have had a sustained impact. At times, non-governmental actors have seemed to influence change, especially in forestry, health, and education. But did these pressures alter existing provincial policy, or did they simply reflect government options already being considered? Consultation with First Nations has become a reality in the forestry sector, but has this been a result of Aboriginal groups’ demands, or is it linked instead to domestic judicial factors and market

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realities? Provincial exclusions in GATS related to health and education have been consistent with demands by groups such as the Council of Canadians, but are these exclusions related to societal pressures or to issues of provincial autonomy? This chapter suggests that at present, provincial engagement with non-governmental interests is selective at best. Indeed, during previous NAFTA and WTO negotiations most provinces did minimal consulting, with the possible exception of BC. This, and a lack of direct evidence pointing to societal forces changing policy at either level of government, suggests that those forces have had little influence in matters of provincial foreign trade policy. Non-governmental interests do not alter trade policy if these actors merely reinforce existing international or domestic pressures. All of this draws attention to important normative considerations related to transparency, access, and legitimacy. There is little question that provinces are selective about access unless some degree of self-interest is involved. It is also clear that societal factors are not always organized and able to challenge existing provincial policy agendas. Wolfe has made a critical distinction between “input” and “output” legitimacy. In his view, “input” to the policy process, especially in terms of transparency, should be prioritized.70 As already noted, it is debatable whether either level of government has done this. The argument could also be made that when legitimacy is limited to “inputs,” the result is not truly representative of the potential relevance of these actors. The central thesis of this book is that outcomes need to be evaluated in addition to process factors. Yet it is important to remember that Canada’s foreign policy process is among the most transparent compared to other Western democracies. There is evidence in this country of both marginalization and co-optation; that said, most other states do little if anything to include civil society at any point.71 Even so, provincial governments could place a higher priority on input from societal interests, who have much to contribute and whose input can do so much to legitimize the process. Conclusion Societal factors have a limited impact on provincial foreign trade policy. In addition, the provinces vary in their approaches to non-governmental interests based on history, sectoral priorities, and bureaucratic resources. In Ontario, linkages tend to be driven by business, though First Nations groups have established a role in the forestry sector. At one time, Quebec attempted to launch formal consultative frameworks; the Liberals have since returned that province to a more elite-driven process. Alberta faces negligible demands from societal actors and continues to focus on industry’s raised concerns. In BC, the NDP improved popular access to the trade file during the 1990s; since then, the role of labour and environmental groups has diminished considerably.

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In general terms, however, government-societal relations in trade policy share certain characteristics. Contact is often ad hoc, reactive rather than proactive, and directed at specific line departments. Most consultations within provinces (especially the smaller provinces) are conducted simultaneously with federal initiatives. In any event, provincial officials often question the utility of public input, since trade policy is such a complicated issue and societal groups tend to rely on rhetoric to support specific arguments. Societal groups further contribute to their own marginalization when they fail to approach relevant provincial officials; also, they typically lack resources and are prone to consultation fatigue. A last point is that “influence” is often difficult to determine in situations where non-governmental priorities are similar to those a province already embraces. Overall, then, societal factors do not contribute significantly to the foreign trade policies of Canadian provinces or to the evolution of international norms and standards.

8 Dominant Ideas, Ideology, and Intrusive Neoliberalism

International and domestic dominant ideas are a key component of provincial political culture. Earlier chapters outlined important subfederal ideas related to regional political economies, prioritized sectoral interests, and concepts of participatory democracy. This chapter focuses on the implications of dominant ideologies as they relate to foreign trade policy in British Columbia, Alberta, Ontario, and Quebec. In BC, Social Credit and Liberal governments have generally pursued policies that are consistent with market liberalization. The New Democratic Party (NDP) long questioned that approach; by the 1990s, however, it had adopted a pro-growth platform, a result of international market pressures and the development of a post-staples, service-based economy. Alberta governments have traditionally embraced neoliberal principles even though this has exposed the province’s export sectors, such as agriculture and energy, to market fluctuations. In Ontario over the past two decades, all three parties – Liberal, NDP, and Conservative – have shifted to the right in response to external pressures. Meanwhile, domestic issues have heightened ideological tensions within the province, especially since the collapse of the Conservatives’ brokerage-based politics. Quebec has approached foreign trade mainly in the context of its pursuit of domestic autonomy within the Canadian federation. The result has been a significant restructuring of provincial Crown enterprises and somewhat ambiguous positions toward foreign (mainly American) investment and international trade. Regardless, it is clear that in order for dominant ideas to shape outcomes, and not simply be another aspect of the policy process, they require sponsorship by elites within provincial institutions. This chapter will suggest that institutional support for liberalized trade has not come at the expense of provincial autonomy. Dominant Ideas, Interests, and Ideology Before exploring dominant ideas in relation to provincial foreign trade policy, it is important first to define ideas, interests, and ideologies as basic concepts

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of analysis. Dominant ideas are not static; they change over time. Also, most ideas require advocates within various institutions to maintain and promote them.1 Moreover, it is important to clarify the relationship between ideas and interests. Interests can be either material or ideational. Material interests focus on the identifiable characteristics of ideas, treating them primarily as secondary variables. This means that ideas provide causal explanations that cannot at first be linked to power, states, or institutions. Ideational interests, for their part, reserve a more prominent role for ideas. The assumption here is that all material interests are comprised of ideas. It follows that ideas are primary rather than secondary variables.2 By contrast, modern-day definitions of ideology are based on a perceived need for change. Ideologies are also derived from the works of political theorists, which are then simplified for citizens to generate mass support. Obviously, there is a clear role for both interests and ideas in the study of ideology.3 To understand these concepts in the context of international relations theory, it is necessary to distinguish between rationalist and non-rationalist approaches. Traditional and structural realism, for example, emphasizes “interests,” but these concepts are narrowly defined in terms of a state’s national or self-interest.4 Liberal frameworks, on the other hand, focus on how elites utilize ideas and interests in order to pursue objectives within existing institutions.5 Non-rationalist approaches, for their part, acknowledge that ideas are important but that so are social effects such as culture and identity.6 Critical theory considers existing power relations and emphasizes social structures rather than power and state sovereignty.7 Feminist theory is diverse: liberal models examine equality issues, while Marxists highlight gender-based class differences.8 Postmodernists, by contrast, challenge all social constructs of knowledge and suggest that ideas are key elements of power.9 Finally, social constructivists question the inevitability of international anarchy and the self-interest of states, arguing that ideas and interests are created through interaction and learning.10 In comparison, the public policy literature has limited analysis of ideas, interests, and ideologies. Pluralist models consider a number of key variables, including ethnicity, language, class, and gender but any discussion of ideas and ideologies tends to focus on the relevance of business interests.11 Models of public choice assume that individual actors operate on the basis of rational self-interest.12 Marxist or class-based theories, by contrast, posit that the ideology of capitalism has become so prevalent that in most contemporary modern states, policy options are designed to benefit a narrow range of elites.13 Studies of Canadian foreign policy tend to emphasize liberal and pluralist approaches. Kim Nossal, for example, has questioned models of rational choice and highlighted the “games of compromise” that develop when bureaucratic differences are being settled.14 More recently, Nelson Michaud

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has re-examined Graham Allison’s bureaucratic politics model and suggested a modified framework for better understanding the 1987 Canadian White Paper on Defence.15 Brian Tomlin has noted that “policy windows” provide opportunities for interests in the Department of Foreign Affairs and International Trade (DFAIT).16 Some scholars lament the absence of ideas in the formulation of Canadian foreign policy. Denis Stairs, for example, has criticized academics and practitioners for their “genuine shortage of ideas” as well as their reliance on traditional theories and organizational frameworks.17 Deborah Stienstra, Claire Turenne Sjolander, Edna Keeble, and Heather Smith have all suggested that an absence of gender-based considerations has perpetuated and reinforced a “type of (masculinist) thinking.”18 Despite the murkiness that inevitably develops when different streams of literature are drawn together, it is possible to isolate some conclusions regarding ideas, interests, and ideologies. Studies of public policy tend to be rationalist and dominated by state and institutional considerations. Such frameworks include ideas and interests, and to a lesser extent ideology, but they do so in a deterministic manner that marginalizes their importance. Studies in international relations and Canadian foreign policy do a better job of engaging these variables from both rationalist and non-rationalist perspectives, but they also fail to provide an adequate foundation for better understanding provincial foreign trade policy. This chapter attempts to overcome these problems by adopting Neil Bradford’s “dominant ideas” framework. This approach accepts that dominant ideas contribute to political culture and ideological traditions at the subfederal level.19 Bradford also makes it clear, however, that these dominant ideas require elite institutional support. In matters of foreign trade policy, the provinces differ sharply regarding regional economies, sectoral priorities, and attitudes toward participatory democracy. However, it is also apparent that “normative” ideas are largely absent from this debate. Though authors like Nossal are somewhat dismissive of these factors, issues of transparency and access do have important ramifications for the legitimization of policy.20 British Columbia Dominant ideas in BC can be traced back to the nineteenth century, when the province’s non-indigenous population consisted mainly of British immigrants. Though these arrivals imported strong classical liberal and democratic socialist traditions, ideological divisions were basically absent from the province’s post-Confederation politics.21 BC’s labour movement began to organize as early as the turn of the century, especially in resource-based industries; however, political debate focused on the Terms of Union and practical issues associated with the province’s geographical distance from Great Britain and the federal government. As Donald Blake has noted, the differences that did arise “tended to parallel divisions of interest within the

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business class: Vancouver Island versus the mainland and (on the question of the routing of the transcontinental railway) interior and Island versus the Lower Mainland.”22 Given the homogeneity of the population, issues of ethnicity and religion were largely absent from provincial politics. Racism against non-white British Columbians was a reality, but this did not become part of the ideological agenda.23 Though BC established a two-party system in 1903, there were minimal differences between the two provincial parties at the turn of the century. Only during the Great Depression did the political process begin to reflect ideological divisions. The Co-operative Commonwealth Federation (CCF) enjoyed early electoral success, but the Liberals under Premier “Duff” Pattullo formed majority governments in 1933 and 1937. In the 1940s the Liberals and Conservatives shared control of the province, with the CCF continuing to draw attention to social issues.24 In the 1952 election the BC Social Credit League won the largest number of seats and formed a government under W.A.C. Bennett, who was selected leader of the party following a successful campaign. Over the next two decades, the subsequent Social Credit Party united Liberals and Conservatives and became the electoral alternative to the CCF.25 Though Social Credit won five majority governments between 1953 and 1972, it was clear that the province’s political culture was in transition. Demographic changes were under way, linked to an influx of new arrivals from both overseas and other parts of Canada. Most of these people settled in the urban areas of the Lower Mainland and had no links to the province’s political traditions. Union membership also increased with the addition of new white-collar professions. Meanwhile, Kamloops and Kelowna emerged as important regional centres, challenging the long-time dominance of Vancouver (and to a lesser extent Victoria and Vancouver Island). All of these factors contributed to the defeat of Social Credit in 1972 by the NDP (which had replaced the CCF) under the leadership of Dave Barrett.26 BC’s political economy had changed greatly since the depths of the Depression. After the Second World War the province began to build capacity in secondary industries, such as pulp and paper and aluminium. As BC developed into a welfare state, demands for social services grew. By the 1950s the provincial economy was attracting large multinational corporations such as Crown-Zellerbach, Alcan, and Kaiser. It was during this period that the government began emphasizing infrastructure: roads, bridges, schools, universities, and hospitals. In addition, Socred governments aggressively funded railway expansion and offered tax cuts, low stumpage fees, and subsidized hydroelectricity for the province’s larger resource companies. By the 1970s these developments had drastically changed the provincial workforce. An emphasis on employment in multinational resource firms remained, but funding for education and hospitals was contributing to significant

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growth in the province’s public sector. As noted earlier, this helped elect the NDP.27 Yet the NDP’s success did not represent a significant shift in BC’s ideological traditions. Social Credit, now led by Bill Bennett, who had succeeded his father, defeated the Barrett government in 1975. Bennett took the party sharply to the right after his third electoral victory in 1983.28 The NDP experienced its own internal tensions during this period, which became glaring after Barrett resigned as leader in 1984. The party leadership contest that ensued brought to a head divisions between the party’s old trade union base and its new urban middle-class members. Bob Skelly, the “traditionalist” choice, became the new leader but was forced to resign only two years later after a disappointing election campaign. Mike Harcourt replaced Skelly in 1987, and his selection represented a shift toward the new wing of the party. Harcourt prioritized issues such as the environment and the economy and attempted to distance the NDP from its socialist roots. In 1986 the Socreds also elected a new leader, Bill Vander Zalm. After a controversial tenure, he was replaced in 1991. The subsequent election began a chain of events that altered the province’s ideological landscape. The NDP formed a new government, but the re-emergence of the provincial Liberal Party under Gordon Wilson represented a challenge to the province’s polarized two-party system. Meanwhile, Social Credit had fallen into disarray, with most of its members joining the provincial Reform Party.29 In later years, support for the NDP began to decline largely as a result of the Nanaimo Commonwealth Holding Society scandal and the resignation of Harcourt. In the divisive leadership campaign that followed, the selection of Glen Clark exposed further rifts within the NDP, a result of Clark’s perceived ties to “old labour” and “class politics.” By the end of the 1990s, however, BC Reform had collapsed, and Glen Clark, Harcourt’s replacement, had departed politics following various controversies over fast ferries and casino licences. In 2001, the Liberals were elected with an unprecedented mandate. They formed another majority in May 2005, though the NDP succeeded in electing more than thirty new members. By the 1980s, BC had developed a “post-staples” political economy. Its exports remained resource-based, with an emphasis on lumber and energy, but its service sector was expanding strongly. According to Michael Howlett and Keith Brownsey, this drove several changes to BC’s employment profile. First, government spending for public-sector services (and employees) increased greatly. Second, resource companies became increasingly specialized, relying on contracting firms for financial, transportation, and environmental services. This growth in small business was also evident in the development of a personal services sector responsible for activities such as cleaning, day care, and food preparation. It also confronted British Columbians with the realities of competitive markets, which can lead to low wages and unstable

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employment.30 These developments placed pressure on the NDP governments of Harcourt and Clark to move to the right and adopt pro-growth economic strategies. Yet none of this prevented the party from opposing the North American Free Trade Agreement (NAFTA) (see Chapter 4). The current Liberal government formed the BC Progress Board to examine the province’s changing political economy. This board, comprising around twenty “eminent” advisers from numerous backgrounds, was assigned the mandate of advising the premier on measures to improve BC’s economic competitiveness. One of the board’s concerns was growing income and employment disparities between the Lower Mainland and other regions; generally, the latter were dependent on declining forestry, fishery, and mining sectors. The board recommended an increase in government spending in these regions to reduce hardships related to “boom and bust” economic cycles. The board also suggested increased consultation with local interests, including First Nations communities. In response, in 2003 the Liberals produced the Heartlands Economic Strategy, which rejected most of the board’s proposals. Instead the Liberals planned to create a more competitive business environment based on tax relief and deregulation for the forestry, energy, transportation, agriculture, tourism, and new-technology sectors. This reinforced the Liberals’ commitment to market-based liberalism. The failure to adopt the board’s recommendations highlights the need for elite institutional sponsorship for dominant ideas.31 Alberta For decades, Alberta’s ideological tradition was defined by the province’s economic role in Canadian federalism. C.B. Macpherson noted that Alberta did not become a province until 1905 and that it only gained control of its natural resources in 1930. As a result, Alberta acquired an almost “quasicolonial” status, the result of which was two dominant classes: the elites, who controlled Alberta’s relations with federal and global bankers, investors, and railway owners; and all other Albertans, who were subordinated by these relationships. Alberta’s economy, then, was dominated by small, independent commodity producers (mainly farmers) who were both unable and unwilling to challenge elite authority. This guaranteed limited public access to the policy process.32 Nelson Wiseman has suggested that ideology in Alberta was shaped by several waves of settlement. The first to arrive were settlers from Ontario and Great Britain, who embraced a form of agrarian populism. Later, northward migration brought American liberal populist beliefs, which were often critical of parliamentary democracy.33 These dominant ideas were reflected in Alberta’s emerging political parties. The United Farmers of Alberta (UFA) were strongly influenced by American agrarian monetary theories, which called for “the free coinage of silver” and “an inflation of the money supply.”

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A split within the UFA between American interests and labour-based socialist elements ended the party’s dominance in Alberta. Initially, Social Credit targeted a narrow range of banking practices, which it believed were responsible for the Great Depression.34 When provincial legislation to address these practices was struck down by the Supreme Court of Canada, Social Credit slowly drifted to the right until by the 1940s it had become a more traditional conservative party promoting free enterprise and condemning socialism.35 Based on its relationship with business, Social Credit was able to maintain power until the 1970s. The discovery of oil near Leduc in 1947 contributed to emerging ideological traditions in Alberta. Part of Social Credit’s strategy was to invite US oil companies into the province and provide economic conditions that would allow them to make significant profits. The royalties from these profits were then paid to the government, which used the money to build the province’s infrastructure without raising taxes. By 1963, foreign multinationals controlled 62 percent of Canada’s oil and natural gas industries, most of which were located in Alberta. The development of this sector led to significant demographic and economic changes. The middle class began to grow, migration increased settlement in urban areas, and the service economy expanded rapidly. This shifting population base began to distance itself from the “old, tired, and rural-biased” nature of Social Credit.36 In 1971 the Social Credit dynasty came to an end when the Progressive Conservative party won 49 seats with 46.4 percent of the popular vote. Unlike its predecessors, the new government, led by Peter Lougheed, was more willing to intervene in the economy to achieve policy objectives. The oiland-gas industry was booming, and Lougheed applied the resulting revenues to economic development, creating a number of new government departments and agencies. The Conservatives also established a number of loan, grant, and subsidy programs for small business, municipalities, and farms. Lougheed’s goal was to reduce the province’s reliance on investment and financial assistance from Ottawa and Eastern Canada.37 Also like Social Credit, the Conservatives emphasized infrastructure – roads, airports, irrigation projects, communications, and so on. This program secured the PCs even larger majorities in the 1975 and 1979 election campaigns.38 Provincial economic conditions began to change as Alberta entered the 1980s. The collapse of the oil-and-gas industry resulted in a supply glut that cut deeply into provincial revenues. It also contributed to a long-term battle with the federal government over the National Energy Program. In response, the Conservatives increased provincial expenditures, this time by close to 25 percent; to do so, however, it was forced to access the Alberta Heritage Savings Trust Fund (AHST), established in 1976. Farmers, small business, and the oil-and-gas industry also received help in the form of tax breaks and grants. Despite these problems, voters in Alberta re-elected the Conservatives

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in November 1982 with over 60 percent of the vote. Lougheed, however, resigned in 1985. His replacement, Don Getty, faced similar problems with the economy. Oil-and-gas prices started to recover in 1984-85 but began to plummet again in April 1986. Prices for agricultural commodities, especially grain, also began to fall around this time.39 Recognizing the need to diversify Alberta’s economy, Getty adopted a traditional Conservative strategy. In an effort to “create” a pulp-and-paper industry in northern Alberta, the provincial government spent close to $1.3 billion building roads, bridges, and other infrastructure. Borrowing from earlier Socred strategies, Getty also provided attractive soft loans and grants to American and Japanese forestry multinationals.40 To generate revenue, Getty reduced the size of the public sector, increased personal income taxes (but not business taxes), and raised the costs of health care and other government services. As an electoral strategy, Getty targeted rural voters in southern Alberta as well as lower- and middle-class Albertans, many of whom lived in Edmonton. As a result, there was a dramatic increase in farm and small-business soft and guaranteed loans between 1986 and 1990. Within three years, however, support for the Conservatives had dropped to an alltime low. Soon after, in December 1992, Ralph Klein became the new party leader and premier.41 Klein immediately reduced the size of cabinet and targeted the provincial deficit. Seeking legitimacy for his proposed cuts, he appointed an independent financial review commission, consisting largely of lawyers and business people sympathetic to Klein’s interests. Not surprisingly, the commission supported drastic cuts in government expenditures. This was reinforced in the 1994 budget, in which the premier reduced funding for education, health, and social services. In one especially transparent and highly controversial move, Klein offered welfare recipients one-way bus tickets to BC as an incentive to leave the province. Once again, public-sector employees – from government workers to nurses, clerks, and cleaners – were targeted for dismissal.42 In February 1997 the Conservatives called an election based on a $3 billion provincial surplus. The party won 63 seats. Subsequent provincial elections have reinforced these trends. Ed Stelmach, another Conservative, replaced Klein as premier in 2007. Ontario Dominant ideas in Ontario are also tied to ideology. According to Wiseman, the province’s “conservative-liberal” ideological foundation was promonarchist, supported strong ties between church and state, and was dismissive of “radical” American liberalism.43 At the turn of the century, however, new British immigrants brought with them reform labour-socialist principles that were popular in Britain at the time. These influences contributed to the development of an expanding union movement in Ontario

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during the 1920s and 1930s, decades during which the CCF was establishing itself as a credible national party. The result was an increasingly divided political system in Ontario until the Second World War, when a centralized wartime economy developed. After the war, the full-scale adoption of Keynesian economic principles led to a polarized party system in Ontario, with the Conservative and Liberal parties moving closer together on the right and the CCF (later the NDP) remaining on the left. For the most part, these political realities remained in place for the duration of the Cold War.44 Much like BC and Alberta, Ontario was dominated by one-party rule for the next three decades. From 1945 to 1971 the province was controlled by the Progressive Conservative party, which won eight consecutive majority governments. This Conservative dominance is even more impressive considering its role in minority governments in 1943, 1975, and 1977 and a final majority government in 1981. The Conservatives were able to succeed for so long because they learned how to broker interests as the province shifted from an agricultural society based on strong Anglo-Celtic influences to an urban, industrialized, multiracial society. Similar changes were taking place in other provinces, but as Wiseman has suggested, politics in BC, Alberta, and Saskatchewan represented a “more advanced state of ideological fermentation and class politics.” Specifically, the Conservatives in Ontario succeeded by “converting governance to bureaucratic management” and by depoliticizing politics “by shunning ideological choices and confrontations.”45 Conservative dominance began to fade with the election of a Liberal minority government in 1985. The Liberals were able to govern by guaranteeing a two-year coalition with the NDP. During this period, programs were launched for health and dental care, tax breaks, day care, education, the environment, and low-interest loans for farmers. Liberal success was based in part on the impression that the party was immune to class bias. According to Rodney Haddow and Thomas Klassen, Ontario remained a predominantly liberal market economy, but the new coalition was perceived to “have softened somewhat the competitive edges of Ontario’s business- and marketoriented production regime.”46 The Liberals’ subsequent majority government, elected in 1987, found itself linked to a number of controversies involving political fundraising and land development. The Liberal government was also criticized for raising personal, payroll, sales, and income taxes, for its position on the Meech Lake Accord, and for the proposed Canada-US Free Trade Agreement (FTA).47 When the NDP under Bob Rae defeated the Liberals in September 1990, the new government was faced with a deficit of $2 billion and a deepening recession. In response, the NDP’s first budget adopted a classical Keynesian approach by increasing spending. As part of this program, the NDP also attempted to legislate change on rent controls, ban the use of replacement workers, and raise the minimum wage. These policies had only a minimal

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impact on the provincial economy, and by 1993 the NDP had reversed course with its Social Contract, which included spending cuts and rollbacks on previously negotiated public-sector contracts.48 Not surprisingly, unions and employees in the public sector viewed these moves as a betrayal of NDP commitments, which eroded support among the party’s traditional base. The NDP faced further criticism for reversing its commitments on public auto insurance, Sunday shopping, and casino gambling.49 Rae’s government lost the 1995 provincial election. The election of Mike Harris’ Conservatives represented a clear shift to the right, one that Wiseman has labelled “decidedly ideological.”50 The cornerstone of the new Conservative platform was the Common Sense Revolution, which called for reduced income and business taxes, cuts to social assistance, support for workfare, a balanced budget, and smaller government. This market-oriented approach was designed to attract voters who were disenchanted with the province’s economic performance during previous Liberal and NDP regimes. Based on support from business, rural and suburban communities, and the middle class, the Conservatives were re-elected in 1999. Ernie Eves, who replaced Harris as leader, also adopted these strategies. As Haddow and Klassen make clear, the Conservatives introduced Ontario to a style of partisan politics unprecedented in provincial history. It also “allowed for a clear differentiation between the agendas of left-and right-wing parties in power.”51 For the most part, these dominant ideas continue to influence the current Liberal government of Dalton McGuinty. Quebec As in other provinces, dominant ideas in Quebec are shaped by historic social tensions. Before Confederation these divisions were characterized by shifting relations between the British and the Roman Catholic Church.52 The British North America Act (BNA) Act reinforced the existing social hierarchy in Quebec by granting provinces the right to control cultural priorities such as education and marriage. Principal authority over economic matters, however, remained with the federal government. According to Reg Whitaker, the BNA Act ultimately reinforced the century-old bargain between English and French elites. Specifically, “economic development was left to the English capitalists,” while the Church was left responsible for promoting “a safe inwardlooking cultural nationalism that left the structures of English economic and administrative power untouched.” It also created a long-standing distrust of the state among “the Quebec masses.”53 These realities basically defined Quebec’s state-societal relations until the 1930s. During that decade, a strong backlash to capitalism developed in the form of l’Action Nationale, which called for bilingualism and a “back to the land” movement. Inspiration for this agenda came from the Jesuits of l’École Sociale Populaire, who denounced the “economic dictatorship”

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of postwar Quebec and promoted corporatism and limits to immigration. Reflecting developments in Europe, comparisons were made between l’Action Nationale and Fascist parties in Italy and Germany. Accusations were also levelled that the province’s Catholic Church supported these principles. The province’s 1949 Asbestos Strike, crushed by Maurice Duplessis and the governing Union Nationale, only reinforced these perceptions.54 In 1960 the new leader of the Liberal Party, Jean Lesage, became premier. Lesage inherited a provincial government that was reluctant to intervene in the economy. Indeed, in 1959 Hydro-Québec was an extremely small company only capable of distributing power in the area surrounding Montreal. The former Duplessis government had looked to foreign-owned corporations, usually American, to serve as catalysts for job creation and manufacturing growth. Lesage wanted to reduce US investment, especially in the province’s natural-resource sectors. The Liberals’ 1962 proposal to nationalize energy reflected this priority. The Quebec government, however, made only limited efforts to control the energy sector. In fact, it allowed the production of hydroelectricity for industrial purposes to remain in private hands. This meant that foreigncontrolled monopolies such as Alcan continued to manage their own hydroelectric dams.55 Other observers contended that there was no comprehensive strategy for the government’s expanding role in the economy. The charter of the Caisse de Dépôt et Placement, the province’s pension fund manager, for example, failed to outline any long-term objectives.56 Notwithstanding these criticisms, the province continued to create a number of new state corporations during these years. These included the Société Québécoise d’Exploration Minière (Soquem), the Société Québécoise d’Initiatives Pétrolières (Soquip), and the Société de Récupération d’Exploration et de Développement Forestiers du Québec (Rexfor). The Liberal government of Robert Bourassa, elected in 1970, represented a shift in organizational culture for the province’s state enterprises. The early ad hoc approach was replaced with clearer mandates and tighter administrative procedures. The provincial government also published the Vézina Report in 1974, which stressed the need for state corporations to make a profit. Another economic priority for Bourassa was foreign investment. In contrast to Lesage, Bourassa encouraged foreign investment, arguing that it would provide greater autonomy for Quebec within Canadian federalism. Not surprisingly, Bourassa openly questioned Ottawa’s efforts to limit foreign investment through the Foreign Investment Review Agency (FIRA). The election of the Parti Québécois (PQ ) represented another shift in economic priorities. In 1979 and 1982 the PQ published policy statements outlining the need for domestic investment, especially in technology. The government promoted similar industrial strategies in the natural-resource and hydroelectricity sectors. Yet the PQ did not abandon foreign investment.

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Instead, it changed the goal of such investment, which now was to integrate foreign-owned companies with provincial interests. The PQ also emphasized trade linkages with the United States; this included supporting the FTA. However, the PQ’s commitment to liberalization was not absolute: the government sought greater autonomy over manpower, education, and professional development programs while at the same time allowing Ottawa to jointly sponsor “transition” employment measures. Quebec also called for “special consideration” for volatile sectors such as textiles, agriculture, and clothing.57 The Quebec Liberals had opposed the FTA while in opposition; but on returning to power in 1985, they re-evaluated their position. The province was recovering from a recession, and Bourassa emphasized the economic potential of sectoral free trade. His government supported NAFTA and the Agreement on Internal Trade (AIT) for similar reasons. Economic conditions in the province, however, resulted in different attitudes toward state corporations. Though most of these, except for Sidérurgie Québécoise (Sidbec), were performing acceptably well, the dominant ideas that sparked the creation of state corporations appeared to have lost sponsorship within the Quebec government by the 1990s.58 Somewhat surprisingly, however, the Liberals eventually limited privatization efforts to Sidbec and other minor assets of state corporations. The PQ, as well, failed to launch significant privatization during the 1990s, though it did reorganize state corporations to promote their international competitiveness. “Size matters” with international economies of scale; thus the PQ merged Soquem, Soquip, and Rexfor into one large company. At the same time, Hydro-Québec expanded its responsibilities beyond electricity generation and distribution to include brokerage operations, which increased profitability. Perhaps most important, a number of state enterprises began pursuing international operations. Loto-Québec established a role in China through one of its subsidiaries, and Hydro-Québec succeeded in negotiating contracts in Peru, Australia, and the United States.59 As noted in Chapter 4, the Liberal government of Jean Charest has not changed the PQ’s economic policies to any significant degree. Dominant Ideas and Provincial Trade Policy: Evaluating Intrusive Neoliberalism Based on the above discussion, it is clear that dominant ideas related to ideology have an impact on provincial foreign trade policy. In Alberta, domestic support for non-interventionist economic policy dates back to the turn of the century. The anti-socialist policies of the UFA were consistent with subsequent Social Credit governments, and though the Conservatives were more interventionist, Klein consistently promoted market liberalization. As a consequence, Alberta has supported efforts to liberalize international trade

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policy, though it continues to defend key sectoral priorities. BC has a much less cohesive ideological tradition. Initially the province was relatively apolitical, but the CCF promoted the idea of expanded economic intervention. Subsequent Social Credit dominance, however, created support for liberalized trade. Though there was opposition to NAFTA within the Harcourt and Clark governments, the NDP also pursued a pro-growth economic strategy. Gordon Campbell’s Liberals have adopted market-driven policies on a more transparent basis, but not at the expense of key export sectors such as softwood lumber. Ontario, too, had a history of one-party dominance until the Liberals were elected with a majority government in 1987. The subsequent NDP government faced internal opposition to NAFTA, and Rae was not consistent in his support of ongoing General Agreement on Tariffs and Trade (GATT) negotiations. The Conservative and Liberal governments that followed embraced principles of liberalization. Finally, dominant ideas in Quebec prior to the Quiet Revolution endorsed a limited economic role for the state and supported American investment in resource-based industries. Lesage and the Liberals then changed these trends. Over the next four decades the PQ and the Liberals would focus on state agencies, foreign investment, and other economic ties that promoted provincial autonomy vis-à-vis Ottawa. It is important to caution that domestic ideas related to ideology are not the sole determinants of provincial trade policy. It is apparent, for example, that dominant international ideas are also relevant. Most observers accept that significant changes occurred in the international political economy during the 1970s. It was at this point that the United States implemented its New Economic Policy, which included a 10 percent surcharge on imports, domestic wage and price controls, and the removal of the US dollar from the gold standard. Though this did not destroy the Bretton Woods system, it did represent the abandonment of liberal Keynesian principles that had dominated economic planning since the 1930s. In its place, economists and government officials began advocating market-oriented models, which generally included the liberalization of international trade, the deregulation of financial markets, and the privatization of state-run companies. These developments had a strong impact on dominant ideas at the international level. As John Ruggie has noted, this challenge to Bretton Woods marked the end of “embedded liberalism,” which was associated with Keynesian economics; it also ushered in strategies endorsed by neoliberal economists.60 There is evidence that the provinces were influenced by the increasing intrusiveness of neoliberalism. These pressures resulted in trade policies reflecting international developments, albeit not at the expense of already existing ideological traditions. In BC this was evident with the rapid growth of the province’s service sector. By 1991, for example, 79 percent of employment in the Lower Mainland was services-based. These changes were tied to

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growth in the public sector and the commercialization of personal services, but they also reflected dramatic job losses in labour-intensive industries as a result of improvements in technology and intensified foreign competition. In response, the provincial government turned to “British and Americanstyle neo-conservative or new-liberal thought” models as inspiration for restructuring the provincial economy. But in other areas, such as softwood lumber, the province continued to support interventionist economic policies. These inconsistencies were also evident with the NDP’s opposition to NAFTA and its market-based export strategies. According to Howlett and Brownsey, BC’s experience demonstrates that “international and domestic provincial political economies are inextricably linked and mutually reinforcing.”61 The impact of neoliberalism was also evident in Alberta, especially by the time Klein came to power. Alberta’s economy had always relied on staples as its primary exports – most notably oil, wheat, and natural gas. During the 1980s, however, the province experienced an economic downturn as a result of the collapse of international oil prices. This was followed by reduced market demand for grain, as well as another decrease in sales of oil and natural gas. In an attempt to adapt to these changes, the provincial government shifted its focus to maximizing growth in exports, reducing spending, and limiting economic regulation.62 While this created tensions in Albertan society – usually between rural and urban interests – there was minimal conflict within the provincial bureaucracy, which readily endorsed these neoliberal market principles. In this way Alberta’s interests were consistent with historic dominant ideas already embedded in the province’s political culture. The relevance of neoliberalism is also evident in Ontario’s foreign trade policy. In the 1980s the Peterson government adopted a combination of interventionist and market-driven programs. The subsequent election of the NDP exposed the province’s evolving class differences. Rae’s campaign was based on promises to expand government programs. In government, however, the NDP moved to the right as it faced increasing neoliberal pressures. These inconsistent ideological perspectives were also evident in the province’s opposition to NAFTA. Subsequent Conservative and Liberal governments adopted a policy agenda consistent with neoliberal principles. Note, however, that the neoliberalism of Harris, Eves, and McGuinty is divisive and generates significant tensions between capital-based interests, the lower classes, and the public sector. International pressures are such that a return to oneparty dominance is unlikely in Ontario’s near future.63 For almost two centuries, English capitalists, who shared the governance of Quebec with the Catholic Church, dominated the province’s political economy. Thus until the mid-twentieth century, dominant ideas were shaped by British “liberal” attitudes toward trade and by the Church’s suspicion of capitalism. During the Duplessis era, American investment became increas-

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ingly important, as it did following the Quiet Revolution. Quebec also supported liberalized trade, but only with exclusions for specific sectors, such as agriculture. In response to neoliberal economies of scale, Quebec also resisted the privatization of state-owned enterprises and merged many of these corporations to better compete against foreign interests. For these reasons, Quebec was arguably the most successful province at resisting external neoliberal influences. In fact, many of Quebec’s economic policies were driven by domestic considerations – namely, the province’s role in Canadian federalism. Liberalization, therefore, was a dominant idea supported by both the PQ and the Liberals that had political and ideological “sponsorship” within the institutions of Quebec’s government. Commitments to market principles, however, were rarely prioritized over provincial autonomy. The question is whether Quebec will be able to maintain these objectives in the future. Conclusion This chapter has argued that dominant neoliberal ideas contributed to changes in the political cultures and foreign trade policies of BC, Alberta, Ontario, and Quebec. It has also suggested that Canadian provinces have been resilient to these pressures, especially in the absence of significant institutional support. This has resulted in provincial trade policies that are often ideologically inconsistent. In BC, for example, NDP governments during the 1990s adopted pro-growth policies based on external neoliberal influences, even while maintaining interventionist approaches in other key sectors. Ontario experienced a similar shift to the right, ending the province’s tradition of one-party brokerage politics, though not at the expense of provincial economic interests. Alberta’s political culture, on the other hand, has historically embraced neoliberal economic traditions. Finally, Quebec has demonstrated an impressive capacity to shape its own economic agenda, driven primarily by the pursuit of decentralization within Canadian federalism. As suggested in earlier chapters, subfederal dominant ideas are ultimately a combination of ideological considerations of left and right, provincial political economies (the need to protect key export sectors), and concepts of civic engagement. All of these considerations have shaped provincial political cultures and issues of process and outcome as they relate to foreign trade policy.

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Part 3 Evaluating Regimes and Change

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9 Non-Central Governments’ Cross-Border Functional Relations

Part 3 of this book evaluates intrusive international trade commitments and the concept of change. It addresses previous observations related to policy outcomes and state autonomy. It also focuses more directly on regimes and on whether evolving governance structures are deviations from traditional power or interest-based frameworks. To explore these issues, this chapter examines provincial relations with US states in functional organizations such as, but not limited to, the Pacific Northwest Economic Region (PNWER). In doing so, it will argue that province-state relations over the past three decades have fostered another layer of governance in North America. Members of the executive, the bureaucracy, and elected legislatures dominate participation in these forums, thereby contributing to the “internationalization” of executive federalism. Furthermore, the content of specific cross-border agreements suggests that the interests of provinces have done much to influence these transnational governance frameworks. At the same time, however, these ties remain primarily functional in nature. Thus there is little evidence that this regime will serve as a catalyst for deeper continental integration. Province-State Relations in Context Literature on the cross-border activities of provinces is not well developed, especially in terms of international trade. Early studies summarized provincestate relations over a wide range of issues and were often quantitative.1 More recently, considerable attention has been directed at environmental activities, either as a general overview or in a regional context focusing on the Pacific Northwest, the Great Lakes, and Atlantic Canada.2 Other contributions regarding the environment scrutinize specific cross-border issues, such as acid rain.3 The non-environmental literature is less focused and covers an eclectic range of topics. Contributions addressing economic activity have examined specific province-state relations, such as Alberta and Idaho.4 Other sources have reviewed, at least in some capacity, cross-border disputes.5 For the most part, though, there is an absence of attention to functional cross-border

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relations within specific institutionalized forums. Those that do exist tend to limit discussion to linkages in Cascadia and in New England, Quebec, and Atlantic Canada.6 Before exploring specific examples of province-state relations, it is important to clarify that this activity takes place in a number of formal and informal settings. The first and most obvious contact occurs through existing regional associations in the United States, such as the New England Governors’ Conference (NEGC). Other cross-border connections are less institutionalized. These include state and provincial interactions at the bureaucratic level as well as executive contacts related to trade promotion and cross-border crises. In addition, members of provincial and state legislatures interact in regional forums, such as the Council of State Governments-West (CSG-West). Finally, the provinces are relying increasingly on legal representation at the state and federal levels, with most of this attention directed at specific sectoral issues in Washington. This chapter will focus on institutional regional associations. A number of these forums limit participation to members of the executive; others have a more inclusive membership that includes government and non-governmental actors. These associations have varying mandates. Some limit themselves to trade, while others address economic, security, environmental, and social concerns. For the most part, this discussion will isolate trade-related issues, though overlap with other areas, especially security and the environment, is inevitable. For this reason, some important cross-border management mechanisms, such as the International Joint Commission (IJC), will not be addressed. Most observers forget how durable many of these cross-border linkages are. Some functional relations between Canadian provinces and American states date back to the early postwar years.7 Generally, however, earlier interaction was “mundane” and involved officials at lower levels of authority. Specific examples included the supervision of rivers and water resources, the planning and management of highways and roads, and general law enforcement activities.8 While these formal and informal functional relations remain the cornerstone of state-province interactions, it is also clear that provincial involvement in more institutionalized forums has increased over the past decade. The question is, has this activity resulted in greater influence for subfederal governments, or are these ties of minor importance to provincial premiers and state governors? Atlantic Canada Atlantic Canada was the first region to establish institutional cross-border linkages. This was due, in part, to a history of regional integration in New England, which included the development of state-level associations such as the New England Council (NEC), the New England Governors’ Conference, and the New England Board of Higher Education. Of these, the NEC,

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founded in 1925, was the oldest and most influential. Based in Washington and Boston, it was a “well financed business lobby” that targeted specific issues; between 1937 and 1965 it provided organizational support for meetings of the NEGC.9 Over the past three decades the NEGC has become the most important regional forum in New England. Though the NEGC has no formal power, it does facilitate discussion and consensus among the region’s governors on issues such as tourism, transportation, economic development, and energy.10 The New England Secretariat for the Conference of New England Governors and Eastern Canadian Premiers is part of the NEGC’s framework. Support for regional integration also existed in Atlantic Canada. The first attempt to embrace a model similar to the NEC was the Atlantic Economic Forum (AEF), founded in 1953. Consisting of premiers and regional business interests, the AEF was designed to enhance dialogue between New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador. Critics of the AEF viewed it as a threat to province building and as an “urban”-driven initiative that would isolate rural communities. The AEF was also weakened by Newfoundland’s decision to leave the association in the mid-1960s. The threat of Quebec nationalism and the creation of the Department of Regional Economic Expansion sparked new interest in regional integration, especially in New Brunswick. To address these issues the premiers established the Maritime Union study, which endorsed full political union for Atlantic Canada. Nova Scotia and PEI, however, did not fully support the proposals, except as they related to creating a Premiers’ Council. There was additional cooperation on issues such as municipal training, land registration, and postsecondary education, but there was minimal political will to pursue deeper regional ties at that time.11 These early attempts at regional cooperation on both sides of the border contributed to the creation of the New England Secretariat for the Conference of New England Governors and Eastern Canadian Premiers in 1973. Initially, these meetings focused on energy issues. Today the secretariat organizes annual conferences that alternate between Canada and the United States. Participants include the New England governors and the premiers of Newfoundland, Nova Scotia, New Brunswick, Prince Edward Island, and Quebec. These meetings address a wide range of issues, including tourism, minor trade irritants, transportation, and economic development.12 According to some provincial governments, it is difficult to underestimate the importance of this consultative mechanism. One senior official from New Brunswick suggested that the conference remains the “major connection” for the province on cross-border functional issues.13 The Conference of New England Governors and Eastern Canadian Premiers has also established committees to study energy, the environment, transportation, and trade and globalization. However, the provinces’ participation in these committees is sporadic. Some provinces, such as New Brunswick,

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have utilized the conference’s Standing Committee on the Environment to develop provincial positions on acid rain and climate change.14 Other provincial governments, and some New England states, are less involved owing to a lack of interest and resources.15 The one exception to this, since the terrorist attacks of 11 September, has been the transportation committee. In recent years this committee has been highly active owing to new border procedures, such as the Smart Border Accord. Provincial involvement on this committee, however, does not always yield tangible results. According to a New Brunswick bureaucrat, the failure to implement the accord east of Montreal sparked a great deal of action “by state and provincial officials as they attempted to influence both Washington and Ottawa to reconsider this position, although with little success.”16 Provinces in Atlantic Canada have started focusing on other regional forums in addition to the Conference of New England Governors and Eastern Canadian Premiers. New Brunswick, for example, has become an active participant in the Eastern Regional Conference of the Council of State Governments. In addition, the province has bilateral commitments with Maine related to highway and bridge maintenance and management of the St. Croix Waterway.17 Though Nova Scotia has agreements in place with Massachusetts, and increasing contact with Maine, it places a lower priority on cross-border linkages. Much of this is due to geography and the lack of a shared land border with the United States. A senior PEI official articulated a similar attitude toward state-province bilateral relations. “Maine approached us in 2003 about the possibility of creating an improved corridor for Maritime trade,” he noted, but “to be honest, PEI was not that interested.” The same representative noted that PEI tends “to view many of these states as competitors instead of customers given that we both sell lobsters and potatoes.”18 A representative from Nova Scotia was more direct, suggesting that “there’s not a lot of incentive to cooperate when they keep screwing us on blueberries.”19 Clearly, then, it is New Brunswick that places the greatest emphasis on cross-border ties in Atlantic Canada. This interest intensified with the election of Bernard Lord’s Conservative government. Lord made it a priority to diversify relations with the United States outside of New England; this was evident in trade promotion efforts in southern US states and in a Memorandum of Understanding signed with North Carolina on knowledge-based industries. Perhaps more important, New Brunswick also attempted to build a presence in Washington in order to directly engage Congress. The province hired a consulting firm in 2003 and sent provincial officials to Washington for specific meetings. In the words of one senior New Brunswick representative, “Ottawa was not happy about this and considered it a very sensitive issue.” In fact, “Canadian embassy officials accompanied us to all our meetings and we were careful not to challenge Ottawa’s authority.”20 New Brunswick has also organized conferences on specific border issues. In May 2003,

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for example, it facilitated a meeting that included a wide range of bureaucratic interests from both levels of government; participants included Business New Brunswick, Intergovernmental Relations, Transport, and Canada Customs. Also invited were working-level officials from Maine and various relevant federal agencies.21 Central Canada It is important to distinguish between Ontario and Quebec when evaluating cross-border functional relationships in Central Canada. Both provinces are associate members of the Council of Great Lakes Governors (CGLG), but Quebec’s linkages with Atlantic Canada, and the importance of hydroelectricity to the provincial economy, are such that its cross-border ties are more extensive. Indeed, Ontario limits its activity to a narrow range of issue areas within the CGLG, specific trade disputes, assorted functional agreements, and direct ties with US state representatives. Recently, however, Ontario played an important role in the CGLG’s Water Management Working Group. After three years of negotiations, the CGLG succeeded in finalizing a series of measures related to Annex 2001 of the 1985 Great Lakes Charter. These provisions, formally titled the Draft Annex Implementing Agreements (2004), called for the implementation of conservation and information programs, the adoption of consistent standards, and collective decision making regarding increased water usage.22 The CGLG has also attempted to improve market access for the region. Through these efforts – part of its Great Lakes International Trade Initiative – it has established international offices in a number of countries. State participation in these ventures varies, with a high of four CGLG members in Brazil (Indiana, New York, Ohio, Wisconsin) and South Africa (Indiana, New York, Ohio, Pennsylvania) and a low of one sponsor state each in Argentina (Ohio), Australia (Pennsylvania), and China (Wisconsin). The CGLG’s largest office, established in 1990, is in Toronto and is sponsored by Indiana, Pennsylvania, and Wisconsin.23 Obviously, Ontario has no role in this aspect of the CGLG. Ontario has also focused considerable attention on trade disputes with US states. One example was the 1999 Ontario-Minnesota fish dispute, which began when the state failed to implement the recommendations of a joint task force on sauger and walleye fish stocks in shared boundary waters. In response, Ontario initiated catch limits for non-residents who did not fulfill an “overnight stay requirement.” Minnesota viewed this as a violation of Canada’s trade-in-services obligations and pushed the Office of the US Trade Representative (USTR) to intervene. According to Stephen de Boer, the USTR’s willingness to act was a good example of how trade issues become politicized in the United States. Specifically, the USTR engaged the issue because midterm congressional elections were underway and there was unified support

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for action in the governor’s office and the Minnesota Congressional Caucus. Ontario eventually ended the dispute by removing the overnight requirement; at the same time, though, it reduced catch and retention rights for non-residents. This dispute highlighted the politicization of Congress; as de Boer suggests, it also proved “the broader point that trade agreements are not inherently the proper tool or forum to resolve disputes that are not fundamentally related to trade.”24 Another cross-border trade dispute was Ontario’s disagreement with New York over procurement policy. In 1999 a bill was introduced in the New York legislature that granted the state the right to designate domestic procurement policies as discriminatory. The legislation was the result of a contract awarded to an Ontario company for the production of an “I Love New York” tourist guide. A significant difference between the New York and Minnesota disputes, however, was that Washington was unable to intervene, given Quebec and Ontario’s exemption from the WTO Agreement on Government Procurement. Regardless, Ontario and Quebec eventually opened provincial procurement policies and both provinces were removed from New York’s discriminatory list. Quebec and New York also negotiated a consultative mechanism for future disputes. Ontario further committed itself to collaborating with the state on transportation infrastructure, environmental, natural resource, and job-creation programs.25 Ontario takes a more eclectic approach to cross-border relations than other provinces. That said, the Liberal government of Dalton McGuinty has prioritized closer ties with US states. For the most part, these relations have developed at the executive and official levels; for example, in 2005 the premier held a bilateral meeting with the governor of Georgia. Also, the Assistant Deputy Minister of Economic Development and Trade has developed contacts in several American states, and Ministry of Economic Development and Trade (MEDT) bureaucrats have linked up with counterparts in New York and Pennsylvania. In 2004 a senior policy analyst from MEDT was asked to participate in the National Forum on Trade Policy, an annual “invitation only” conference previously sponsored by the University of North Carolina, Duke University, and the North Carolina Department of Commerce. This official made it clear, however, that Ontario can hardly be said to be developing significant cross-border relations at the official and executive levels. Indeed, it “remains driven by issue-specific contact but it is still valued by this department.”26 Quebec has a number of well-developed cross-border functional ties that extend beyond specific trade disputes. Most of these are the result of linkages with New York and New England related to energy. Quebec’s regional trade in electricity expanded significantly following the 1965 blackout in the US Northeast. In the aftermath, New England developed an integrated electrical grid managed by a number of investor-owned utilities. That grid, known as

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NEPOOL, began purchasing large quantities of energy from Eastern Canada as a means to prevent another major power disruption. Not surprisingly, cross-border trade in energy continued to expand following the energy crisis of the early 1970s. As a result, Quebec has a legacy of cross-border linkages that Ontario does not. Quebec’s goal was not greater regional integration; rather, it was to secure a stable market for provincial energy exports.27 In 1983 Quebec and New York agreed to institutionalize annual “summits” between the two jurisdictions. At first, energy issues dominated the agenda; after 11 September, the focus of these meetings shifted to security and transportation infrastructure. Both governments made a commitment to collaborate on a range of issues, including harmonizing road signs and improving the Autoroute 15 (Quebec) and Interstate 87 (New York) highway systems. In 2001 Quebec approved US$48 million for upgrades to the Canadian side of the Lacolle-Champlain border crossing, which handles around 45 percent of truck traffic between Quebec and the United States. The following year, meetings were held in Plattsburgh, New York, and St-Jean-sur-Richelieu, Quebec, where the governor and premier endorsed a North American security perimeter and pledged closer ties between the Quebec Department of Public Security and the New York State Office of Public Security. After the summit, Governor George Pataki pledged another US$35 million for upgrades to the American side of the Lacolle-Champlain crossing.28 This is not to suggest that bilateral summits replaced Quebec’s traditional participation in the Annual Conference of New England Governors and Eastern Canadian Premiers. Indeed, that forum expanded its focus after 9/11. At the 2002 meeting, hosted in Quebec City, trade, security, and environmental issues were on the agenda. At one point, Quebec Premier Bernard Landry even pointed to Europe as a possible model of future regional cooperation. A number of Quebec officials, however, dismiss the Conference of Governors and Premiers as a forum driven by US interests. According to one senior bureaucrat, “for years these meetings focused on energy and the environment because these were the issues the Americans wanted to talk about.” In the aftermath of 9/11, however, security became a major issue “and much of this was driven by Washington as it placed pressure on governors to focus on these concerns.” Quebec is currently a member of the conference’s subcommittee on trade and globalization, formed in 2000. However, the Americans are not usually interested in this work “unless it involves infrastructure projects to facilitate cross-border trade.”29 Western Canada Some cross-border linkages in Western Canada date back to the 1960s. One of the first was the 1961 Columbia River Treaty. During negotiations, BC Premier W.A.C. Bennett made several trips to Washington to promote provincial interests. Following the agreement, he continued to push Ottawa for

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looser export rules on the sale of hydroelectric power to the United States. As a result, in the “revised treaty” of 1964 the BC Hydro and Power Authority was able to partner with a number of American power firms located in the Pacific Northwest.30 During this period, Saskatchewan was also embroiled in its own cross-border dispute with the United States. In 1969 the province was accused of dumping potash into the New Mexico market. In the final agreement, Saskatchewan agreed to regulate trade through a series of export licences in exchange for a guaranteed minimum price. Though these negotiations succeeded, New Mexico failed to stop Congress from implementing countervailing duties on subsequent exports.31 Today, all four western provinces engage in cross-border functional relations. Saskatchewan, for example, is an associate member of the Midwestern Legislative Conference (MLC), a regional forum linked to the Council of State Governments Midwest, which also has ties with the Midwestern Governors Association. For the most part, Saskatchewan’s participation in the MLC is limited to roundtable sessions in which discussions are held on an eclectic range of issues, including country-of-origin labelling, nursing homes, public pensions, legislative ethics, and affordable health insurance for small business.32 Saskatchewan is also a member of the MLC’s Mid-West Canada Relations Committee, founded in 1991. All eleven member states of the MLC, and legislators from Saskatchewan and Ontario, are represented on the committee. In recent years the committee has examined the impact of North American Free Trade Agreement (NAFTA), border access issues related to tourism and commercial trade, and Great Lakes port development. In 2003 the committee supported exchanges for legislators on both sides of the border and sponsored an MLC resolution calling for the “rapid reintegration of the North American beef industry.”33 Saskatchewan participates in the MLC based on its desire to pursue provincial economic interests beyond the premier-governor level. According to one senior official, Saskatchewan now “realizes it’s necessary to get to legislators given the process of lobbying in the United States.” Participation in the MLC is also an attempt to overcome state executives’ uneven interest in Canadian provinces. In addition, Saskatchewan has bilateral agreements with Montana and hopes to pursue closer ties with Minnesota, but according to the same bureaucrat, “John Hoeven, the Republican governor of North Dakota, does not make us a real priority, despite existing province-state MOUs.” This observer also made it clear that Saskatchewan is realistic about its influence in cross-border forums, especially as they relate to trade. In general terms, “international trade is a federal responsibility in the US, so any influence tends to be limited to technical and regulatory issues that fall under state control.” An additional problem, he continued, is that “the majority of states in the region have very small, if any, bureaucratic resources devoted to these issues.”34

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Manitoba joined the MLC in 2004. However, the province has always emphasized cross-border linkages at the executive level. Manitoba’s New Democratic Party (NDP) premier, Garry Doer, has prioritized relations with US states within the Western Governors Association (WGA), which includes governors from eighteen western states as well as three US-Flag Pacific islands (Guam, American Samoa, the Northern Marianas). For more than a decade, Canada’s western premiers have attended that association’s annual meeting, albeit not as formal members. Instead, the WGA has a working relationship with provinces associated with the Western Premiers Conference (WPC). The WPC and the WGA rotate annual meetings between Canada and the United States. To date, most discussions have focused on trade, transportation, and energy.35 For Doer, the WGA is an opportunity for Manitoba to highlight its importance as a hub of midwest trade. As a Manitoba representative pointed out, “Doer places a real priority on the WGA. He attends all WGA events and really sees it as a way to build bilateral relationships with numerous states in the region.”36 In May 2000, Doer hosted the WPC in Brandon. Representing the WGA were the governors of North Dakota (Ed Schafer), South Dakota (William J. Janklow), and Idaho (Dirk Kempthorne). The 2003 Memorandum of Understanding on Drought and Wildland Fires was a joint initiative between the WPC and the WGA. This was an important issue for Manitoba, and Doer participated directly in a joint province-state study, Enhancing Cross-Border Cooperation to Fight Forest Fires. The MOU was in addition to numerous existing functional agreements in this policy area. The WGA, for example, in collaboration with the Department of Agriculture and the Department of the Interior, had already developed a ten-year strategy, titled the National Fire Plan for the Western United States. Also, in the aftermath of 11 September, Canada and the United States had reviewed the cross-border movement of emergency personnel and equipment as part of the Smart Border Accord. By this time the Canadian Interagency Forest Fire Centre (CIFFC), located in Winnipeg, and the National Interagency Fire Centre (NIFC), located in Boise, had been partly integrated through the Canada-US Reciprocal Forest Fire Fighting Arrangement, signed in January 2003. The basic purposes of the MOU were to improve the standardization of training, equipment, and technology and to promote the ongoing integration of the CIFFC and the NIFC. The MOU also called for the development of a “Closest Resource Protocol” to ensure a timely response to fires by crews on either side of the border.37 Manitoba has also negotiated several bilateral MOUs with American states and municipalities. The province recently completed a series of agreements with Minnesota focusing on economic development, trade, tourism, water, and education. In addition, the province has signed an MOU with Texas on trade and economic development and has engaged in preliminary discussions with California on clean energy. Manitoba has also signed an MOU

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on biotechnology with the city of Atlanta. The province’s focus on technology, medicine, and clean air is in anticipation of further provincial growth in these sectors. The province is home to a number of life sciences and technology companies, and the University of Manitoba has developed a cluster of expertise in these research areas.38 This emphasis was evident in a joint trade mission to Texas in January 2005. In partnership with New Brunswick, Manitoba officials travelled to Houston, Austin, and San Antonio, where Doer promoted the province’s “biomedical, manufacturing, high-tech, and transportation companies.”39 Alberta has a history of active cross-border relations. It has ties with numerous subfederal associations, and its Ministry of International and Intergovernmental Relations has published provincial position papers on bilateral relations with American states such as Montana, Idaho, Alaska, Washington, Colorado, Minnesota, Arizona, and New Mexico.40 In terms of the WGA, Premier Ralph Klein regularly attended annual meetings and supported more formal relations between the association and the WPC. Also, Alberta has entered into formal agreements with WGA members on cross-border technical issues. A specific example is the 2002 protocol Governing the Siting and Permitting of Interstate Electric Transmission Lines in the Western United States. The purpose of that agreement is to improve the efficiency of cross-border and interstate sales of electricity in Western Canada and the United States. Though the protocol was negotiated as part of the WGA’s mandate, a number of US federal departments were involved, including the Interior, Agriculture, and Energy departments and the Council on Environmental Quality.41 In April 2004, Alberta negotiated an addendum to the protocol, which specified that the agreement could not alter the “existing jurisdiction, statutory and regulatory responsibilities and authorities or budget processes of the Province of Alberta.”42 Another example of Alberta’s cross-border regional agenda is its involvement in PNWER. Formed in 1991, that group includes representatives from Alaska, Montana, Idaho, Washington, Oregon, BC, Alberta, and Yukon. Industry associations and economic development commissions are also members. Prior to the BSE crisis, Alberta’s main interest in PNWER was the development of export markets. The exception was transportation, where Alberta used PNWER to work with state counterparts to develop CANAMEX, a proposed trade corridor to Mexico through Canada and the United States. After 11 September, PNWER also discussed ways to prevent the disruption or slowdown of cross-border shipping and business travel. One initiative involved promoting Intelligent Transportation Systems (ITSs) and Joint Use Vehicle Inspection Stations (JUVISs). States and provinces also agreed to promote joint-permitting of trucks and to streamline other cross-border activities related to customs and immigration, most of which were addressed under the Canada-US Smart Border Accord.43

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The Montana Alberta Bilateral Advisory Council (MABAC) was formed in 1985 and includes representatives from both government and business. In its annual meetings, which alternate between Alberta and Montana, many issues are discussed. For example, MABAC was one of several important forums for Alberta during the BSE crisis. Energy is also a priority, and Alberta and Montana have targeted coalbed methane as an important area of cooperation. MABAC also serves as a means to coordinate transportation issues, including CANAMEX, joint permits for trucks, and a shared JUVIS facility at the Coutts-Sweetgrass border crossing. Management of the Milk and St. Mary Rivers is part of a state-provincial water program. Finally, MABAC deals with tourism issues related to Waterton-Glacier National Park. Given the importance of this forum, it is not surprising that in March 2000, Alberta and Montana formalized relations with an MOU recognizing MABAC as the principal bilateral mechanism for state-provincial relations. The MOU includes an informal dispute-resolution process.44 Though Alberta participates in a range of cross-border initiatives, government officials understand that this activity does not always equal greater influence, especially when it comes to international trade. “The simple reality,” said one provincial bureaucrat, is that many of these regional forums are very US-oriented, “so the challenge is to ensure they acknowledge our existence.” The same representative noted that a significant percentage of Alberta’s trade with the United States “travels by pipeline ... which can make transportation corridor issues somewhat secondary, unless it has a direct impact on investment.”45 Given these realities, Alberta now views these cross-border ties as part of a broader political effort to influence Washington on trade issues. Congress has been diverting more attention to these regional forums owing to the impact that trade issues can have on voter support. Having said that, it is clear that Alberta considers bilateral initiatives more favourably in terms of potential influence.46 In BC, responsibility for participation in US regional forums rests mainly with the Intergovernmental Relations (IGR) Secretariat. Under the current Liberal government, BC is associated with the WGA, CSG-West, PNWER, and the International Mobility and Trade Corridor (IMTC). The Secretariat has a dual responsibility regarding international trade. First, it serves as an observer to ensure that trade issues are kept in a broader intergovernmental context. This can be an extremely passive role, with IGR simply monitoring developments, or it can be more intrusive, as when the department contacts ministries to ensure that trade commitments are being observed.47 The second mandate of IGR is to coordinate BC’s trade promotion activities. These efforts often involve several non-trade components, including cultural and educational issues. In these situations IGR is responsible for coordinating the common goals and policies of several different departments.48

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Following Campbell’s election as premier, the province made the WGA a priority. In 2001 Campbell attended his first WGA meeting, where, in conjunction with other western premiers, he advised US governors on provincial concerns related to the Canada-US softwood lumber dispute. During the 2003 meeting of the WGA, the premier signed bilateral agreements on environmental cooperation with Idaho and Montana. Like Alberta, however, BC accepts that it has a limited role in the WGA. According to one representative, the WGA “will sometimes bring in outsiders to discuss issues they have on their agenda and it’s in this capacity we’re usually involved.” In its current form, the WGA does not provide a forum to directly lobby for BC’s trade interests. The province is not a member, and it is doubtful that it will become one in the future. “We’re there primarily to build relationships,” said the same official, “and in the long term this might help the province ... but for now we’re realistic about our participation.”49 CSG-West has a different mandate than the WGA. Founded in California more than fifty years ago, CSG-West is a professional development forum for US legislators. CSG-West’s membership is more inclusive than that of the WGA. Meetings are open to all elected legislators, their staffs, the private sector, county commissioners, and mayors in addition to the thirteen member states. Votes on policy or other organizational issues, however, are limited to one official state representative. BC has official standing in CSG-West. It became an “associate” member in 2000, joining a small number of other states and provinces, including Alberta, American Samoa, and the Northern Marianas.50 Despite its enhanced standing, BC’s influence in this forum is minimal. CSG-West’s executive committee, for example, has considered only one Canadian issue – Vancouver’s bid for the 2010 Winter Olympics, which it endorsed. Direct Canadian participation at CSG-West meetings is limited to brief presentations by provincial bureaucrats. While this might appear to be a waste of resources, informal relationships developed during CSG-West meetings did contribute to the resolution of a non-trade–related problem with Alaska. Under Alaskan law, aircraft must carry survival gear, including rifles and handguns, if they wish to land at state airports. After a series of meetings, Alaska exempted Canadian aircraft from these guidelines.51 Another important cross-border forum for BC is PNWER. Like the WGA and CSG-West, PNWER is viewed by provincial officials as a means to influence American states on matters of international trade. In recent years, for example, a dispute between Oregon, BC, and Alberta regarding horticultural producers and provincial phytosanitary restrictions was addressed within PNWER.52 The first PNWER meeting held outside the United States was in Whistler in July 2001. Subsequently, PNWER hosted summits in Calgary in 2003 and Victoria in 2004. At the Calgary meeting, PNWER passed a formal resolution citing the need for a lasting solution to the softwood lumber dispute. The 2010 Vancouver Olympics and oil-and-gas development in BC

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were also prominent on the agenda. In Victoria, PNWER resolutions focused on harmonizing border access for low-level criminal convictions; improving regional transportation infrastructure for the Winter Olympics; and supporting the US-Canada Smart Border Accord. Additional motions included issues related to energy, invasive species, tourism, and transportation.53 Cross-border access considerations for BC are usually addressed within the IMTC or as part of the Peace Arch Crossing Entry (PACE) program. PACE, introduced in 1991, was designed to improve the flow of traffic for individuals making regular border crossings. The idea was initiated within PNWER and other transborder groups, such as the Cascadia Institute. After passing a security check, individuals qualifying for PACE received a windshield decal that allowed them to bypass the regular customs inspection process. Though cross-border shopping in Bellingham, Washington, was extremely popular in the early 1990s, PACE was promoted mainly as a means of access for commuters and Canadian citizens with cottages and trailers in Blaine. The program was the first of its kind in North America and was so successful that Canada opened similar cross-border programs throughout the country, with PACE eventually becoming CANPASS. To date, however, the Americans have not extended the PACE program to other crossings.54 In contrast, the IMTC partnership focuses on a wide range of short-term regional transportation issues. Founded in 1997, the coalition was created to address the capacity problems of ports, highways, rail lines, and waterways in BC and Washington. In 1998 the IMTC successfully pressured the US Immigration and Naturalization Service for $1.6 million to expand Washington’s PACE program. In the immediate aftermath of 11 September, the BC government continued to support several IMTC issues, including CANPASS and electronic surveillance for cargo containers.55 At the IMTC Steering Committee Meetings of June 2002, the forum recommended shared-cost programs for highway projects in BC, as well as incorporating municipalities in discussions related to transportation routes in the Cascadia corridor. Also during this period, IMTC obtained funding under the US Transportation Equity Act for the 21st Century (TEA-21) for cross-border travel initiatives, statistical analyses, and continued improvements to the PACE program.56 Today the IMTC has more than sixty private- and public-sector members from both Canada and the United States.57 Its ongoing priority is to improve Intelligent Transportation Systems such as CANPASS. Subfederal Linkages: Multilevel Governance, Regimes, and Integration From this discussion, it is clear that cross-border linkages exist in every region of Canada, involving all provinces. The key is to evaluate whether these ties create a system of norms and standards consistent with other forms of governance. Before examining this issue, it is important to clarify distinctions between global governance and integration. According to the Commission

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on Global Governance, governance involves the management of common affairs among public and private individuals and institutions. This process involves a dispersion of authority within both formal institutions and informal arrangements.58 According to G. Bruce Doern and Robert Johnson, these relationships in Canada involve “interacting, reinforcing, and colliding rule making and governance at the international, federal, provincial, and city/local community levels.”59 This is the basis for the term “multilevel” governance. James Rosenau has suggested that regimes play an important role in the emergence and maintenance of governance frameworks. In his view, regime theory accounts for government and non-governmental actors; it provides a “wider view” that includes states, international organizations, and less hierarchical forms of governance.60 Multilevel governance, however, is not “global” governance. Rather, it is the interaction of state interests within different structures of order – an order that includes domestic considerations, states, and supranational institutions. Global governance, by contrast, is less institutional and focuses on the interplay of state, corporate, and civic actors. It also tends to emphasize normative issues of “fairness in governance” as opposed to bargaining relationships.61 The issue of multilevel governance and regime formation has been explored in a Canadian context. Daniel Madar, for example, examined the deregulation of the North American trucking industry. Despite significant trade between the United States and Canada, the two countries had separate and heavily regulated highway transportation markets. The US eventually deregulated its industry, and Canada followed owing to concerns about American market access. Madar noted the emergence of a “de facto regime” of free trade in North American trucking services in the aftermath of these changes.62 Doern, Margaret Hill, Michael Prince, and Richard Schultz also examined regimes in the context of Canadian regulatory practices. Specifically, they adopted an overlapping four-regime framework (sectoral, framework, cabinet-executive, international) to explain why some sectors had expanded regulation while others had not. For them, the fourth regime (“international”) best reflected governance issues, given that Canadian regulatory bodies now had to interact with foreign agencies, international interest groups, and institutionalized dispute resolution panels.63 If multilevel governance regimes exist in Canada, it raises the possibility of expanding economic integration in North America. As noted in Chapter 2, there are two general arguments regarding integration. On one hand are those calling for “deeper” linkages between states; this could entail a “NAFTA plus” approach or the creation of supranational institutions similar to those of the EU. Other arguments, however, call for a slower, incremental approach, that places a greater emphasis on state autonomy and existing international

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commitments. The Government of Canada’s Policy Research Institute (PRI) recently addressed these questions in the context of cross-border regions. Ultimately, the PRI acknowledged that cross-border regions share strong economic ties, similar socio-cultural values, and membership in regional organizations. At this point, however, any movement toward deeper integration, even at a regional level, would depend on identifying tangible benefits for cross-border elites; these benefits would then be linked to non-partisan initiatives involving the public and private sectors.64 This chapter has argued that cross-border functional relations add another dimension to multilevel governance in North America. Specifically, subfederal interests have been accommodated in formal and informal settings; in addition, provinces and states have engaged in rule making and regulatory controls. In Atlantic Canada the provinces have established norms of interaction through the Conference of New England Governors and Eastern Canadian Premiers regarding tourism, trade, energy, economic development, and the environment. As well, individual Atlantic provinces have pursued cross-border relations in other forms. New Brunswick has ties to the Eastern Regional Conference of the Council of State Governments and has signed bilateral MOUs and agreements with Maine and North Carolina. Though PEI’s interest is somewhat limited, Nova Scotia has a formalized agreement with Massachusetts and is also a member of the trade and globalization committee for the Conference of New England Governors and Eastern Canadian Premiers. In addition, Quebec has historic ties to New England as an energy supplier and now holds annual meetings with New York, which are dominated by transportation and security issues. Ontario’s efforts, on the other hand, have focused on the Council of Great Lakes Governors, specific bilateral disputes with Minnesota and New York, and expanded bureaucratic linkages with US states, such as New York. This conclusion is reinforced when governance structures in Western Canada are examined. Saskatchewan is an associate member of the MLC, is involved in the association’s Midwest-Canada Relations Committee, and has recently negotiated a bilateral MOU with Montana. Manitoba also participates in the MLC and the WGA and has developed bilateral ties with several US states and cities. Alberta is arguably the most active province in terms of cross-border functional relations and has pursued its interests in relation to BSE, CANAMEX, electrical transmission lines, and border access within the WGA, MABAC, and PNWER. Finally, BC has recently placed a greater emphasis on cross-border ties through its participation in the WGA, CSG-West, PNWER, and the IMTC. Whatever the significance of these emerging subfederal governance structures, it is important to not overstate these developments. Put simply, there are limits to the evolution of cross-border linkages, and there is no evidence

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that these ties will contribute to greater continental integration. One problem is the differing levels of commitment to these regional forums throughout Canada. In Atlantic Canada the majority of this activity is driven by New Brunswick owing to its shared border with the United States and a provincial government that has emphasized cross-border relations as part of its “corporate culture.” In Central Canada, Quebec’s interest is a function of historic ties related to energy exports, though the province has recently prioritized border access issues with New York. Ontario, for its part, is active in several forums but appears to approach cross-border functional relations in an ad hoc capacity, with the focus on trade disputes and Great Lakes water management. Western Canada has a more diverse range of relationships with a number of different forums. For the most part, however, and with the exception of Alberta, this interest is relatively new and is a result of the prioritization of these issues by the Doer and Campbell governments in Manitoba and BC respectively. It is also clear these evolving frameworks will not provide the foundation for supranational governance structures similar to those of the EU. First of all, international trade is a federal responsibility in the United States, which means that new and existing province-state linkages will be limited to functional and regulatory issues. Limited bureaucratic resources available on both sides of the border also reduce the potential impact of cross-border ties. Second, it should be no surprise that American interests drive these associations, and Washington’s attention since 2001 has focused on a narrowing list of concerns, namely border access and trade promotion, which are not catalysts for comprehensive integration. Third, the dominance of Congress in US trade policy formulation has marginalized province-state relations. Finally, it is impossible to ignore the fact that most American legislators and bureaucrats have only minimal interest in Canada beyond a very select range of issues. Having said that, it is possible that the development of subfederal norms and standards will continue in the future, and this could provide opportunities for provinces to expand their influence in multilevel governance structures. As de Boer has argued, regional associations have the potential to improve dialogue between states and provinces on international trade issues. Indeed, he has noted the need for an “international joint forum for provinces and states” that could review trade and compliance issues, especially during trade negotiations. De Boer, however, is realistic about the future of these linkages. Constitutional realities in both countries ensure that non-central governments are not legally able to enter binding treaties. Therefore, future efforts to expand the mandate of exiting regional forums will rely on the political will of provincial and state officials. At this point there is little evidence that states and provinces are willing to develop these organizations beyond their current capacity.65

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The Provinces-States Advisory Group (PSAG) of the US-Canada Consultative Committee on Agriculture (CCA) is one possible model for expanding subfederal trade relations. The CCA holds semiannual meetings and provides a forum for trade officials from both countries to review agricultural concerns. PSAG meets less regularly but serves as an advisory forum for the CCA, given that many of these issues are directly tied to subfederal jurisdiction.66 PSAG also participates directly in the Tri-National Agricultural Accord, which was created following the negotiation of NAFTA. CCA and Tri-National Accord meetings deal with a wide range of technical trade matters. During the May 2006 CCA meeting in Ottawa, for example, Canadian and US trade representatives discussed cross-border cattle trade, potato cyst nematodes, seed tagging and certification, the harmonization of pesticides, nutritional labelling, organic regulation, food allergens, bird flu, and country-of-origin labelling.67 The 2006 Tri-National meetings in Banff, Alberta, reviewed animal health issues, feed standards, agricultural biotechnology, pesticides, invasive species, bioterrorism and biosecurity, the wine trade, and dairy product marketing. All ten provinces were involved in PSAG working groups focusing on these issues. Though PSAG currently limits itself to agriculture, some provinces, including Saskatchewan, consider that forum a possible template for formalized subfederal involvement on a wide range of other trade issues.68 Other provinces, including Quebec and Alberta, acknowledge the relevance of PSAG but would prefer a formal institutionalized role in these and possible future forums. Conclusion This chapter examined the increasing transnational activities of Canadian provinces and American states in a number of cross-border functional organizations, including the Conference of New England Governors and Eastern Canadian Premiers, the CGLG, the WGA, and PNWER. As the preceding discussion suggests, these activities have contributed to the evolution of another aspect of multilevel governance in North America. It is also clear that provincial interests have directly influenced the creation or evolution of cross-border norms and standards. Specifically, subfederal governments have engaged in consultations and rule making related to water management, security, trade promotion, transportation, border access, firefighting, and electrical transmission lines. Some observers have called for the further institutionalization of these linkages in cross-border forums similar to PSAG, which could contribute to greater cross-border regulatory harmonization. Members of the executive, the bureaucracy, and elected legislatures have played an active role in existing cross-border forums, thereby contributing to the “internationalization” of executive federalism. At the same time, however, these linkages remain primarily functional and have had only a

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minor impact on provincial autonomy. Indeed, there is little evidence that these ties will serve as a catalyst for deeper economic integration, or the development of EU-type governance mechanisms in the future. This is due to constitutional realities on both sides of the border that place these responsibilities with Ottawa and Washington. Also, there is a lack of political will to engage this issue, especially within the American Congressional system.

10 Emerging Regional Environment and Labour Regimes

During the negotiation and implementation of the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labour Cooperation (NAALC), several Canadian provinces suggested that the North American Free Trade Agreement (NAFTA) Side Deals represented a new level of intrusiveness into domestic policy space. Specifically, there was concern that the NAAEC’s definition of environmental law might be ambiguous enough to include the resource management policies of Canadian provinces. Also identified were problems related to timeliness, transparency, and access regarding the dispute settlement process. As a result, a number of provinces refused to ratify the accords. Since then, several provinces, including non-signatories, have become the target of complaints under the NAAEC’s citizen submission process. This chapter reviews the negotiations and final contents of the Side Deals and examines specific NAAEC cases, such as BC Logging, BC Hydro, BC Mining, Ontario Logging, Quebec Hogs, Quebec Automobiles, and Oldman River (Alberta). In doing so, it argues that the NAFTA Side Deals do not represent a structure of multilevel governance that significantly restricts the autonomy of Canadian provinces. Indeed, there is evidence that comprehensive domestic and international regimes were in place prior to the accords, especially in terms of environmental issues. Also, published Factual Records have demonstrated an unwillingness to contradict existing judicial precedent in Canada. Ultimately, the NAAEC serves as a “preventative” regulatory regime, one that does not directly challenge provincial practices. Environment, Labour, and the Original NAFTA Negotiations Few studies have examined the Side Deals and Canadian provinces. As John Kirton has pointed out, most contributions focus on a narrow range of problems related to the NAAEC, in particular its effectiveness, transparency, and access.1 Others tend to be more optimistic, focusing on the positive implications of developing North American standards for labour and the

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environment.2 Finally, some supporters of NAFTA view the accords as means to create strong regional governance structures that reflect the convergence of trade and environmental policy.3 What is missing is an examination of the Side Deals in relation to provincial autonomy and the development of domestic and transnational governance frameworks. Before this question can be explored, it is first necessary to review the negotiations and content of the NAAEC and NAALC in relation to Canadian provinces. The NAFTA Side Deals were not the first attempt to create common North American environmental standards. For example, a functional Canada-US environmental regime evolved over several decades, especially in terms of Great Lakes water control and air-quality concerns such as acid rain.4 That said, the NAAEC and NAALC did represent the first time these issues had been included as part of an international trade agreement. The possibility of supplemental accords on labour and the environment had been discussed at length during the original NAFTA negotiations. John Weekes, Canada’s chief negotiator for NAFTA, in his testimony to the Senate Standing Committee on Foreign Affairs, recalled that both issues began to dominate trade negotiations in the spring of 1991. According to Weekes, these two topics became so prominent that he began to wonder whether he “was ever going to be able to deal with anything other than environmental and labour issues.”5 For the most part, Canada’s position on these matters was consistent with other commitments Ottawa had made in the early 1990s. Canada had negotiated a Memorandum of Understanding on labour with Mexico; it had followed this up with an agreement to intensify environmental cooperation, which was signed by Prime Minister Brian Mulroney and President Carlos Salinas. Weekes believed that as a result, NAFTA was “more sensitive to [labour and] the environment than any trade agreement previously negotiated.”6 The final text of the basic NAFTA agreement addressed several environmental issues. The promotion of sustainable development was included in NAFTA’s list of objectives, and the Annex specified several commitments. These included the following: the Convention on International Trade in Endangered Species of Wild Fauna and Flora; the Montreal Protocol on Substances that Deplete the Ozone Layer; the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal; the Agreement Between the Government of Canada and the Government of the United States of America Concerning the Transboundary Movement of Hazardous Waste; and the Agreement Between the United States and the United Mexican States on Co-operation for the Protection and Improvement of the Environment in the Border Area. All three signatories also pledged to protect human, animal, and plant life based on relevant international criteria and, wherever possible, to harmonize technical standards to facilitate trade. Finally, the inclusion of NAFTA’s Chapter 11 was at least partly due

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to concerns that weak environmental standards in Mexico might contribute to industry relocation and loss of investment.7 Yet the original NAFTA text was relatively silent on labour issues. Though the preamble encouraged signatories to improve basic workers’ rights, no specific labour provisions were included in the final agreement. Canada and the United States had concerns about “social dumping” and about lax labour and environmental standards pushing production costs down. Not surprisingly, these reservations were linked to Mexico’s maquiladoras, which were established in 1965 as part of the country’s Border Industrialization Program. According to many critics, the maquiladora program exploited Mexican workers, especially in the garment industry, light manufacturing, the automotive sector, and the advanced electronics industry. This was despite Mexico’s strong domestic labour laws. The problem was that these labour provisions were rarely enforced.8 More inclusive NAFTA-related agreements on labour and the environment returned to the forefront of debate during the US presidential election of November 1992. Specifically, Bill Clinton was faced with the dilemma of endorsing an agreement that was a cornerstone of the first Bush administration. During the campaign, Clinton staked out his position on NAFTA, making it clear that his support was provisional on the inclusion of “side agreements” on labour and the environment. After Clinton was elected, the accords became part of the US agenda for the negotiations; this forced Canada to determine its position on the issue. Canada’s trade minister, Michael Wilson, testified to a Senate Standing Committee on Foreign Affairs that Ottawa was “supportive of the side agreements in principle.” He also reminded the committee that the federal government had proposed similar provisions in February 1992, though the previous American administration “did not want to pursue the concept.”9 Regardless, there was some concern in Ottawa that Congress was going to push for mandatory sanctions against violations of labour and environmental standards; and some critics worried that these might be adopted for protectionist or commercial purposes. Other Canadian officials, however, welcomed the Side Deals as an opportunity to contribute to improved labour and environmental standards. Not surprisingly, the outcome of negotiations reflected both liberal and protectionist considerations. The NAAEC The final drafts of the NAAEC and the NAALC were completed on 13 September 1993. Before discussing the role of the provinces during the negotiation of the accords, it is necessary to review the content of both agreements. This will identify concerns raised by critics after the negotiations were completed. In terms of the NAAEC, these questions centred on issues related to the dispute settlement process and the compatibility of the agreement

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with the main NAFTA text’s environmental provisions. Also, specific sections of the NAAEC had direct implications for Canadian provinces, especially in terms of compliance, a lack of provincial representation in the dispute process, and the targeting of subfederal environmental practices for non-signatories. The NAAEC created an institutional framework for environmental issues in North America. Specifically, it established a Commission for Environmental Cooperation (CEC) consisting of a council, a secretariat, and a Joint Public Advisory Committee. The council, which meets once a year in regular session, consists of cabinet-level representatives from signatory states. At the request of any party, special sessions can be held. It is the secretariat, however, that is arguably the most significant CEC institution. It provides technical, administrative, and operational support to the council and other committees and working groups. Also, it has the authority to review written submissions from non-governmental organizations and individuals regarding violations of environmental standards under Articles 14 and 15 of the NAAEC. The NAAEC’s Joint Public Advisory Committee has fifteen members; each member state has equal representation. This committee provides relevant technical, scientific, and other information required by the secretariat for its annual reports, written responses, and Factual Records.10 From the outset there were concerns related to the dispute resolution process. For some observers, these provisions (outlined in Part Five of the agreement) were a positive development, given that the environmental implications of trade practices could now be formally reviewed. Others, however, were more critical of the process, especially its “cumbersome” procedures and lengthy time requirements. The first stage of a complaint, outlined in Article 22, calls for consultation between the parties involved. A submission is forwarded to the targeted state by another government; the two parties then have sixty days to consult on the issue. Non-governmental actors can initiate an action with the secretariat for a Factual Record, as outlined in Articles 14 and 15; these groups, though, are not allowed direct access to the dispute settlement process. If no progress is made between the two parties, a special session of the council is convened to consider the complaint within twenty days of delivery of the request. The council then has sixty days to consult technical advisers and make recommendations on the written submission. Article 23, however, states that any of the parties involved can agree to suspend the process indefinitely; furthermore, the council has the right to delay proceedings if further technical advisers are required.11 If there is no extension of the consultation period and if the council is unable to facilitate a resolution, the next phase is to request an arbitration panel. Article 24(1) states that the council, on the written request of any consulting party and by a two-thirds vote, can convene an arbitral panel.

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Once again, however, in order to move to arbitration the council must approve the measure by a two-thirds vote. Article 24(1) also requires a “persistent pattern of failure” of environmental standards, which places a heavy burden of proof on complainants.12 Based on the testimony of the parties involved, and any expert witnesses, the arbitration panel submits a report within 180 days. Written responses to the report can be submitted to the panel within sixty days for further consideration on the matter, after which the panel has sixty more days to table a final report. Based on the recommendations of the arbitration panel, each side has the option of meeting and developing an independent “action plan” on the issue. In addition to concerns related to time delays, a number of critics were concerned about the NAAEC’s enforcement mechanism. Specifically, if a dispute could not be settled, the panel had the authority to rule in favour of one of the proposals or to impose a monetary penalty on a government that was “unreasonably” delaying implementation. If the disagreement was based on the failure to act on a negotiated resolution, the panel could impose a fine for non-compliance. The main criticism of these provisions, however, was their duplication of existing penalties. Various environmental laws, for example, already allowed substantial fines of close to US$2 million, and these costs were applicable directly to polluters rather than to state governments.13 Other observers questioned whether the NAAEC superseded environmental provisions set out in the original NAFTA text. Article 103 of NAFTA, for example, made it clear that NAFTA guidelines were to prevail when there were inconsistencies with other treaties. Also, Article 23(5) of the NAAEC stated that the council had the right to forward a matter to a different NAFTA or General Agreement on Tariffs and Trade (GATT)/WTO dispute process if it was “more properly covered by another agreement.” These compliance issues had potential implications for Canadian provinces. Of specific concern was the American practice of invoking sanctions against environmental and resource management programs. Since NAFTA did not define “subsidies,” the United States could continue to challenge existing Canadian environmental programs as unfair protectionist measures. Washington was already taking this approach, targeting BC’s export restrictions on raw logs as a countervailable subsidy. The US was also using Section 301 of the Trade and Tariff Act to challenge Ontario’s environmental levy on non-refillable containers. The definition of “environmental law” in Article 45(2) raised further questions related to the vulnerability of provincial resource-management practices. Article 45 stated that environmental law included any statute or regulation that protected the environment or that prevented a danger to human life or health. It excluded, however, any statute or regulation related to commercial harvesting as well as subsistence Aboriginal use of natural resources. Critics suggested that based on this language, provincial projects would be exempt, including hydroelectric projects and

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clearcut forest harvesting.14 Others, however, suggested that the obligation to “protect the environment” would supersede these exemptions. As a result of these concerns, several provinces encouraged Ottawa to push for provincial exclusions during the negotiations. These efforts are most visible in Annex 41 of the NAAEC, which states that Canada must deliver “a list of any provinces for which Canada is to be bound in respect of matters within their jurisdiction.” It was believed that if a province refused to participate in the NAAEC, the provisions of the agreement would no longer be applicable, including the right of non-governmental interests to submit proposals to the secretariat in areas of provincial jurisdiction. Also, Canada would lose the right to launch an NAAEC dispute process against another state related to non-signatory provinces unless Ottawa could prove that the violation was under federal jurisdiction.15 The NAALC Not surprisingly, there are a number of similarities between the NAAEC and the NAALC. The NAALC has a commission consisting of a ministerial council and a secretariat. The secretariat publishes an annual report and prepares studies on any matter requested by the council. The NAALC also established a National Administrative Office (NAO) at the federal level in each state to serve as a point of contact with government agencies, the NAOs of other signatories, and the secretariat of the commission. The NAOs disseminate information on domestic labour matters as requested by the council or secretariat. The NAALC also implements National Advisory Committees and Governmental Committees at the domestic level. These committees provide public- and private-sector information to advise governments on the agreement’s implementation. Much of the criticism levelled against the NAAEC is also applicable to the NAALC. Annex 1, for example, does not establish common minimum labour standards for signatories. Article 2 affirms “full respect” for each state’s constitution and “recognizes the right of each Party to establish its own domestic labour standards, and to adopt or modify accordingly its labour laws and regulations.”16 However, though Article 2 encourages each signatory to establish high labour standards, there is no mechanism to ensure that these standards are met. Indeed, the definition of “labour standards” in Article 49 notes that standards for minimum wages and child labour “shall not be subject to obligations under this Agreement.”17 Critics correctly point out that the NAALC is essentially a cooperation agreement. It does not set minimum standards or adopt basic labour rights, such as those defined by International Labour Organization conventions.18 Disputes under the NAALC are subject to a process similar to that of the NAAEC. In the first stage, one signatory provides notification of a pending labour challenge. After both NAOs produce requested information, repre-

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sentatives meet in an attempt to resolve the dispute. If meetings at the NAO level do not provide a solution, either party, under Article 22, can request a meeting at the ministerial level. The NAAEC, however, sets a sixty-day time limit, whereas there are no similar provisions for this stage of the NAALC dispute process. If cooperative consultation fails, an Evaluation Committee of Experts (ECE) can be requested. Article 23, however, stipulates that this committee does not have the authority to rule on non-trade issues or those covered by mutually recognized labour laws.19 The same article requires a “pattern of practice” be identified as defined in Article 11 of the NAALC. All of these provisions set a rather rigorous test for convening an ECE.20 If these requirements are met, an ECE is established consisting of a chair and two other members selected from a mutually acceptable roster. The ECE can consider formal reports from a number of sources, including the secretariat, the NAO of each party, the public, and any organizations or individuals with relevant expertise in its deliberations. Article 25(1) outlines a 120-day time limit for the ECE to table a draft report; however, it also notes that the council can extend this period if required. A final report by the ECE is to be tabled within sixty days of the draft report, but Article 26 allows the council to indefinitely postpone its submission. Also, either party has ninety days to offer a written response to the final report, if it is ever submitted; the signatories then must wait until the next regular session of the council (usually annual) before the issue is considered in its entirety. At this stage the Council has the authority to place the matter under an indefinite period of review.21 If either state is not satisfied with the ECE’s final report, a written request can be submitted to the council. Before an arbitration panel can be convened, however, another series of requirements must be met. Under Article 28(5) the council has the authority at this time to decide whether a matter is more properly covered by another agreement. Article 29(1) also stipulates that the council requires a two-thirds vote before an arbitration panel can be convened. The same article’s “persistent pattern” threshold poses an additional obstacle.22 If these conditions are satisfied, however, an arbitration panel is created, consisting of a chair and four other qualified members. The panel, which follows procedures similar to those of the NAAEC, must submit a report within 180 days; however, this deadline too can be extended. Each party then has thirty days to respond to the panel, which then has sixty days to draft a final document unless the deadline is yet again extended. If the panel concludes that there has been a violation of labour legislation, both members can attempt to meet and devise an appropriate “action plan” as outlined in Article 38. The NAAEC and the NAALC have similar limitations. The NAALC limits the scope of what ECEs can review; it dictates a lengthy process for convening arbitration panels; and the council can stop the dispute at any number of

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stages. Moreover, the NAALC punishes governments rather than specific businesses, which again raises questions about how much of a deterrent these penalties are. One significant difference between the two agreements is that NAALC fines are paid into a Labour Commission fund designed to improve labour law enforcement in the country targeted in the complaint. The council spends these funds on a consensus basis, which grants each signatory a veto on their allocation.23 Once again, the labour Side Deal makes specific reference to the provinces. Canada is not allowed to request an ECE or a dispute panel for the benefit of any province not bound to the agreement. Furthermore, Annex 46(4) stipulates that Ottawa must verify that a labour matter is under federal jurisdiction if a province has not been declared part of the agreement. If so, the federal government and the applicable provinces must then account for at least 35 percent of Canada’s labour force. If a matter concerns a specific industry, 55 percent of the workers must be employed in provinces complying with the NAALC.24 These provisions make it a fair assumption that the NAALC is less intrusive into areas of provincial jurisdiction than the NAAEC. The Provinces and the Side Deal Negotiations Canadian provinces played an active role in negotiating the NAFTA accords on labour and the environment. The NAAEC and the NAALC were not international trade obligations per se; they did, though, arguably represent one of the most direct links between economic regimes and provincial jurisdiction. Past judicial rulings – Labour Conventions, for example – had legitimized labour as an area of provincial responsibility. Though existing case law was less definitive on environmental issues, several officials made it clear that NAAEC compliance would be based on provincial interests. As one federal bureaucrat noted, it was understood that “the provinces carried a big stick on labour and the environment and the turf situation was pretty clear.” In the words of the same official, the federal government required “provincial expertise and it ... [made] sense to get as many [provinces] on board as early as possible.”25 The provinces received all Mexican and American position papers and were involved in the drafting of Canadian proposals during the negotiations. The provinces were also invited to Washington in August 1993 for the final phase of discussions. As it turned out, six provinces attended various stages of the talks, and Alberta and Quebec were present for the entire period. Provincial representatives were involved in daily or twice daily meetings with federal officials to discuss the US and Mexican submissions. According to one participant, the provinces “definitely had an impact on changes that were made to the text of the agreements.” They were clear about “what was acceptable or desirable from a provincial perspective and these considerations were included in Canadian proposals.” This representative suggested that

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Annex 41 of the NAAEC and Annex 46 of the NAALC were examples of this influence, which was greater than enjoyed by US and Mexican states.26 Furthermore, provincial involvement was not limited to the Side Deal negotiations. To commit as many of the provinces as possible, Ottawa entered into negotiations for a compliance agreement between the two levels of government. Tom Hockin, Canada’s trade minister, publicly acknowledged the importance of the provinces and called for a formal understanding with provincial governments “wishing to take on the obligations and ... benefits of the agreements.”27 Initially, the provinces supported Ottawa’s efforts; they submitted draft proposals for both accords in the summer of 1993. As NAFTA negotiations neared completion, however, the provinces tabled two additional drafts. By March 1994 they had submitted a total of six proposals. For the most part, the provincial proposals supported an arrangement where Ottawa and the provinces would be “jointly responsible” for Canadian positions in both the NAAEC and the NAALC. Some provinces even pushed for a process whereby the support of a certain number, or percentage, of provincial governments would be required in order to reach a consensus.28 Other provincial governments called for more formalized linkages under which previous “consultation” would give way to formal “participation.”29 By the time Ottawa developed its first draft text, which involved input from a number of federal departments, there were significant differences between the two levels of government. Also at this point some federal officials began to question the relevance of both the Side Deals and the compliance negotiations. One federal policy adviser declared that “regardless of what the provinces may say these negotiations are ... a ‘political’ courtesy” and not a constitutional obligation. “Let’s face it,” he continued, “the Side Deals are just not that significant.”30 As federal-provincial negotiations continued, owing mainly to limited bureaucratic resources, several provinces began to question the need for greater institutional ties. As noted earlier, the provinces were also reluctant to expose resource management and other domestic policies to complainants in other states. The fact that provincial governments had no official standing within the dispute settlement process was also a concern. As a result, several provinces made it clear that they had no intention of being bound to the Side Deals as outlined in Annex 46 of the NAALC and Annex 41 of the NAAEC. Ultimately, however, official compliance agreements were negotiated between Ottawa and the provinces for both Side Deals. The Canadian Intergovernmental Agreement (CIA) Regarding the NAAEC was negotiated in 1995; it came into force when Alberta became the first province to ratify it. As part of the CIA, a Canadian National Advisory Committee (NAC) was established consisting of senior cabinet ministers from both levels of government. As of 2006, Ottawa was considering “various options for establishing a new Canadian National Advisory Committee.”31 A similar federal-provincial

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agreement was finalized for the NAALC. The Canadian Intergovernmental Agreement Regarding the NAALC had a mandate similar to that of its NAAEC equivalent, one designed to offer provincial signatories a forum for discussing labour issues related to the Side Deals or potential violations in other NAFTA states. Currently, only a handful of provinces have ratified either agreement. Alberta was the only province to sign the NAALC in 1995; then in December 1996, Quebec signed, followed by Manitoba in January 1997. Prince Edward Island soon followed. In terms of the NAAEC, only Alberta, Quebec, and Manitoba have ratified the agreement. It was first believed that the lack of provincial participation would limit the relevance of the environmental accord in Canada. As the next section points out, however, the CEC has initiated several reviews targeting provinces that are non-signatories. For the purposes of this discussion, these cases offer an opportunity to evaluate the intrusiveness of the Side Deals, the capacity of provinces to protect specific interests, and the role of new and evolving multilevel governance structures. The Side Deal Dispute Resolution Process: Implications for Canadian Provinces The Commission for Labour Cooperation (CLC), established by the NAALC, has focused mainly on occupational safety and health, workers’ rights and productivity, and employment and job training. Most submissions to the CLC have targeted Mexico rather than Canada or the United States. Only twenty-three submissions were received under the NAALC between its inception and 2003. Fourteen of these were directed at Mexico (two were withdrawn and one declined), seven at the US (two were declined), and two at Canada (one was declined). No trade-related cases focused on provincial labour practices.32 Clearly, the NAALC has had only a minimal impact on Canadian provinces. The policies of provincial governments, including non-signatories, have also come under the CEC’s scrutiny. Since 1997 the CEC has investigated complaints related to forestry, mining, and hydro practices in BC and Ontario. Other challenges have been launched against Alberta (Oldman River) and Quebec (hog farms and automobiles). These investigations are “citizen submissions” as enabled by Articles 14 and 15 of the NAAEC. Such complaints allow societal actors to challenge provincial practices by targeting areas of federal jurisdiction as applied to subfederal activities. In the case of BC Mining, the Sierra Club, the Environmental Mining Council of BC, and the TAKU Wilderness Association challenged mining practices at the Tulsequah Chief, Mount Washington, and Britannia mines. The complaint stated that these mines were dumping toxic substances into waterways, causing environmental damage in violation of the federal Fisheries Act. It further noted that these problems, which reduced salmon stocks

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and created “trade or market distortions,” were linked to staff reductions and budget cuts in Environment Canada. Ultimately, a Factual Record was produced by the CEC; however, these results related solely to the Britannia Mine, given that the Tulsequah Chief and Mount Washington projects both faced pending legal action.33 The BC Mining case highlights the collegial working relationship that BC had developed with Ottawa. In terms of the Britannia mine, many of these linkages predated both NAFTA and the NAAEC. The province had taken action against Britannia many times in the past for environmental violations. Though the mine had ceased operations in 1974, the 210-kilometre tunnel system still contained high levels of acidic and metal-laden effluent, which was being discharged through a submerged outflow directly into Howe Sound. According to the Factual Record, one Environment Canada employee called Britannia “the single-worst point of metals pollution in North America.”34 Owing to these problems, the provincial Ministry of the Environment, under the province’s BC Pollution Control Act and its replacement, the Waste Management Act, issued Copper Beach Estates, which had purchased the mine in 1979, “effluent remediation orders” in 1981, 1993, and 1999. Environment Canada, in conjunction with the provincial government, provided funding for monitoring and related studies between 1995 and 2000. The company had entered bankruptcy protection in 1994; even so, it agreed in a provincial MOU to build an effluent treatment plant for the site, to be financed by other proposed real estate developments. In 2001, however, Copper Beach Estates rejected this agreement.35 There are several reasons why federal-provincial cooperation on environmental issues existed prior to the CEC. First, case law related to this issue area historically attempted to balance federal and provincial interests; this served to grant legitimacy to both levels of government. In addition, well before NAFTA, Ottawa and the provinces had begun harmonizing Canadian environmental laws to avoid duplication and overlap. This began in the 1970s with the negotiation of a series of federal-provincial administrative accords, which, as Kathryn Harrison has noted, effectively gave the provinces oversight related to environmental policy while relegating Ottawa to a “supportive” role in terms of research and budgetary assistance. Federal-provincial tensions emerged in 1988 when Ottawa attempted to implement national standards through the Canadian Environmental Protection Act (CEPA).36 In response, during the brief tenure of Prime Minister Kim Campbell, the Canadian Council of Ministers of the Environment (CCME) began to lobby for federal-provincial harmonization on environmental matters.37 The result was a draft federal-provincial Environmental Management Framework Agreement, which eventually became the Canada-Wide Accord on Environmental Harmonization. According to Harrison, the new consensus closely reflected the bilateral accords of the 1970s. Specifically, the provinces assumed “the lead

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in implementing national standards” while Ottawa pursued “responsibility only for federal lands and matters concerning international boundaries and agreements.”38 Given these developments, it would appear that a pattern of “cooperative federalism” existed regarding international trade and the environment. Though some observers have suggested that these relationships were threatened during the negotiation and implementation of the Kyoto Protocol, it is clear they did not damage federal-provincial coordination as it related to the BC Mining dispute.39 There is also the reality that under the “Habitat Protection and Pollution Prevention Provisions Compliance and Enforcement Policy” of the Fisheries Act, Environment Canada had the authority to “consider enforcement actions of other levels of government” related to any alleged violations.40 Thus, though non-governmental submissions targeting provincial non-signatories appear to be an attempt to hold the provinces accountable to international commitments, this is not always the case. For BC Mining, the CEC’s decision to publish a Factual Record, which recommended the completion of a water treatment facility at Britannia, did not represent a significant level of intrusiveness. This ruling did not force either level of government to engage non-traditional issue areas or to enter into a dramatically altered federal-provincial relationship. Clearly, a domestic environmental regime had been evolving prior to NAFTA. Though international pressures generated by the CEC introduced a new dynamic, the CEC also reinforced already existing norms and standards. The BC Hydro CEC citizen submission reinforces these conclusions. In this case, initiated in 1997, the Sierra Club, the BC Wildlife Federation, and the BC Aboriginal Fisheries Commission accused the provincial Crown corporation of ignoring environmental damage to fish habitat related to hydroelectric projects. Specifically, these groups argued that the Canadian Department of Fisheries and Oceans (DFO) was aware of problems but had sponsored only two charges under the Fisheries Act dating back to 1990. The submission also accused the National Energy Board of failing to respond to a report by the BC Wildlife Federation regarding environmental problems related to the export of energy. The complaint suggested that as a result, BC Hydro had an “unfair advantage” over American hydroelectric producers.41 In the Factual Record published in June 2000, the CEC ruled against Canada and encouraged BC Hydro to change its environmental practices. BC had no official standing in the dispute process; however, there was considerable interaction between federal and provincial stakeholders during the investigation. For the most part, these linkages built on already existing consultative relationships related to fishery policy in the province. Following the publication of the Factual Record, federal-provincial consultation continued as both levels of government reviewed past practices.42

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The third CEC submission related to BC, BC Logging, was similar to the two previous cases in several ways. Here, the David Suzuki Foundation, Greenpeace Canada, the Sierra Club, and the Northwest Ecosystem Alliance National Resources Defence Council together challenged provincial logging practices under the Fisheries Act. As with BC Mining, the main issue was the dumping of hazardous materials and the threat this posed to fish habitat. The complainants focused on three specific TimberWest Forest Products logging operations: Sooke River, Martins Gulch, and DeMamiel Creek. They argued that the federal government was openly discouraging them from launching private prosecutions, which are allowed under the Fisheries Act.43 In the published Factual Record, the CEC ruled that it did not have the authority to review the practices of provincial non-signatories when those activities occurred on provincially owned land, which in this case was subject to BC’s Forest Practices Code. The panel also refused to rule on the requested disclosure of information related to past violations of provincial statutes. Thus the BC Logging decision is an example of the “selective” intrusiveness of specific CEC decisions. Not only is publicly owned land subject to exclusion, but in some cases the rulings of federal and provincial agencies are also considered invalid.44 Ontario, which is a non-signatory to the NAAEC, first came under the scrutiny of the CEC dispute process in February 2002. In this case, nongovernmental interests, including the Canadian Nature Federation, the Canadian Parks and Wilderness Society, and the Sierra Club, questioned Ontario’s commitment to the 1994 Migratory Birds Convention Act. Provisions of that act make it an offence to “destroy or take a nest or egg of a migratory bird without a permit.” The complaint argued that clearcut logging had “destroyed over 85,000 migratory bird nests in the areas of Central and Northern Ontario.”45 In October 2004 the same parties launched a second challenge, this time focusing on the non-disclosure of statistics related to provincial logging practices.46 The CEC’s council consolidated Ontario Logging I and II in April 2005. Throughout the dispute, Canada argued for the dismissal of the complaints given that Environment Canada, and not the provincial government, was responsible for enforcing the Migratory Birds Convention. Ontario, which was asked to comment on early drafts of the Factual Record, supported this position. The final Factual Record, produced in June 2006, was implicitly critical of federal and provincial environmental practices; but because of the jurisdictional concerns, it did not offer explicit recommendations. The CEC has also examined environmental practices in Alberta and Quebec, two provinces that did ratify the CIA. In Alberta, the Friends of the Oldman River launched three separate complaints under the CEC’s citizen submission process. In the first case, filed in 1996, the panel refused to consider

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the request and the dispute was terminated. In 1997 the same group filed a second challenge, which did result in the publication of a Factual Record. The Oldman River II submission was based on alleged environmental violations related to Sunpine Forest Products’ construction of roads and bridges in the Rocky Mountain foothills. The claim contended that the DFO had abdicated its responsibility for fish habitat protection under the Fisheries Act. In its response, Ottawa argued that provincial legislation was adequate to deal with enforcement issues. But a separate judicial ruling disagreed, and the Federal Court of Appeal then ruled that federal agencies – in this case the Canadian Coast Guard – had the authority to monitor the Oldman River project in conjunction with provincial enforcement mechanisms. The Supreme Court of Canada reached a similar conclusion regarding shared federal-provincial responsibility for the Oldman River, as did the CEC panel. A third complaint targeting the Oldman River was submitted in September 2004 but was not pursued owing to the expiration of the NAAEC’s thirty-day limit as outlined in Article 14 of the agreement.47 The CEC dispute process also reviewed two submissions related to Quebec’s environmental practices. The first, filed in 1997, challenged alleged violations tied to hog production. The CEC’s Citizen Submissions on Enforcement Matters rejected this review. The most recent complaint related to Quebec was filed in November 2004. In this case the Quebec Association Against Air Pollution argued that the province had failed to enforce its own automobile emission legislation, which had been in place for almost two decades. It also contended that convictions were negligible and that budget allocations for enforcement and training were inadequate. The submitting party called for mandatory automobile inspection. In September 2006 the CEC requested additional information from all parties for the preparation of a Factual Record. There were no further developments as of February 2008.48 Multilevel Governance and Provincial Autonomy: Evaluating the Side Deals The NAFTA Side Deals are examples of the increasing convergence of trade policy with non-traditional issue areas such as labour and the environment. When these agreements were added to NAFTA, they generated considerable criticism. As noted earlier, these concerns related to Article 23(5) of the NAAEC, which allowed the CEC to “deflect” complaints to other forums, and Article 24(1), which established a high standard of proof based on a “persistent pattern of failure.” Critics also pointed to potential problems related to timeliness, transparency, and access. In terms of Canadian provinces, specific questions were raised regarding Article 45(2)’s definition of “environmental law” and its potential exclusion of provincial resourcemanagement policies. Others doubted whether the provinces would ratify

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the agreements owing to a lack of representation in the dispute process. There were fewer criticisms of the NAALC in relation to Canadian provinces, mainly because it was recognized that provincial governments, especially non-signatories, were unlikely to be targeted. In retrospect, many of these concerns have been unwarranted. Though the CEC had the right to “avoid” potentially sensitive environmental complaints under Article 23(5), there is no evidence that this happened in relation to Canadian provinces. It is possible to reach a similar conclusion regarding the need to establish a “persistent pattern of failure” as defined by Article 24(1). Specifically, though the CEC dismissed complaints such as “Oldman River I” and “Quebec Hogs,” this criterion was not used to exclude provincial practices. Moreover, disputes to date have not targeted Article 45(2)’s definition of environmental law. At the same time, it is interesting that several CEC cases, such as Oldman River II, reached conclusions consistent with past domestic judicial rulings urging a balance between federal and provincial responsibilities. This suggests a reluctance to contradict domestic regulatory decisions based on judicial precedent. Finally, initial criticism related to the lack of provincial representation in terms of dispute settlement was unwarranted. In BC Mining, for example, the provincial government was extensively involved in all stages of the dispute process. Similar engagement is also apparent in other disputes, such as BC Hydro and Ontario Logging.49 Concerns related to timeliness and transparency do, however, have merit. As noted in a recent CEC review, the dispute process tends to be extremely slow and complaints can take more than two years to resolve. Sometimes this is because the secretariat has to deal with a large number of Article 14 and 15 submissions. Other times the problem is delayed responses from business and other non-governmental interests. Regardless, according to the CEC, increased staffing and funding is required, especially for the secretariat. Though the citizen submission process was designed to increase transparency and access, some aspects of the NAAEC have come under criticism – specifically, Articles 39 and 42, which restrict access to confidential proprietary and national security information. Furthermore, once a complaint has been filed there are no opportunities for non-governmental interests to re-engage the process. And there are other questions related to the council’s sole discretionary right to determine whether a case should proceed to a Factual Record.50 The most significant problem related to the provinces and the NAAEC, however, is the lack of a binding enforcement mechanism. Specifically, Factual Records resulting from citizen submissions are not subject to financial penalties.51 Yet it would be a mistake to dismiss the environmental accord as irrelevant. In fact, there is evidence that the NAAEC has added to an evolving governance structure related to both trade and the environment.

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At the domestic level the development of internal compliance mechanisms for the Side Deals has contributed to a number of new norms and standards, despite a lack of provincial ratification. Even more important, perhaps, is that a Canadian environmental regime was in place before the Side Deals were negotiated. Specifically, Ottawa and the provinces had established a consistent pattern of dialogue and contact regarding international environmental issues well before those negotiations. The existence of these governance standards was evident in the extensive federal-provincial consultations during BC Mining, BC Hydro, and Ontario Logging – three disputes that involved non-signatories to the NAAEC. It can also be argued that evolving environmental regimes at the international level reinforced domestic norms and standards before the Side Deals were negotiated. Canada, for example, was a signatory to the 1909 Boundary Waters Treaty between the United States and Canada and the Migratory Birds Convention in 1917. Subsequent agreements included the 1987 World Commission on Environment and Development (the Brundtland Commission) and the 1992 UN Conference on Environment and Development (the Rio Summit). The UN Framework Convention on Climate Change (UNFCC) and the subsequent Kyoto Protocol of 1997 were obvious extensions of this international agenda.52 International commitments were further reinforced by a number of bilateral regional agreements with the United States, including the International Joint Commission and the Great Lakes Charter. Also, the provinces have actively pursued environmental issues in a number of functional cross-border forums, such as the Conference of New England Governors and Eastern Canadian Premiers, the Council of Great Lakes Governors, and the Western Governors Association. Some observers have suggested that the Side Deals – especially the NAAEC – represent a new level of multilevel governance for environmental issues. Kirton, for example, noted in 1997 that an “institutional deepening” of the NAAEC was under way and was helping foster a new trilateral environmental regime in North America.53 And in 2002, Mark Winfield suggested that the CEC had become a “highly successful” regional governance structure in the context of this emerging trilateral environmental framework.54 Debora VanNijnatten has argued that contacts among professionals and nongovernmental interests throughout North America have contributed to the formation of “epistemic communities,” which are contributing to the development of international norms and standards.55 While it is difficult to deny the emergence of “new” trade-related environmental governance frameworks, it is important to keep these developments in perspective as they relate to Canadian provinces. Even Kirton has acknowledged that ratification of the NAAEC by provincial governments was essential if the regime was to have significant legitimacy. Kirton and Don Munton have also pointed out that the CEC is not involved with the broad

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range of functional relations between Canadian provinces and American states, which often focus on environmental concerns.56 The limited intrusiveness of the CEC is also evident in citizen submissions targeting provinces under Articles 14 and 15. In some cases, such as BC Logging, the final Factual Record refused to rule on several recommendations forwarded by the council dealing with publicly owned land. Examples of selective intrusiveness were also evident in other complaints, such as Ontario Logging and BC Mining. Finally, and perhaps most important, there are questions related to the lack of effective enforcement mechanisms for citizen submissions. To date, environmental complaints aimed at provincial governments have all come under Articles 14 and 15. These outcomes have undoubtedly contributed to improved transparency and access, but they are not binding on Canadian provinces, signatories or non-signatories, in any tangible way. Thus, as Jeremy Wilson has argued, it is necessary to “carefully qualify any optimism about the impact or potential of [the NAAEC or] the citizen submission process.”57 So it is possible that any future influence of the NAAEC, at least in relation to Canadian provinces, will be in terms of a “preventative” regulatory regime. In this scenario the policies of the federal and provincial governments might be altered “in advance” so as to head off environmental challenges. Furthermore, Articles 14 and 15 have problems related to enforcement, and the dispute process requires a significant commitment of time and resources. In some cases there are also potential economic implications. The Britannia mine, for example, which is located on the Sea to Sky Highway linking Vancouver to Whistler (the host of the 2010 Olympics), is being promoted by the BC Mining Association as a potential tourist attraction. The problem is that private and public interests are reluctant to involve themselves owing to the costs associated with environmental problems at the site.58 While financing concerns are not directly related to the CEC’s Factual Record, they have been a contributing factor. Clearly, then, provinces do face potential economic penalties associated with environmental complaints, however ineffective the enforcement mechanisms under Articles 14 and 15. Conclusion The NAFTA Side Deals on labour and the environment provide some insight on the future direction of international trade agreements. As economic regimes become more intrusive they will continue to encompass areas of domestic jurisdiction not traditionally associated with past negotiations. The NAAEC and NAALC are significant in that they are the first North American agreements designed to focus on domestic labour and environmental standards. They have also added a new dimension to Canadian federalism, as apparent in the need for provincial ratification as outlined in both the NAAEC and the NAALC. Yet it is important to recognize the limitations of both

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agreements in relation to Canadian provinces. The NAAEC has allowed the practices of provincial non-signatories to be targeted, but these cases do not represent a multilevel governance structure that significantly restricts the autonomy of Canadian provinces. Though the Side Deals are examples of international rule making, Articles 14 and 15 have not established a dispute settlement process with binding penalties or mechanisms of enforcement. Furthermore, panel findings have failed to contradict existing judicial precedent in Canada. Ultimately, the NAAEC’s intrusion into the provinces, to the extent that happens, will take the form of a “preventative” regulatory regime, as opposed to direct challenges to existing provincial practices. There is no evidence that these governance practices will evolve beyond basic functional arrangements.

Conclusion

This book has examined the impact of international trade regimes on Canadian provinces. Over the past several decades, foreign trade agreements such as the General Agreement on Tariffs and Trade (GATT), the North American Free Trade Agreement (NAFTA), and the World Trade Organization (WTO) have focused increasingly on areas of provincial jurisdiction. These commitments cover a broad range of domestic policy space, including investment, services, government procurement, national health and safety standards, and environment and labour concerns. As a result, Ottawa must now consider issues of provincial compliance when negotiating and implementing these agreements. These objectives have created challenges for the federal government both at the international level and within Canadian federalism. As Part 1 suggests, Canadian provinces have maintained significant autonomy in response to these international pressures. Provincial trade patterns did not change dramatically in the wake of the Canada-US Free Trade Agreement (FTA), NAFTA, and WTO. The United States remains the dominant trading partner for Canadian provinces, and statistics confirm the highly specialized nature of provincial exports. Not surprisingly, these realities have provided an incentive for Ottawa to protect specific subfederal interests in foreign trade negotiations, and this has reinforced Canada’s fragmented political economy. Other influences on Canadian federalism, such as fiscal policy, regional development strategies, and historic conflicts over natural resources, have also contributed to the long-term decentralization of federalprovincial economic relations. Sectoral priorities have been embedded for decades, and this has established dominant ideas that have contributed to provincial identity and political culture. The British North America (BNA) Act enhanced the international legitimacy of the provinces. Canada’s constitution makes limited reference to international relations. As a consequence, clarification of federal and provincial powers is tied to precedents outlined by the Judicial Committee of the Privy

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Council and the Supreme Court of Canada as they relate to treaty making; trade and commerce; peace, order, and good government; and the criminal law power. For the most part, these decisions affirm federal control over the negotiation and implementation of foreign trade and environmental agreements, control that is further reinforced by provisions of international law such as the Vienna Convention on the Law of Treaties and federal-state clauses in the WTO and NAFTA. Yet many of these decisions have extended Canadian provinces the right to intervene on international matters when those matters are relevant to provincial jurisdiction. The institutions of Canadian federalism have responded successfully to these international and domestic pressures. The expanding relevance of the provinces in this policy area motivated Ottawa to establish a federalprovincial committee system on international trade. Starting with the Tokyo Round of GATT, Canada adopted the principles of executive federalism with the goal of fostering consultations between the two levels of government. Initially, these contacts occurred as part of the Canadian Trade and Tariffs Committee, which was later supplemented by a Canadian Coordinator for Trade Negotiations. Still later, this framework evolved into the Committee for the Free Trade Agreement and the Committee for North American Free Trade Negotiations, which then evolved into CTrade. Though some provinces have expressed concerns about this forum, CTrade is now accepted as a consultation mechanism for matters of international trade. There are also ad hoc sectoral discussions and various limited engagements related to mutual recognition agreements. Despite these improvements, Quebec and Alberta have recommended a more formalized role for the provinces when international trade agreements are being negotiated and implemented. Other provinces – and the federal government – are less enthusiastic about institutionalized mechanisms for provincial compliance. Part 2 of this book explores issues of process and outcome when provincial foreign-trade policy is being formulated. It focuses on institutional, sectoral, societal, and ideational factors. Surprisingly, provincial political executives are somewhat marginalized in the policy process. Though several provinces have adopted institutional reforms to centralize decision making, the political executive has only a selective interest in this complex issue area. In fact, executive involvement at the provincial level is typically limited to crisis situations, the late stages of international negotiations, trade missions, and high-profile trade disputes such as softwood lumber. Even when there has been direct executive involvement – for example, in Ontario and BC during the NAFTA negotiations – this has not resulted in significant changes to either Canadian foreign trade policy or the final content of the agreement. Provincial legislatures also play a minor role, except when it comes to ratifying some international agreements and enacting institutional reforms. For the most part this is a result of party discipline, a lack of legislative activity

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in this policy area, and the failure of most voters to identify with international trade at the constituency level. The bureaucracy is a significant factor. Provincial bureaucrats contribute to policy outcomes related to Canada’s foreign trade relations and international norms and standards. The small number and long tenure of provincial trade officials grants these individuals considerable influence. Many provinces have adopted a more centralized bureaucratic model whereby these representatives are housed in ministries of intergovernmental affairs, but the priority of these departments is typically investment and promotion, not trade policy. At the same time, it is clear that almost all provinces suffer from a lack of bureaucratic resources and would benefit from increased budgets and staffing. The “legalization” of trade policy, and the increasingly prominent role of outside legal counsel, has added to the financial burdens on provincial bureaucracies. As a result, several provincial line departments have developed an increased interest and expertise in foreign trade policy. Alberta and a small number of other provincal governments have established coordinating mechanisms to facilitate bureaucratic cooperation; in most other provinces, cooperation is mainly ad hoc. Sectoral factors also contribute to the foreign trade policy of Canadian provinces. It would be too simplistic to call this a client-patron relationship, with governments responding to industry’s demands, but provinces do actively protect sectors crucial to regional and provincial political economies. These domestic interests can also influence international norms and standards. Regarding agriculture, Canada’s refusal to accept American proposals to alter Article 2.2 of the WTO’s Agreement on Subsidies and Countervailing Measures (SCM) was directly tied to provincial subsidy programs. Other provincial priorities have included Article 11 of the SCM, relating to the investigation of subsidy complaints, and Article 8.2, which protects exemptions for regional development programs. Similar examples exist in NAFTA’s treatment of services. Annex I of NAFTA, for example, excludes provincial healthcare measures in existence prior to 1994. Ottawa has also aggressively protected NAFTA’s Social Service Reservation as it relates to provincial health care, though BC’s demands for broader WTO exemptions were ultimately rejected. The New World Wine Accord and the 2003 agreement between Canada and the EU on labelling and market access also reflect Ottawa’s sensitivity to provincial interests. However, NAFTA Chapter 11 decisions, such as Ethyl Corporation, have resulted in “preventative” regulatory regimes under which provincial governments have rejected policy options based on potential liabilities (e.g., public automobile insurance in New Brunswick). In addition, the lack of formalized consultative linkages, such as the federal International Trade Advisory Committee (ITAC) and the Sectoral Advisory Groups on International Trade (SAGIT) processes, has limited the impact of provincial sectoral interests. Indeed, government-business contacts vary

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from province to province and among sectors, and in some cases even within industries. Though one could argue that Ottawa has improved contacts with societal interests over the past decade, it is clear that these actors have had a limited impact at the provincial level. In Ontario, First Nations have enjoyed some success in the forestry sector, and agriculture has come under increased scrutiny from environmental groups, but the provincial government continues to rely on input from industry. Quebec, for its part, initiated institutionalized consultative forums under the Parti Québécois (PQ ), though Jean Charest and the Liberals have since shifted to a consultative model that is less inclusive. In BC, the New Democtratic Party (NDP) governments of Michael Harcourt and Glen Clark were more responsive to societal pressures, especially from labour groups and environmentalists, though this has diminished since the election of Gordon Campbell’s Liberals in 2001 (the exception here, arguably, being Aboriginal interests). Differences aside, several common themes define provincial government-societal relations. First, any contact that does occur is directed at line departments rather than at officials specifically responsible for trade policy. Also, interactions tend to occur as part of broader federal consultative initiatives. In addition, some societal interests are marginalized owing to the perception among bureaucrats that the public at large does not understand international trade. The limited impact of societal interests can also be tied to limited resources and consultation fatigue. Regardless, these realities raise obvious normative concerns linked to transparency and access. The presence of dominant ideas within provinces does have a direct impact on provincial foreign trade policy. Dominant ideas sometimes include economic and political factors, especially as they relate to sectoral interests and participatory democracy. It is also apparent, though, that historical ideological traditions are important considerations. In BC, Social Credit and Liberal governments have long adopted policy platforms consistent with market liberalism, and by the 1990s even the NDP had shifted to a pro-growth economic policy. In Alberta, the dominant ideological tradition has been consistent with neoliberal principles, and this has limited disputes within government regarding a market-based trade policy. Ontario, much like BC, has had distinct and often conflicting ideological traditions, though over the past two decades the Liberals, the NDP, and the Conservatives have all drifted to the right on the political spectrum. Finally, Quebec has consistently responded to international pressures based on broader goals of autonomy within Canadian federalism. Over the past four decades this has resulted in significant restructuring of state-owned companies and shifting attitudes toward US trade and investment. Several conclusions can be reached, then, regarding the relevance of domestic process factors, especially as they relate to international and domestic

Conclusion 197

outcomes. For the most part, institutional, sectoral, and ideational considerations dominate societal interests, albeit with several caveats. In terms of institutional matters, bureaucratic actors are consistently more relevant to the formulation of provincial foreign trade policy, though executive influence is apparent in crisis situations, trade promotion, and high-profile trade disputes. Also, industry’s priorities are taken seriously, though not surprisingly, this tends to “wobble” depending on the economic importance of the sector and the existence of historic linkages between business and government. Societal actors have had the least impact for a number of reasons, including the failure to target appropriate provincial representatives. Dominant ideas within provinces, on the other hand, are relevant, especially in terms of sectoral priorities and the role of non-governmental actors, though there is evidence that intrusive neoliberalism has challenged provincial ideological traditions. Finally, Part 3 of this book suggests that evolving regimes provide insight into change, especially in the context of North American integration. In this context, two cross-border regimes were evaluated to determine whether they deviated from traditional power-or interest-based approaches. In evaluating functional ties associated with forums such as the Council of Great Lakes Governors, and the Pacific Northwest Economic Region, it is possible to reach a number of conclusions. First, the increased transnational interactions of subfederal governments have fostered an additional layer of multilevel governance in North America. Also, the participation of executive, legislative, and bureaucratic officials has contributed to the “internationalization” of executive federalism. Though provincial input varies from one organization to the next, it is apparent that provinces have contributed to the development of these governance structures in terms of agenda setting and formal bilateral agreements. At this stage, however, there is no indication that these linkages represent fundamental change to state autonomy, especially as a potential catalyst for continental integration. More specifically, it is doubtful that these ties will evolve beyond functional relations or into a system of supranational governance. Similar conclusions can be reached regarding labour and environmental regimes in North America. Following the negotiation of the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labour Cooperation (NAALC), a number of observers suggested that these agreements would significantly alter cross-border relations. Since then, provincial governments (including non-signatories) have been targeted as part of the NAAEC’s citizen submission process. In none of these cases, however, has the emerging environmental regime directly challenged provincial autonomy. In most of the complaints, federal practices have been targeted (i.e., rather than provincial ones). Moreover, panel decisions have deferred to already existing norms and standards, and there has

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been a reluctance to contradict Canadian judicial precedent. Though the NAAEC has functioned as a “preventative” regulatory regime in some cases, it does not represent “significant” change as defined by this book’s analytical framework. In sum, neither cross-border governance structure examined in this study has significantly enhanced regulatory integration or contributed to the development of new binding continental dispute mechanisms. So in evaluating process, outcome, and change, there are interesting observations to be made regarding the role of the provinces in Canadian foreign trade policy. The first is that many of these developments reflect established realities in the global political economy. As Gilbert Winham has pointed out, tensions between markets and regulatory mechanisms predate the modern state system. Put another way, systemic pressures have always created challenges for states and other forms of social, political, and economic authority in an anarchic international system. In that regard, very little has changed in terms of “foreign” trade relations, though the contemporary system does represent a period of increasing intrusiveness into domestic policy space. These systemic factors have complicated the domestic policy process by empowering an increasingly diverse range of traditional and non-traditional actors. That said, most central governments – including Canada’s – have maintained the capacity to make independent policy. Though the provinces were initially excluded from these international commitments, issues of provincial jurisdiction are now an important part of foreign trade agreements. As already noted, selected institutional, sectoral, and ideational pressures have come to dominate provincial foreign trade policy. These provincial interests have often defined outcomes related to Canada’s global trade relations and specific international norms and standards, especially in areas such as services, agriculture, alcohol, energy, manufacturing, and softwood lumber. Thus it is clear that much like the federal government, Canadian provinces have come under increasing pressure from systemic influences – but not to a point that represents a significant loss of provincial autonomy. Yet at the same time, these developments do raise normative concerns related to transparency, access, and legitimacy. This book does not focus on these issues, but it does draw attention to their relevance. It also proposes the need for future studies to evaluate issues of class, gender, and fairness more thoroughly. Finally, as the last two chapters suggest, there is no current evidence of “significant” regime-based change related to provincial foreign trade policy. Specifically, new and existing norms and standards continue to focus on functional issues and do not directly challenge domestic regulations or judicial precedent. Cross-border regimes are also defined by traditional powerand interest-based considerations. These observations, and the long-term decentralization of Canadian federalism, however, raise broader questions

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regarding the “decline” of the Westphalian nation-state. If federal and subfederal governments possess a degree of autonomy, and the traditional form and practice of Canadian federalism has adapted to intrusive international pressures, it suggests a level of independence for the modern state that many critics dismiss. What is now required is to expand the scope of study beyond Canadian foreign trade policy. Though this book has focused on subfederal governments in Canada, it is also applicable to unitary states in the global political economy, as well as to those with other federal arrangements.

Notes

Chapter 1: The Role of Provinces in the Global Political Economy 1 Andrew Coyne, “Dismembering Canada,” Ottawa Citizen, 30 May 2006, A14. 2 Gerald Baier, “Judicial Review and Canadian Federalism,” in Canadian Federalism: Performance, Effectiveness, and Legitimacy, eds. Herman Bakvis and Grace Skogstad (Toronto: Oxford University Press, 2002), 24-39; and Christopher J. Kukucha, “From Kyoto to the WTO: Evaluating the Constitutional Legitimacy of the Provinces in Canadian Foreign Trade and Environmental Policy,” Canadian Journal of Political Science 38, no. 1 (2005): 129-52. 3 Robert Gilpin, Global Political Economy: Understanding the International Economic Order (Princeton: Princeton University Press, 2001); Stephen D. Krasner, Defending the National Interest: Raw Materials Investments and US Foreign Policy (Princeton: Princeton University Press, 1978); and Stephen Krasner, Sovereignty: Organized Hypocrisy (Princeton: Princeton University Press, 1999). 4 Adam Smith, The Wealth of Nations (London: Dent, Everyman’s Library, 1910). 5 John Maynard Keynes, The General Theory of Employment, Interest, and Money (New York: Harcourt, Brace and World, 1935). 6 David Mitrany, A Working Peace System (London: RIIA, 1943); Ernest Haas, The Uniting of Europe (Stanford: Stanford University Press, 1958); Robert O. Keohane and Joseph Nye, Power and Interdependence: World Politics in Transition (Boston: Little Brown, 1977); Robert O. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy (Princeton: Princeton University Press, 1984); and Kenneth Oye, ed., Cooperation Under Anarchy (Princeton: Princeton University Press, 1986). 7 Andreas Hasenclever, Peter Mayer, and Volker Rittberger, Theories of International Regimes (Cambridge: Cambridge University Press, 1997), 3-7. See also Christer Jonsson, “Cognitive Factors in Explaining Regime Dynamics,” in Regime Theory and International Relations, ed. Volker Rittberger (Oxford: Clarendon, 1993), 202-22. 8 John J. Mearsheimer, “The False Promise of International Institutions,” International Security 19, no. 3 (1994-95): 5-49; Joseph M. Grieco, Cooperation Among Nations: Europe, America, and Non-Tariff Barriers (Ithaca: Cornell University Press, 1990); and Duncan Snidal, “Relative Gains and the Pattern of International Cooperation,” American Political Science Review 85, no. 3 (1991): 701-26. 9 Keohane, After Hegemony. See also Edgar Grande and Louis Pauly, eds., Complex Sovereignty: Reconstituting Political Authority in the Twenty-First Century (Toronto: University of Toronto Press, 2005). 10 Hasenclever, Mayer, and Rittberger, Theories of International Regimes, 3-7. 11 Peter Gourevitch, Politics in Hard Times: Comparative Responses to International Economic Crises (Ithaca: Cornell University Press, 1986); and Robert D. Putnam, “Diplomacy and Domestic Politics: The Logic of Two-Level Games,” International Organization 42, no. 3 (1988): 427-60.

Notes to pages 6-8 201

12 Judith Goldstein and Robert O. Keohane, eds., Ideas and Foreign Policy: Beliefs, Institutions, and Political Change (Ithaca: Cornell University Press, 1993). 13 See also Anil Hira, “Regulatory Games States Play: Managing Globalization Through Sectoral Policy,” in Global Turbulence: Social Activists’ and State Responses to Globalization, eds. Marjorie Griffin Cohen and Stephen McBride (Aldershot: Ashgate, 2003) 41-58. 14 Karl Polanyi, The Great Transformation (Boston: Beacon, 1944). 15 John G. Ruggie, “International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order,” International Organization 36, no. 2 (1982): 195-231. 16 The first “consolidated” efforts to deal with the international activity of subfederal units occurred in Ivo D. Duchacek, ed., “Federated States and International Relations,” Publius 14 (1984); and Brian Hocking, ed., “Foreign Policy in Federal States,” International Journal 41, no. 3 (1986). 17 Ivo D. Duchacek, Daniel Latouche, and Garth Stevenson, eds., Perforated Sovereignties and International Relations: Trans-Sovereign Contacts of Subnational Governments (New York: Greenwood, 1988). 18 Hans J. Michelmann and Panayotis Soldatos, eds., Federalism and International Relations: The Role of Subnational Units (Oxford: Clarendon, 1990). 19 John Kincaid, “Constituent Diplomacy in Federal Polities and the Nation-State: Conflict and Cooperation,” in Federalism and International Relations, 54-76; and Francisco Aldecoa and Michael Keating, eds., Paradiplomacy in Action: The Foreign Relations of Subnational Governments (London: Frank Cass, 1999). 20 André Lecours, “Paradiplomacy: Reflections on the Foreign Policy and International Relations of Regions,” International Negotiation 7 (2002): 91-114. See also André Lecours and Luis Moreno, “Paradiplomacy: A Nation-Building Strategy?” in Conditions of Diversity in Multinational Democracies, eds. Alain-G. Gagnon, Montserrat Guibernau, and François Rocher (Montreal and Kingston: McGill-Queen’s University Press, 2003), 267-92. 21 Brian Hocking, “Introduction: Trade Politics, Environments, Agendas, and Process,” in Trade Politics: International, Domestic, and Regional Perspectives, eds. Brian Hocking and Steven McGuire (New York: Routledge, 1999), 3. 22 Brian Hocking, Localizing Foreign Policy: Non-Central Governments and Multilayered Diplomacy (New York: St. Martin’s, 1993); and Brian Hocking, ed., Foreign Relations and Federal States (Leicester: Leicester University Press, 1993). 23 Hocking, “Introduction: Trade Politics, Environments, Agendas, and Process.” See also Axel Hülsemeyer, Globalization and Institutional Adjustment: Federalism as an Obstacle (Aldershot: Ashgate, 2004). 24 Maureen Appel Molot, “Where Do We, Should We, or Can We Sit? A Review of Canadian Foreign Policy Literature,” International Journal of Canadian Studies 1, no. 2 (1990): 77-96. 25 David B. Dewitt and John J. Kirton, Canada as a Principal Power: A Study in Foreign Policy and International Relations (Toronto: Wiley, 1983); Stephen Clarkson, Uncle Sam and Us: Globalization, Neoconservatism, and the Canadian State (Toronto: University of Toronto Press, 2002); John W. Holmes, Canada: A Middle-Aged Power (Toronto: McClelland and Stewart, 1976); and Tom Keating, Canada and World Order: The Multilateralist Tradition in Canadian Foreign Policy, 2nd ed. (Toronto: Oxford University Press, 2002). 26 David R. Black and Heather A. Smith, “Notable Exceptions? New and Arrested Directions in Canadian Foreign Policy Literature,” Canadian Journal of Political Science 26, no. 4 (1993): 745-74. 27 Kim Richard Nossal, “Home-Grown IR: The Canadianization of International Relations,” Journal of Canadian Studies 35, no. 1 (2000): 95-114. 28 Mark Neufeld, “Democratization in/of Canadian Foreign Policy: Critical Reflections,” Studies in Political Economy 58 (1999): 97-119; Deborah Stienstra, “Can the Silence Be Broken? Gender and Canadian Foreign Policy,” International Journal 50, no. 1 (1994-95): 103-27; and Claire Turenne Sjolander, “Adding Women but Forgetting to Stir: Gender and Foreign Policy in the Mulroney Era,” in Diplomatic Departures: The Conservative Era in Canadian Foreign Policy, 1984-93, eds. Nelson Michaud and Kim Richard Nossal (Vancouver: UBC Press, 2001), 220-40.

202 Notes to pages 8-9

29 Gilbert R. Winham, The Evolution of International Trade Agreements (Toronto: University of Toronto Press, 1992), 131. 30 Frank Stone, Canada, the GATT, and the International Trade System, 2nd ed. (Montreal: Institute for Research on Public Policy, 1992), 1. 31 Sylvia Ostry, The Post-Cold War Trading System: Who’s on First (Chicago: University of Chicago Press, 1997). 32 Andrew F. Cooper, Richard A. Higgott, and Kim Richard Nossal, Relocating Middle Powers: Australia and Canada in a Changing World Order (Vancouver: UBC Press, 1993), 9. 33 Robert Wolfe, Farm Wars: The Political Economy of Agriculture and the International Trade Regime (New York: St. Martin’s, 1998). 34 Maxwell A. Cameron and Brian W. Tomlin, The Making of NAFTA: How the Deal was Done (Ithaca: Cornell University Press, 2000); G. Bruce Doern, Leslie A. Pal, and Brian Tomlin, eds., Border Crossings: The Internationalization of Canadian Public Policy (Toronto: Oxford University Press, 1996); Daniel Madar, Heavy Traffic: Deregulation, Trade, and Transformation in North American Trucking (Vancouver: UBC Press, 2000); and Keith Acheson and Christopher Maule, Much Ado About Culture: North American Trade Disputes (Ann Arbor: University of Michigan Press, 1999). 35 Laura Macdonald, “Gender and Canadian Trade Policy: Women’s Strategies for Access and Transformation,” in Feminist Perspectives on Canadian Foreign Policy, eds. Claire Turenne Sjolander, Heather Smith, and Deborah Stienstra (Toronto: Oxford University Press, 2003), 40-54; and Heather Smith and Edna Keeble, (Re)Defining Traditions: Gender and Canadian Foreign Policy (Halifax: Fernwood, 1999). 36 Douglas M. Brown and Earl H. Fry, eds., States and Provinces in the International Economy (Berkeley: Institute of Governmental Studies Press; and Kingston: Institute of Intergovernmental Relations, Queen’s University, 1993). 37 Kim Richard Nossal, “The Impact of Provincial Governments on Canadian Foreign Policy,” in States and Provinces in the International Economy, 241. 38 Grace Skogstad, “International Trade Policy and Canadian Federalism: A Constructive Tension?” in Canadian Federalism: Performance, Effectiveness, and Legitimacy. 39 Michael M. Hart, Decision at Midnight: Inside the Canada-US Free Trade Negotiations (Vancouver: UBC Press, 1994); and G. Bruce Doern and Brian W. Tomlin, Faith and Fear: The Free Trade Story (Toronto: Stoddart, 1991). 40 Stephen de Boer, “Canadian Provinces, US States, and North American Integration: Bench Warmers or Key Players?” Choices: Canada’s Options in North America 8, no. 4 (2002): 2-24; and Ian Robinson, “Neoliberal Trade Policy and Canadian Federalism Revisited,” in New Trends in Canadian Federalism, 2nd ed., eds. François Rocher and Miriam Smith (Peterborough: Broadview, 2003), 197-242. 41 John F. Helliwell, How Much Do National Borders Matter? (Washington: Brookings Institution Press, 1998); and Michael A. Anderson and Stephen L. Smith, “Canadian Provinces in World Trade: Engagement and Detachment,” Canadian Journal of Economics 32, no. 1 (1999): 22-38. 42 Louis Bélanger, Guy Gosselin, and Gérard Hervouet, “Les Relations Internationales du Québec: Efforts de Définition d’un Nouvel Objet d’Étude,” Revue Québécoise de Science Politique 23 (1993): 143-70. 43 Louis Bélanger, Deux Analyses sur l’Evolution de la Politique Internationale du Québec: 19891992 (Quebec City: Institut Québécois des Hautes Études Internationales, 1996); Luc Bernier, De Paris à Washington: La Politique Internationale du Québec (Montreal: Presses de l’Université du Québec à Montreal, 1996); and Gérard Hervouet and Hélène Galarneau, eds., Présence Internationale du Québec: Chronique des Années 1978-1983 (Quebec City: Centre Québécois des Relations Internationales, 1984). 44 Nelson Michaud, “Canada and Quebec on the World Stage: Defining New Rules?” in Canada Among Nations 2006: Minorities and Priorities, eds. Andrew F. Cooper and Dane Rowlands (Montreal and Kingston: McGill-Queen’s University Press, 2006), 232-50; Louis Bélanger, “The Domestic Politics of Quebec’s Quest for External Distinctiveness,” American Review of Canadian Studies 32, no. 2 (2002): 195-214; and Luc Bernier, “Mulroney’s International

Notes to pages 9-12 203

45

46 47

48

49

50

51

52

53

54

‘Beau Risque’: The Golden Age of Quebec’s Foreign Policy,” in Diplomatic Departures, 128-41. Ivan Bernier and André Binette, Les Provinces Canadiennes et le Commerce International: Dynamique Économique et Adjustement Juridique (Quebec and Ottawa: Centre Québécoise de Relations Internationales, L’Institut de Recherches Politiques, 1988). See also Luc Bernier, “The Foreign Economic Policy of a Subnational State: The Case of Québec,” in Duchacek et al., Perforated Sovereignties, 125-39. Louis Balthazar, Louis Bélanger, Gordon Mace, et al., Trent Ans de Politique Extérieure du Québec 1960-1990 (Québec/Sillery: Septentrion and CQRI, 1993). Ivan Bernier and Jean-Phillipe Thérien, “Le Comportement International du Québec, de l’Ontario et de l’Alberta dans le Domaine Économique,” Études Internationales 25, no. 3 (1994): 453-86; and Guy Gosselin and Gordon Mace, “Asymétrie et Relations Internationales: Les Provinces Canadiennes, l’Europe et l’Amérique Latine,” Études Internationales 25, no. 3 (1994): 523-51. Louis Balthazar, “The Oldest and Most Resistant Section of the Border,” Quebec Studies 36 (2003): 3-28; Louis Balthazar and Alfred O. Hero, Jr., Le Québec dans l’Espace Americain (Montreal: Québec-Amérique, 1999); and Louis Bélanger, “The United States and the Formative Years of an Independent Quebec’s Foreign Policy,” American Review of Canadian Studies 27, no. 1 (1997): 11-25. Stéphane Paquin, “Quelle Place pour les Provinces Canadiennes dans les Organisations et les Négociations Internationales du Canada à la Lumiére des Pratiques au Sein s’Autres Fédérations?” Canadian Public Administration 48, no. 4 (2005): 477-505. Donald Abelson and Michael Lusztig, “The Consistency of Inconsistency: Tracing Ontario’s Opposition to the North American Free Trade Agreement,” Canadian Journal of Political Science 29, no. 4 (1996): 681-98. Richard Falk, “Resisting ‘Globalization-from-Above’ Through ‘Globalization-from-Below,’” New Political Economy 2 (1997): 17-24; and David Held, Democracy and the Global Order: From the Modern State to Cosmopolitan Governance (Stanford: Stanford University Press, 1995). George Hoberg, “Introduction: Economic, Cultural, and Political Dimensions of North American Integration,” in Capacity for Choice: Canada in a New North America, ed. George Hoberg (Toronto: University of Toronto Press, 2002), 8-12. Robert Wolfe, “Transparency and Public Participation in the Canadian Trade Policy Process,” in Process Matters: Sustainable Development and Domestic Trade Policy, eds. Mark Halle and Robert Wolfe (Winnipeg: International Institute for Sustainable Development, 2007), 37-38. Hasenclever, Mayer, and Rittberger, Theories of International Regimes, 3-7.

Chapter 2: International Pressures and Canadian Federalism 1 Stephen Clarkson, ed., An Independent Foreign Policy for Canada? (Toronto: McClelland and Stewart, 1968); and Stephen Clarkson, Uncle Sam and Us: Globalization, Neoconservatism, and the Canadian State (Toronto: University of Toronto Press, 2002). 2 Thomas J. Courchene, “Towards a North American Common Currency: An Optimal Currency Area Analysis,” in Room to Manoeuvre? Globalization and Policy Convergence, ed. Thomas J. Courchene (Montreal and Kingston: McGill-Queen’s University Press, 1999), 271-334; and Thomas J. Courchene with Colin Telmer, From Heartland to North American Region State (Toronto: Centre for Public Management, University of Toronto, 1998). See also Robert Pastor, Toward a North American Community: Lessons from the Old World for the New (Washington: Institute for International Economics, 2001). 3 Michael M. Hart and William Dymond, Common Borders, Shared Destinies: Canada, the United States, and Deepening Integration (Ottawa: Centre for Trade Policy and Law, 2001); Daniel Schwanen, “Deeper, Broader: A Roadmap for a Treaty of North America,” in The Art of the State II: Thinking North America, eds. Thomas J. Courchene, Donald J. Savoie, and Daniel Schwanen (Montreal: Institute for Research on Public Policy, 2004), 1-61; and Geoffrey E. Hale, “Sharing a Continent: Security, Insecurity, and the Politics of ‘Intermesticity,’” Canadian Foreign Policy 12, no. 3 (2006): 31-43.

204 Notes to pages 12-37

4 Richard Simeon, “Important? Yes. Transformative? No: North American Integration and Canadian Federalism,” in The Impact of Global and Regional Integration on Federal Systems: A Comparative Analysis, eds. Harvey Lazar, Hamish Telford, and Ronald Watts (Montreal and Kingston: McGill-Queen’s University Press, 2003), 125-72. 5 George Hoberg, Capacity for Choice: Canada in a New North America (Toronto: University of Toronto Press, 2001); and Grace Skogstad, “Globalization and Public Policy: Situating Canadian Analyses,” Canadian Journal of Political Science 33, no. 4 (2000): 805-28. 6 John McCallum, “National Borders Matter: Canada-US Regional Trade Patterns,” The American Economic Review 85, no. 3 (1995): 615-23. 7 John F. Helliwell, “Do National Borders Matter for Quebec’s Trade?” Canadian Journal of Economics 29, no. 3 (1996): 507-22. See also Charles Engle and John H. Rogers, “How Wide Is the Border?” American Economic Review 86, no. 5 (1996): 1112-25. 8 Edward J. Chambers, “Canadian Provinces Under Free Trade: Alberta and British Columbia,” in NAFTA in the New Millennium, eds. Edward J. Chambers and Peter H. Smith (Edmonton: University of Alberta Press, 2002), 105-25. 9 W. Mark Brown, Overcoming Distance, Overcoming Borders: Comparing North American Regional Trade (Ottawa: Statistics Canada, 2002), vii. 10 Personal interview, 19 July 2004. The federal and provincial officials interviewed for this book spoke on the condition of anonymity with the understanding there would be no direct quotations without permission. Future references will cite only the dates of these meetings. Locations are excluded, given the small number of bureaucrats working in this policy area (to best ensure confidentiality). 11 Personal interview, 2 June 2004. 12 Alan Freeman, “Hussein’s Oil Flowed to Canada: Controversial Iraqi Crude Was Refined at Come By Chance,” Globe and Mail, 4 February 2005, A1. A trade official from Newfoundland and Labrador noted that volatile trade statistics in this sector are a result of the province having only one main refinery; thus, individual contracts negotiated by the company significantly alter trade statistics. Personal interview, 2 September 2005. 13 The territories were not included in this study for three reasons. The first is obvious limitations regarding length. Second, territories do not have the same constitutional standing as provinces in the negotiation and implementation of international trade agreements. Finally, the scale of trade in these jurisdictions is not significant and does not challenge this chapter’s conclusion. 14 Industry Canada, Trade Data Online: Trade by Product (HS) – HS Codes, http://strategis.gc.ca/ sc_mrkti/tdst/tdo/tdo.php?lang=30&headFootDir=/sc_mrkti/tdst/headfoot&product Type=HS6&cacheTime=962115865#tag (23 February 2007). The data for all provincial profiles was taken from this source. 15 Simeon, “Important? Yes,” 137-42. 16 Personal interview, 24 January 1994. 17 Harold Innis, Essays in Canadian Economic History (Toronto: University of Toronto Press, 1956); Edwin R. Black and Alan C. Cairns, “A Different Perspective on Canadian Federalism,” Canadian Public Administration 9, no. 1 (1966): 31-49; and Frank R. Scott, “Centralization and Decentralization in Canadian Federalism,” in Federalism in Canada: Selected Readings, ed. Garth Stevenson (Toronto: McClelland and Stewart, 1989), 52-80. 18 Ian Robinson, “Neo-Liberal Trade Policy and Canadian Federalism Revisited,” in New Trends in Canadian Federalism, 2nd ed., eds. François Rocher and Miriam Smith (Peterborough: Broadview, 2003), 197-242. 19 Garth Stevenson, Unfulfilled Union: Canadian Federalism and National Unity, 3rd ed. (Toronto: Gage, 1989), 178, 181. 20 Paul A.R. Hobson, “Current Issues in Federal-Provincial Fiscal Relations,” in Canada: The State of the Federation, eds. Ronald L. Watts and Douglas M. Brown (Kingston: Queen’s University Institute of Intergovernmental Relations, 1993), 180-81. 21 Paul Barker, “The Development of Major Shared-Cost Programs in Canada,” in Perspectives on Canadian Federalism, eds. R.D. Olling and M.W. Westmacott (Scarborough: Prentice-Hall, 1988), 196.

Notes to pages 38-45 205

22 Gerard W. Boychuck, “Social Assistance and Canadian Federalism,” in Rocher and Smith, New Trends in Canadian Federalism, 2nd ed., 272-73. 23 Antonia Maioni and Miriam Smith, “Health Care and Canadian Federalism,” in Rocher and Smith, New Trends in Canadian Federalism, 2nd ed., 306. 24 The provinces also lobbied for similar increases in assistance for post-secondary education. See Brian Laghi, “Premiers to Push for More Education Funding,” Globe and Mail, 21 July 2005, A1. 25 Rhéal Séguin, “Quebec Opens Door to Private Health Care: Wait-Time Guarantee Includes Promise to Cover Private Clinic Bills if Necessary,” Globe and Mail, 17 February 2006, A1. 26 Brian Laghi, “How Will Harper Handle This Hot Potato?” Globe and Mail, 17 February 2006, A4. 27 Katherine Harding, “Klein Willing to Defy Ottawa: Premier Says Medicare Plans May Violate the Canada Health Act,” Globe and Mail, 2 March 2006, A1. 28 Brian Laghi, “Is Klein Prepared to Be the Bad Boy of Confederation?” Globe and Mail, 2 March 2006, A5. 29 Stevenson, Unfulfilled Union, 189. 30 Ibid., 190-91. 31 Donald J. Savoie, “Regional Development: A Policy for All Seasons and All Regions,” in New Trends in Canadian Federalism, 2nd ed., 355-59. 32 Ibid., 192. 33 Diefenbaker went as far as reserving the entire Canadian market west of Ottawa for Alberta oil and gas. During this time Quebec and the Maritimes continued to rely on imported oil. Surplus oil and gas from the western market was exported to the United States. 34 Stevenson, Unfulfilled Union, 197. 35 Ibid., 198-99. 36 Donald V. Smiley, The Federal Condition in Canada (Toronto: McGraw-Hill Ryerson, 1987), 161. See also G. Bruce Doern and Monica Gattinger, Power Switch: Energy Regulatory Governance in the Twenty-First Century (Toronto: University of Toronto Press, 2003). Chapter 3: The Federal-Provincial Committee System on International Trade 1 Gerhard Von Glahn, Law Among Nations: An Introduction to Public International Law, 2nd ed. (Boston: Allyn and Bacon, 1996), 43. 2 Ibid., 45. 3 Douglas M. Brown, “The Evolving Role of the Provinces in Canadian Trade Policy,” in Canadian Federalism: Meeting Global Economic Challenges? eds. Douglas M. Brown and Murray G. Smith (Kingston: Queen’s University Institute of Intergovernmental Relations, 1991), 90. 4 Ibid. For an extensive discussion of early GATT challenges related to Canada and Article XXIV:12, see Ivan Bernier and André Binette, Les Provinces Canadiennes et le Commerce International: Dynamique Économique et Adjustement Juridique (Quebec: Centre Québécoise de Relations Internationales; and Ottawa: L’Institut de Recherches Politiques, 1988). 5 Douglas M. Brown, “The Evolving Role of the Provinces in Canada-US Trade Relations,” in States and Provinces in the International Economy, eds. Douglas M. Brown and Earl H. Fry (Berkeley: Institute of Governmental Studies Press; and Kingston: Institute of Intergovernmental Relations, Queen’s University, 1993), 115. 6 Ian Robinson, “The NAFTA, The Side Deals, and Canadian Federalism: Constitutional Reform by Other Means,” in Canada: The State of the Federation 1993, eds. Ronald L. Watts and Douglas M. Brown (Kingston: Institute of Intergovernmental Relations, Queen’s University, 1993), 210. 7 Robert G. Richards, “The Canadian Constitution and International Economic Relations,” in Canadian Federalism: Meeting Global Economic Challenges? 58-59. 8 Ibid., 62. 9 Robinson, “The NAFTA, the Side Deals, and Canadian Federalism,” 214. 10 Gerald Baier, “Judicial Review and Canadian Federalism,” in Canadian Federalism: Performance, Effectiveness, and Legitimacy, eds. Herman Bakvis and Grace Skogstad (Toronto: Oxford

206 Notes to pages 45-51

11 12

13 14

15

16

17 18 19 20 21 22 23

24

25 26 27 28 29 30 31 32

33

34 35 36

University Press, 2002), 24-39; and Peter W. Hogg, Constitutional Law of Canada: 1998 Student Edition (Scarborough: Carswell, 1998), 417. Gordon DiGiacomo, “The Federal Treaty Implementation Power and International Labour Agreements,” Canadian Labour and Employment Law Journal 11, no. 1 (2004): 31-68. Christopher J. Kukucha, “Expanding Legitimacy: The Provinces and Canadian Foreign Policy,” in Readings in Canadian Foreign Policy: Classic Debates and New Ideas, eds. Duane Bratt and Christopher J. Kukucha (Toronto: Oxford University Press, 2007), 214-30. Kim Richard Nossal, The Politics of Canadian Foreign Policy, 3rd ed. (Scarborough: PrenticeHall, 1997), 292-314. Sean Riley, “Federalism and Canadian Trade Policy: The Early Days of the Mulroney Government,” in The Provinces and Canadian Foreign Policy, Proceedings of a Conference, University of Alberta, March 28-30, 1985, eds. Tom Keating and Don Munton (Toronto: Canadian Institute of International Affairs, 1985), 46. Peyton Lyon, “The Provinces and Canada Abroad,” in Groups and Governments in Canadian Foreign Policy, Proceedings of a Conference, Ottawa, Canada, June 9-11, 1982, ed. Don Munton (Toronto: Canadian Institute of International Affairs, 1985), 27-28. Elliot J. Feldman and Lily Gardner Feldman, “The Impact of Federalism on the Organization of Canadian Foreign Policy,” in Perspectives on Canadian Federalism, eds. M.W. Westmacott and R.D. Olling (Scarborough: Prentice-Hall, 1988), 272. Personal interview, 11 February 1994. Donald V. Smiley, Canada in Question: Federalism in the Eighties, 3rd ed. (Toronto: McGrawHill Ryerson, 1980), 91. Herman Bakvis and Grace Skogstad, “Canadian Federalism: Performance, Effectiveness, and Legitimacy,” in Canadian Federalism: Performance, Effectiveness, and Legitimacy, 4-5. Donald V. Smiley, The Federal Condition in Canada (Toronto: McGraw-Hill Ryerson, 1987), 85. Gilbert R. Winham, “Bureaucratic Politics and the Canadian Trade Negotiation,” International Journal 34, no. 1 (1978-79): 73. Brown, “The Evolving Role of the Provinces in Canadian Trade Policy,” 91. Ibid., 93. Ironically, the proposals outlined in the Macdonald Commission suggested a greater role for the provinces than what currently exists, including granting the provinces the right to ratify sections of international agreements that fall under provincial jurisdiction. As noted in Smiley, The Federal Condition in Canada, 81. General Agreement on Tariffs and Trade, Panel on Import, Distribution, and Sale of Alcoholic Drinks by Canadian Provincial Marketing Agencies: Report of the Panel Adopted on 22 March 1988 (L/6304-35S/37) (Geneva: General Agreement on Tariffs and Trade, 1998), 38. See also Bernier and Binette, Les Provinces Canadiennes et le Commerce International, 52-55. Riley, “Federalism and Canadian Trade Policy,” 47. Michael M. Hart, Canadian Economic Development and the International Trading System: Constraints and Opportunities (Toronto: University of Toronto Press, 1985), 77. G. Bruce Doern and Brian W. Tomlin, Faith and Fear: The Free Trade Story (Toronto: Stoddart, 1991), 128. Ibid., 129-30. Ibid., 130. Brown, “The Evolving Role of the Provinces in Canadian Trade Policy,” 94. Ibid., 94-95. Douglas M. Brown, Market Rules: Economic Union Reform and Intergovernmental Policy-Making in Australia and Canada (Montreal and Kingston: McGill-Queen’s University Press, 2002), 123-25. Judith H. Bello and Gilbert R. Winham, “The Canada-USA Free Trade Agreement: Issues of Process,” in Negotiating and Implementing a North American Free Trade Agreement, ed. Leonard Waverman (Vancouver: Fraser Institute/Centre for International Studies, 1992), 33. Brown, “The Evolving Role of the Provinces in Canadian Trade Policy,” 95. Brown, “The Evolving Role of the Provinces in Canada-US Trade Relations,” 114. The implementation of the FTA in areas of provincial jurisdiction was still a concern of both levels of government following the negotiations. Ottawa eventually decided against

Notes to pages 52-62 207

37 38 39 40 41 42 43 44 45

46 47 48 49

50 51 52 53 54 55 56 57 58

enforcing the FTA by law in each province and instead passed Bill C-130, An Act to Implement the Free Trade Agreement Between Canada and the United States of America. Personal interview, 23 February 1994. Ibid. Personal interview, 11 February 1994. Ibid. Personal interview, 21 February 1994. Personal interview, 28 August 2001. Ibid. Personal interview, 9 October 2001. The Pinewood Nematode issue is a dispute between Europe and Canada related to softwood lumber. European interests argue that green timber imports from BC and other provinces are unsafe due to possible infestation and therefore must be heat-treated to ensure that the wood is bug free. This has obvious implications for the cost of Canadian lumber in the European market. Personal interview, 9 October 2001. Personal interview (second official), 28 August 2001. Ibid. Monique Gagnon-Tremblay, “Who Dares Speak for Canada Abroad? We Do,” Globe and Mail, 3 October 2005, A15. The 1965 Gérin-Lajoie doctrine argued that Quebec had the right to pursue international objectives consistent with its cultural identity or in constitutionally defined areas of jurisdiction. For more information, see Louis Bélanger, “The Domestic Politics of Quebec’s Quest for External Distinctiveness,” American Review of Canadian Studies 32, no. 2 (2002): 200. Personal interview, 19 July 2004. Personal interview, 31 August 2005. Grace Skogstad, “International Trade Policy and Canadian Federalism: A Constructive Tension,” in Canadian Federalism: Performance, Effectiveness, and Legitimacy, 171. Personal interview, 31 August 2005. Ibid. Personal interview, 28 August 2002. Personal interview, 31 August 2005. Personal interview, 28 May 2003; and personal interview, 29 May 2003. Personal interview, 14 March 2003. See also J. Stefan Dupré, “Reflections on the Workability of Canadian Federalism,” in Intergovernmental Relations, ed. Richard Simeon (Toronto: University of Toronto Press, 1985), 1-32.

Chapter 4: The Political Executive in Provincial Foreign Trade Policy 1 Michael Howlett, Luc Bernier, Keith Brownsey, and Christopher Dunn, “Modern Canadian Governance: Political-Administrative Styles and Executive Organization in Canada,” in Executive Styles in Canada: Cabinet Structures and Leadership Practices in Canadian Government, eds. Luc Bernier, Keith Brownsey, and Michael Howlett (Toronto: University of Toronto Press, 2005), 3-9. 2 Donald J. Savoie, “The Federal Government: Revisiting Court Governments in Canada,” in Executive Styles in Canada, 17-46. See also, Donald J. Savoie, Governing from the Centre: The Concentration of Power in Canadian Politics (Toronto: University of Toronto Press, 1999); and Herman Bakvis, “Prime Minister and Cabinet in Canada: An Autocracy in Need of Reform?” Journal of Canadian Studies 35, no. 4 (2000-01): 60-79. 3 Dan Ciuriak, “Canadian Trade Policy Development: Stakeholder Consultations and Public Policy Research,” in Trade Policy Research 2004, eds. John M. Curtis and Dan Ciuriak (Ottawa: Minister of Public Works and Government Services, 2004), 218-19. 4 Christopher Dunn, The Institutionalized Cabinet: Governing the Western Provinces (Montreal and Kingston: McGill-Queen’s University Press, 1995). 5 Christopher Dunn, “The Central Executive in Canadian Government: Searching for the New Holy Grail,” in The Handbook of Canadian Public Administration, ed. Christopher Dunn

208 Notes to pages 63-70

6 7 8 9 10

11 12

13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

(Toronto: Oxford University Press, 2002), 305-40. Similar conclusions were cited in J. Stefan Dupré, “Reflections on the Workability of Executive Federalism,” in Intergovernmental Relations, ed. Richard Simeon (Toronto: University of Toronto Press, 1985), 1-32. Stewart Hyson, “Governing from the Centre in New Brunswick,” in Executive Styles in Canada, 82-88. Personal interview, 2 June 2003. Personal interview, 2 June 2003 (second source). New Brunswick, Greater Opportunity: New Brunswick’s Prosperity Plan (Fredericton: Government of New Brunswick, 2002). Raj Venugopal, “The ‘White Paper’ in New Brunswick’s International Affairs: An Analysis of Prospering in a Global Community: New Brunswick’s International Strategy,” paper presented at the White Papers: Foreign Policy Management Tools Conference, Quebec City, 14 May 2005, 14. John Kershaw, interviewed by Raj Venugopal, in Venugopal, “The ‘White Paper’ in New Brunswick’s International Affairs,” 8. New Brunswick, Department of Intergovernmental and International Relations, Prospering in a Global Community: New Brunswick’s International Strategy (Fredericton: Government of New Brunswick, 2003). Personal interview, 2 June 2003 (second source). Ibid. Personal interview, 2 June 2003. David Johnson, “Premieral Governance: The System of Executive Power in Nova Scotia,” in Executive Styles in Canada, 93. Personal interview, 29 May 2003. Ibid. Peter E. Buker, “The Executive Administrative Style in Prince Edward Island: Managerial and Spoils Politics,” in Executive Styles in Canada, 111. Ibid., 126. Personal interview, 28 May 2003. Buker, “The Executive Administrative Style in Prince Edward Island,” 122. Personal interview, 28 May 2003. Christopher Dunn, “The Persistence of the Institutionalized Cabinet: The Central Executive in Newfoundland and Labrador,” in Executive Styles in Canada, 54-74. Personal interview, 2 September 2005. Ken Rasmussen and Gregory P. Marchildon, “Saskatchewan’s Executive Decision-Making Style: The Centrality of Planning,” in Executive Styles in Canada, 184-205. Personal interview, 28 May 2003. Personal interview, 31 May 2004. Joan Grace, “Cabinet Structure and Executive Style in Manitoba,” in Executive Styles in Canada, 171-82. Ibid., 183. Personal interview, 2 June 2004. Personal interview, 29 August 2005. Keith Brownsey, “The Post-Institutionalized Cabinet: The Administrative Style of Alberta,” in Executive Styles in Canada, 208-23. Personal interview, 9 October 2001. Ibid. Luc Bernier, “Who Governs in Quebec? Revolving Premiers and Reforms,” in Executive Styles in Canada, 134-37. Ibid., 151. G. Bruce Doern and Brian W. Tomlin, Faith and Fear: The Free Trade Story (Toronto: Stoddart, 1991), 142. Michael M. Hart, Decision at Midnight: Inside the Canada-US Free Trade Negotiations (Vancouver: UBC Press, 1994), 138. Personal interview, 23 February 1994.

Notes to pages 70-77 209

41 Nelson Michaud, “Quebec and Continental Integration: The Characteristic Strategies of a Federated Actor,” paper presented at the annual meeting of the Canadian Political Science Association, Halifax, 31 May 2003, 15. 42 Personal interview, 4 June 2003. 43 Michaud, “Quebec and Continental Integration,” 16. 44 Quebec, International Relations, “Notes for a Speech by the Deputy Premier, Minister of International Relations and Minister Responsible for La Francophonie, Monique GagnonTremblay, to Welcome the Participants in the 50th Commonwealth Parliamentary Conference,” News Release, 2 September 2004. 45 Michaud, “Quebec and Continental Integration,” 18. 46 Ibid., 19-20. 47 Quebec, International Relations, “Speech Given by Deputy Premier and Minister of International Relations, Monique Gagnon-Tremblay, on the Occasion of the Visit to Quebec by the Faculty Associates of the Harvard University Weatherhead Center for International Affairs,” News Release, 2 September 2004, 2. 48 Mark MacKinnon, “PM Unruffled by Charest Trade Trip,” Globe and Mail, 15 October 2004, A7. 49 Ted Glenn, “Politics, Personality, and History in Ontario’s Administrative Style,” in Executive Styles in Canada, 156-71. 50 Doern and Tomlin, Faith and Fear, 150. 51 Donald Abelson and Michael Lusztig, “The Consistency of Inconsistency: Tracing Ontario’s Opposition to the North American Free Trade Agreement,” Canadian Journal of Political Science 29, no. 4 (1996): 686. 52 Ibid., 687-88. 53 “Special Report: The NAFTA Tapes,” Maclean’s, 21 September 1992, 18. 54 Ibid., 21. 55 Personal interview, 8 February 1994. 56 Ibid. 57 Ontario, Ministry of Intergovernmental Affairs, Final Report – Cabinet Committee on the North American Free Trade Agreement (Toronto: Queen’s Printer, 1993), 44. 58 Ontario, Ministry of Intergovernmental Affairs, “Notes for Remarks by the Honourable Frances Lankin, Minister of Economic Development and Trade, at the O’Keefe Centre, Toronto: Economic Renewal, Trade and the Government’s Response to the Report of the Cabinet Committee on the North American Free Trade Agreement,” News Release, 28 July 1993, 8-9. 59 Abelson and Lusztig, “The Consistency of Inconsistency,” 691. 60 Personal interview, 9 February 1994. 61 Personal interview, 27 January 1994. 62 Personal interview, 23 February 1994. 63 Peter Morton, “Ontario Drops NAFTA Court Threat,” Financial Post, 6 December 1994, 10. 64 Personal interview, 30 May 2002. 65 Personal interview, 31 August 2005. 66 Ibid. 67 Norman J. Ruff, “The West Annex: Executive Structure and Administrative Style in British Columbia,” in Executive Styles in Canada, 226-31. 68 Personal interview, 23 February 1994. 69 Daphne Bramham, “BC Bucks Trade Talk to Cheers of Workers: NDP Urges Canada Leave US, Mexico Deal Behind,” Vancouver Sun, 6 June 1992, H1. 70 Judy Lindsay, “NDP Tosses Trade Crumb to Sate Labour,” Vancouver Sun, 6 June 1992, H1. 71 G. Bruce Doern and Mark MacDonald, Free Trade Federalism: Negotiating the Canadian Agreement on Internal Trade (Toronto: University of Toronto Press, 1999), 69. Clark worked for the ironworkers’ union before entering politics, but he did not enjoy united support from organized labour in the province. As one former official pointed out, the public sector unions “hated him.” To be fair, however, “he was not a big fan of these groups either.” Personal interview, 27 July 2004.

210 Notes to pages 77-87

72 Personal interview, 28 August 2001. 73 Personal interview, 14 July 2004. 74 Vaughn Palmer, “The Story of Political Climbers from BC: Glen Clark, Adrian Dix, and Tim Gallagher Backed Ian Waddell for Federal NDP Leader. And Look Where They All Are Today,” Vancouver Sun, 27 May 1999, A22. 75 Personal interview, 27 July 2004. 76 Personal correspondence, 23 July 2004. 77 Personal interview, 27 July 2004. 78 Personal interview, 2 August 2004. 79 Personal interview, 2 June 2003. An Ontario official, however, offered a more direct assessment of these NDP appointments. “They were not idealogues,” he suggested, “but they were definitely opposed to an expanded agenda of liberalized trade.” Personal interview, 31 August 2005. 80 Personal interview, 28 August 2001. 81 Personal interview, 28 August 2001 (second source). 82 Personal interview, 2 August 2004. 83 World Trade Organization, Annex 1B General Agreement on Trade in Services, 15 April 1994, 3. For a summary of Canada’s interpretation of this position, see International Trade Canada, Trade in Services: WTO – Trade in Services, http://www.dfait-maeci.gc.ca/tna-nac/ TS/gats-negotiations-en.asp (10 March 2005). 84 One source that attempts to monitor these appointments, which claims to be non-partisan but adopts a critical perspective, is Public Eye Online: A Journal Covering British Columbia Politics, http://www.publiceyeonline.com (8 October 2004). 85 This is not to suggest that IGR has a direct role in trade policy. For more detailed discussion of IGR’s role, see Chapter 9. Chapter 5: Bureaucratic and Legislative Pressures 1 Kim Richard Nossal, The Politics of Canadian Foreign Policy, 3rd ed. (Scarborough: PrenticeHall, 1997), 255-57. 2 Donald J. Savoie, “Searching for Accountability in a Government Without Boundaries,” Canadian Public Administration 47, no. 1 (2004): 7. 3 Marcel Massé, “Partners in the Management of Canada: The Changing Roles of Government and the Public Service,” paper presented at the 1993 John L. Manion Lecture, Canadian Centre for Management Development, Ottawa, 18 February 1993, 5-8. In Savoie, “Searching for Accountability,” 7. 4 Personal interview, 12 May 2004. 5 Ibid. 6 Nelson Michaud, “Quebec and Continental Integration: The Characteristic Strategies of a Federated Actor,” paper presented at the annual meeting of the Canadian Political Science Association, Halifax, 31 May 2003, 22-24. 7 Personal interview, 4 June 2003. 8 Personal interview, 23 February 1994. 9 Personal interview, 12 August 2003. 10 Personal interview, 28 August 2002. 11 Personal interview, 12 August 2003. 12 Alberta International and Intergovernmental Relations, Trade Policy Section, “General Areas of Responsibility,” 14 June 2004. 13 Personal interview, 19 July 2004. 14 Personal interview, 2 June 1996. 15 Personal interview, 2 June 2004. 16 Personal interview, 2 June 2004 (second source). 17 Personal interview, 2 June 2004. 18 Personal interview, 31 May 2004. 19 Personal interview, 2 June 2003. 20 Raj Venugopal, “The ‘White Paper’ in New Brunswick’s International Affairs: An Analysis of Prospering in a Global Community: New Brunswick’s International Strategy,” paper presented

Notes to pages 87-95 211

21 22 23 24 25 26 27 28 29 30 31 32 33 34

35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

52 53

54 55

56

57

at the White Papers: Foreign Policy Management Tools Conference, Quebec City, 14 May 2005, 10. Personal interview, 2 June 2003. Personal interview, 29 May 2003. Ibid. Personal interview, 2 September 2005. Personal interview, 28 May 2003. Personal interview, 19 July 2004. Personal interview, 4 June 2003. Personal interview, 2 June 2003. Venugopal, “The ‘White Paper’ in New Brunswick’s International Affairs,” 16. Personal interview, 12 May 2004. Personal interview, 28 August 2001. Personal interview, 28 August 2002. Personal interview, 19 December 2002. Paul Martin established an “Advocacy Secretariat” in the Canadian Embassy in Washington to represent provincial interests in Congress. The position was created in the hope of discouraging provinces from establishing offices in the US capital. The Harper government has renamed this official the Minister (Legislative/Sub-National/Public Affairs) and Head, Washington Advocacy Secretariat. Jane Taber, “The Empty Spot on the Prime Minister’s Wall,” Globe and Mail, 23 December 2006, A5. Personal interview, 28 August 2001. Personal interview, 12 May 2004. Personal interview, 19 July 2004. Personal interview, 4 June 2003. Personal interview, 29 May 2003. Personal interview, 2 June 2003. Personal interview, 19 July 2004. Personal interview, 12 May 2004. Personal interview, 4 June 2003. Personal interview (second official), 28 August 2001. Personal interview, 28 August 2002. Personal interview, 2 June 2004. Personal interview, 12 May 2004. Personal interview, 19 December 2002. Ibid. Personal interview, 8 October 2002. David Leyton-Brown and R.B. Byers, “Parliament and Canadian Foreign Policy,” paper presented at the Legislative Studies in Canada Conference, Toronto, October 1977. In Nossal, The Politics of Canadian Foreign Policy, 3rd ed., 285. Nossal, The Politics of Canadian Foreign Policy, 3rd ed., 284-85. John English, “The Member of Parliament and Foreign Policy,” in Canada Among Nations 1998: Leadership and Dialogue, eds. Fen Osler Hampson and Maureen Appel Molot (Toronto: Oxford University Press, 1998), 74-79. For a review of Parliament’s role in government White Papers, see Gerald J. Schmitz, “Les Livres Blancs sur la Politique Étrangère et le Rôle du Parlement du Canada Un Paradoxe qui n’est Cependant pas sans Potentiel,” Études Internationales 37, no. 1 (2006): 91-122. Peter W. Hogg, Constitutional Law of Canada: Volume 1 (Toronto: Carswell, 1997), 11: 3-18. Stéphane Paquin, “Quelle Place Pour Les Provinces Canadiennes Dans les Organisations et les Négociations Internationales du Canada à la Lumiére des Pratiques au Sein d’Autres Fédérations?” Canadian Public Administration 48, no. 4 (2005): 477. Alberta, Quebec, and Manitoba have passed legislation essentially “ratifying” the NAAEC. Initially, Alberta was the only province to sign the NAALC in 1995. Quebec and Manitoba subsequently joined in 1996, and Prince Edward Island soon followed. Michaud, “Quebec and Continental Integration,” 28-32.

212 Notes to pages 95-103

58 For more information on the role of Parliament in Canadian trade policy, see Dan Ciuriak, “Canadian Trade Policy Development: Stakeholder Consultations and Public Policy Research,” in Trade Policy Research 2004, eds. John M. Curtis and Dan Ciuriak (Ottawa: Minister of Public Works and Government Services, 2004), 219-21. 59 Personal interview, 31 May 2004. 60 Personal interview, 19 July 2004. 61 Tony Wanless, “BC Worries Most About Pacific Rim: NAFTA Study,” Vancouver Province, 9 May 1993, A9. 62 Les Leyne, “MAI Surgery Continues Despite Patient’s Death,” Victoria Times Colonist, 24 November 1998, A9. 63 Joan Smallwood, “Nanaimo’s Views on MAI Important to Committee,” Nanaimo Daily News, 27 March 1999, A8. 64 John Schofield, “Trading Insults: Critics Assail a Proposed Treaty on Investment,” Maclean’s, 28 April 1997, 46. 65 Louise Harel, “Relations Internationales de l’Assemblie Nationale du Québec,” Revue Parlementaire Canadienne 26, no. 1 (2003): 5. See also Ministére des Relations Internationales Quebec, Quebec’s International Initiatives: August 2006 no. 2, http://www.mri.gouv.qc.ca/en/ pdf/action_internationale2.pdf (19 December 2006). Chapter 6: Issues of Implementation, Negotiation, and Consultation 1 Douglas M. Brown, “The Evolving Role of the Provinces in Canadian Trade Policy,” in Canadian Federalism: Meeting Global Economic Challenges? eds. Douglas M. Brown and Murray G. Smith (Kingston: Institute of Intergovernmental Relations, Queen’s University, 1991), 101. 2 Ibid., 106. 3 Personal interview, 28 August 2001. 4 Ibid. 5 Due in part to Canada’s dispute with the EC, wine was excluded from the final text of the North American Free Trade Agreement. The text of the accord is available at World Wine Trade Group, “Agreement on Mutual Acceptance of Oenological Practices,” http://www. ita.doc.gov/td/ocg/eng_agreement.htm (13 January 2007). 6 Personal interview, 28 August 2001. 7 Lisa Grace Marr, “Canada Inks Wine Deal; Until Now Canadian Vintners Have Been Shut Out of the European Market,” The Spectator, 17 September 2003, C8. 8 Personal interview, 2 June 2003. 9 Personal interview, 2 August 2004. 10 Personal interview, 12 May 2004. 11 Julie Soloway, “NAFTA’s Chapter 11: Investor Protection, Integration, and the Public Interest,” Choices: Canada’s Options in North America 9, no. 2 (2003): 2-46. 12 Kathy Baylis and Hartley Furtan, “Free-Riding Federalism: Trade Protection and the Canadian Dairy Industry,” Canadian Public Policy 29, no. 2 (2003): 148. 13 Ibid., 148-49. 14 Theodore H. Cohn, “Canada and the Ongoing Impasse over Agricultural Protectionism,” in Canadian Foreign Policy and International Economic Regimes, eds. A. Claire Cutler and Mark W. Zacher (Vancouver: UBC Press, 1992), 67. 15 Alberta, Agriculture and Food, Studies Explore Grain Marketing Options for Prairie Wheat and Barley, http://www1.aric.gov.ab.ca/$department/deptdocs.nsf/all/com10799 (13 January 2007). The province’s position on agricultural reform is regularly updated on Alberta, “Choice Matters: Marketing Choice for Alberta Producers,” http://www.choicematters.gov. ab.ca (13 January 2007). 16 Grace Skogstad, “Canadian Agricultural Trade Policy: Continuity Amidst Change,” in Canada Among Nations 1999: A Big League Player? eds. Fen Osler Hampson, Martin Rudner, and Michael M. Hart (Toronto: Oxford University Press, 1999), 73-90. 17 Éric Montpetit, Misplaced Distrust: Policy Networks and the Environment in France, the United States, and Canada (Vancouver: UBC Press, 2003), 98. 18 Skogstad, “Canadian Agricultural Trade Policy,” 82.

Notes to pages 103-10 213

19 World Trade Organization, “Article 2 Agreement on Subsidies and Countervailing Measures,” http://www.wto.org/english/docs_e/legal_e/24-scm_01_e.htm (10 June 2005). 20 Personal interview, 9 February 1994. 21 Alberta, Ministry of International and Intergovernmental Relations, Improvements to the WTO Subsidies and Antidumping Agreements: Proposals for Discussion (Edmonton: Ministry of International and Intergovernmental Relations, 2002), i. 22 Personal interview, 27 January 1994. 23 Alberta, Improvements to the WTO Subsidies and Antidumping Agreements, 2-3. 24 Mark Crawford, “Truth or Consequences? The Law and Politics of the GATS Health Care Debate,” Canadian Foreign Policy 12, no. 2 (2005): 108. 25 Personal interview, 2 August 2004. See also North American Free Trade Agreement, “Annex II Reservations for Future Measures: Schedule of Canada,” http://www.dfait-maeci.gc.ca/ nafta-alena/Anx2-en.asp?#reservations (10 March 2005). 26 World Trade Organization, “Annex 1B General Agreement on Trade in Services,” 15 April 1994, 3. For a summary of Canada’s interpretation of this position, see International Trade Canada, Trade in Services: WTO – Trade in Services, http://www.dfait-maeci.gc.ca/tna-nac/ TS/gats-negotiations-en.asp (10 March 2005). 27 Crawford, “Truth or Consequences?” 104-5. 28 J. Anthony VanDuzer, “Health, Education, and Social Services in Canada: The Impact of the GATS,” http://www.dfait-maeci.gc.ca/tna-nac/documents/health-edu-ss-gats-en.pdf (11 June 2005), 78. 29 George Kourakos, Yves Poisson, and Lynn Decarie, Trade in Services: An Opportunity for Canada (Ottawa: Public Policy Forum, 2003), 13. 30 Personal interview, 31 August 2005. 31 Ibid. 32 New Brunswick, Department of Intergovernmental and International Relations, Prospering in a Global Community: New Brunswick’s International Strategy (Fredericton: Government of New Brunswick, 2003), 14. 33 Kourakos, Poisson, and Decarie, Trade in Services, 17-18. 34 Bernard M. Hoekman and Michel M. Kostecki, The Political Economy of the World Trading System, 2nd ed. (Oxford: Oxford University Press, 2001), 258. 35 Ibid., 267. 36 Barry Appleton, Navigating NAFTA: A Concise User’s Guide to the North American Free Trade Agreement (Scarborough: Carswell, 1994), 162-63. 37 Hoekman and Kostecki, The Political Economy of the World Trading System, 259-60. 38 Denis Lemieux and Ana Stuhec, Review of Administrative Action Under NAFTA (Scarborough: Carswell, 1999), 65-66. For a discussion of procurement issues pre-NAFTA, see Ivan Bernier and André Binette, Les Provinces Canadiennes et le Commerce International: Dynamique Économique et Adjustement Juridique (Quebec: Centre Québécoise de Relations Internationales; and Ottawa: L’Institut de Recherches Politiques, 1988), 55-59. 39 International Trade Canada, “Consultations on FTAA and WTO Negotiations: Sectoral Consultations – Government Procurement,” http://www.dfait-maeci.gc.ca/tna-nac/ discussion/govproc-en.asp (17 May 2005). 40 Personal interview (second official), 30 May 2002. 41 Personal interview, 30 May 2002. 42 Personal interview (third official), 30 May 2002. 43 Personal interview, 12 May 2004. 44 Personal interview (third official), 30 May 2002. 45 Personal interview, 4 June 2003. 46 Stephen Brooks and Andrew Stritch, Business and Government in Canada (Scarborough: Prentice-Hall, 1991), 75. 47 Leo Panitch, Working-Class Politics in Crisis (London: Verso, 1986), 136. 48 William D. Coleman, Business and Politics (Kingston and Montreal: McGill-Queen’s University Press, 1988). 49 Leo Panitch, “Corporatism in Canada?” Studies in Political Economy 1 (1979): 78-82, in Brooks and Stritch, Business and Government in Canada, 78.

214 Notes to pages 110-21

50 Wallace Clement, “The Corporate Elite, the Capitalist Class, and the Canadian State,” in The Canadian State: Political Economy and Political Power, ed. Leo Panitch (Toronto: University of Toronto Press, 1977), 225-48. 51 Clinton Archibald, Un Québec Corpatiste? (Hull: Édition Asticou, 1983). 52 Éric Montpetit, “Can Québec Neo-Corporatist Networks Withstand Canadian Federalism and Internationalization?” in Québec: State and Society, 3rd ed., ed. Alain-G. Gagnon (Peterborough: Broadview, 2004), 170. 53 Personal interview, 4 June 2003. 54 Brian A. Tanguay, “Concerted Action in Québec, 1976-1983: Dialogue of the Deaf,” in Québec: State and Society, ed. Alain-G. Gagnon (Agincourt: Methuen, 1984), 365-85. 55 Montpetit, “Can Québec Neo-Corporatist Networks Withstand Canadian Federalism and Internationalization?” 170-73. 56 François Rocher, “Québec in the Americas: From the FTA to the FTAA,” in Quebec: State and Society, 3rd ed., 415-16. 57 Ibid., 420. 58 Grace Skogstad, “Canadian Federalism, Internationalization, and Quebec Agriculture: DisEngagement, Re-Integration?” Canadian Public Policy 24, no. 1 (1998): 28-29. 59 Ibid., 31-32. 60 Personal interview, 2 June 2004. 61 Personal interview, 31 May 2004. 62 Personal interview, 19 July 2004. 63 Ibid. 64 Ibid. 65 Kourakos, Poisson, and Decarie, Trade in Services, 14. 66 Personal interview, 28 August 2001. 67 British Columbia, Ministry of Employment and Investment, “Farnworth Asks Public for Input on International Trade Negotiations,” News Release, 5 July 1999, 1. 68 British Columbia, Ministry of Employment and Investment, “Trade Consultations,” http:// www.ei.gov.bc.ca/FTAA-WTO (22 January 2000). 69 British Columbia, Ministry of Agriculture, “BC Agri-Food Trade Council,” News Release, 11 April 2002. 70 Personal interview, 28 August 2002. 71 Personal interview (second official), 28 August 2002. 72 Jeremy Wilson, Talk and Log: Wilderness Politics in British Columbia, 1965-1996 (Vancouver: UBC Press, 1998); and Christopher J. Kukucha, “Lawyers, Trees, and Money: British Columbia Forest Policy and the Convergence of International and Domestic Trade Considerations,” Canadian Public Administration 58, no. 4 (2005): 506-27. 73 Personal interview, 29 May 2003. 74 Personal interview, 2 June 2003. 75 Personal interview, 28 May 2003. 76 Personal interview, 2 September 2005. Chapter 7: Is Anybody Listening? Evaluating Societal Considerations 1 Richard Falk, “Resisting ‘Globalization-From-Above’ Through ‘Globalization-From-Below,’” New Political Economy 2 (1997): 17-24; and David Held, Democracy and the Global Order: From the Modern State to Cosmopolitan Governance (Stanford: Stanford University Press, 1995). 2 Karl Marx, Capital, 4th ed., trans. Eden Paul and Cedar Paul (London: Dent, 1962). See also V.I. Lenin, Imperialism: The Highest Stage of Capitalism (New York: International, 1939). 3 Allison Brysk, From Tribal Village to Global Village: Indian Rights and International Relations in Latin America (Stanford: Stanford University Press, 2000); and Sonia E. Alvarez, Evelina Dagnino, and Arturo Escobar, eds., Culture of Politics, Politics of Culture: Re-Visioning Latin American Social Movements (Boulder: Westview, 1998). 4 Joseph M. Grieco, Cooperation Among Nations: Europe, America and Non-Tariff Barriers (Ithaca: Cornell University Press, 1990); and Robert Gilpin, The Political Economy of International Relations (Princeton: Princeton University Press, 1987).

Notes to pages 121-25 215

5 A. Paul Pross, “Pressure Groups: Adaptive Instruments of Political Communication,” in Pressure Groups’ Behaviour in Canadian Politics, ed. A. Paul Pross (Toronto: McGraw-Hill Ryerson, 1975), 1-26. 6 William D. Coleman and Grace Skogstad, “Policy Communities and Policy Networks: A Structural Approach,” in Policy Communities and Public Policy in Canada, eds. William D. Coleman and Grace Skogstad (Toronto: Copp Clark Pitman, 1990), 14-33. 7 Janine Brodie, Politics on the Margin: Restructuring and the Canadian Women’s Movement (Halifax: Fernwood, 1995); and Claude Galipeau, “Political Parties, Interest Groups, and New Social Movements: Toward New Representation?” in Political Parties in Transition, eds. Alain Gagnon and Brian Tanguay (Scarborough: Nelson, 1989). 8 Miriam Smith, A Civil Society: Collective Actors in Canadian Political Life (Peterborough: Broadview, 2005). 9 Kim Richard Nossal, “The Democratization of Canadian Foreign Policy? Respondents: John English and Peter Dobell,” Canadian Foreign Policy 1, no. 3 (1993): 95-106. 10 Maxwell A. Cameron, “Democratization of Foreign Policy: The Ottawa Process as a Model,” Canadian Foreign Policy 5, no. 3 (1998): 147-66; and Tim Draimin and Betty Plewes, “Civil Society and the Democratization of Foreign Policy,” in Democracy and Foreign Policy: Canada Among Nations, 1995, eds. Maxwell A. Cameron and Maureen Appel Molot (Ottawa: Carleton University Press, 1995), 63-82. 11 Marc Lortie and Sylvie Bedard, “Citizen Involvement in Canadian Foreign Policy: The Summit of the Americas Experience 2001,” International Journal 57, no. 3 (2002): 323-39; John Kirton, “Guess Who Is Coming to Kananaskis?” International Journal 56, no. 1 (200102): 101-27; and Tom Keating and Jacquie Beasse, “Discerning the Public Interest: Civil Society Organizations and the Administration of Canadian Foreign Policy,” paper presented at the Administration of Foreign Affairs Conference, Hull, 3 November 2001. 12 Robert Wolfe and Matthew Mendelsohn, “Values and Interests in Attitudes Toward Trade and Globalization: The Continuing Compromise of Embedded Liberalism,” Canadian Journal of Political Science 38, no. 1 (2005): 45-68. 13 Laura C. Macdonald, “Governance and State-Society Relations: The Challenges,” in Capacity for Choice: Canada in a New North America, ed. George Hoberg (Toronto: University of Toronto Press, 2002), 187-223. 14 Jeffrey M. Ayres, “Political Economy, Civil Society, and the Deep Integration Debate in Canada,” American Review of Canadian Studies 34, no. 4 (2004): 621-47; and Jeffrey M. Ayres, Challenging Conventional Wisdom: Political Movements and Popular Contention Against North American Free Trade (Toronto: University of Toronto Press, 1998). 15 Éric Montpetit, Misplaced Distrust: Policy Networks and the Environment in France, the United States, and Canada (Vancouver: UBC Press, 2003), 99. 16 Ibid., 100-3. 17 Kathy Brock, “Lifting Impressions: Interest Groups, the Provinces, and the Constitution,” in Provinces: Canadian Provincial Politics, ed. Christopher Dunn (Peterborough: Broadview, 1996), 108. 18 Ibid., 108-9. 19 Personal interview, 30 May 2002. 20 Ibid. 21 Personal interview, 31 August 2005. 22 Evert Lindquist and Adam Wellstead, “Making Sense of Complexity: Advances and Gaps in Comprehending the Canadian Forest Policy Process,” in Canadian Forest Policy: Adapting to Change, ed. Michael Howlett (Toronto: University of Toronto Press, 2001), 422-23. 23 Karine Levasseur and Stephanie Paterson, “Forest Sector Regulation and Communities,” in Rules, Rules, Rules, Rules: Multi-Level Regulatory Governance, eds. G. Bruce Doern and Robert Johnson (Toronto: University of Toronto Press, 2006), 221. 24 Brock, “Lifting Impressions,” 106-7. 25 Rand Dyck, Provincial Politics in Canada, 2nd ed. (Scarborough: Prentice-Hall, 1991), 274. 26 Éric Montpetit, “Can Québec Neo-Corporatist Networks Withstand Canadian Federalism and Internationalization,” in Québec: State and Society, 3rd ed., ed. Alain-G. Gagnon (Peterborough: Broadview, 2004), 169-70.

216 Notes to pages 125-34

27 Nelson Michaud, “Quebec and Continental Integration: The Characteristic Strategies of a Federated Actor,” paper presented at the annual meeting of the Canadian Political Science Association, Halifax, 31 May 2003, 32. 28 Personal interview, 4 June 2003. 29 Brock, “Lifting Impressions,” 110-11. 30 Personal interview, 2 June 2004. 31 Ken Rasmussen, “Saskatchewan: From Entrepreneurial State to Embedded State,” in The Provincial State in Canada: Politics in the Provinces and Territories, eds. Keith Brownsey and Michael Howlett (Peterborough: Broadview, 2001), 257. 32 Ibid. 33 Personal interview, 31 May 2004. 34 David Laycock, Populism and Democratic Thought in the Canadian Prairies, 1910-1945 (Toronto: University of Toronto Press, 1990). 35 Peter J. Smith, “Alberta: Experiments in Governance: From Social Credit to the Klein Revolution,” in The Provincial State in Canada, 303-4. 36 Personal interview, 19 July 2004. 37 Ibid. 38 Brock, “Lifting Impressions,” 104-6. 39 Personal interview, 2 June 2003. 40 Personal interview, 2 June 2003 (second source). 41 James P. Bickerton, “Atlantic Canada: Regime Change in a Dependent Region,” in Canadian Politics, 2nd ed., eds. James P. Bickerton and Alain-G. Gagnon (Peterborough: Broadview, 1994), 442-43. 42 Personal interview, 29 May 2003. 43 Brock, “Lifting Impressions,” 102-3. 44 Personal interview, 28 May 2003. 45 Brock, “Lifting Impressions,” 101. 46 Personal interview, 2 September 2005. 47 George Hoberg, “Policy Cycles and Policy Regimes: A Framework for Studying Policy Change,” in In Search of Sustainability: British Columbia Forest Policy in the 1990s, eds. Benjamin Cashore et al. (Vancouver: UBC Press, 2001), 24-27. 48 Ibid., 28. 49 Judith I. McKenzie, Environmental Politics in Canada: Managing the Commons into the TwentyFirst Century (Toronto: Oxford University Press, 2002), 183. 50 George Hoberg, “Don’t Forget Government Can Do Anything: Policies Toward Jobs in the BC Forest Sector,” in In Search of Sustainability, 207. 51 “Higher Prices Unlikely Soon,” Vancouver Sun, 21 May 2003, D5. 52 Gordon Hamilton, “Lumber Hopes Dashed as Dollar Rises,” Vancouver Sun, 21 May 2003, D5. 53 Michael Howlett, “Policy Venues, Policy Spillovers, and Policy Change: The Courts, Aboriginal Rights, and British Columbia Forest Policy,” in In Search of Sustainability, 120. 54 Greg Poelzer, “Aboriginal Peoples and Environmental Policy in Canada: No Longer at the Margins,” in Canadian Environmental Policy: Context and Cases, 2nd ed., eds. Debora L. VanNijnatten and Robert Boardman (Toronto: Oxford University Press, 2002), 97-99. 55 Howlett, “Policy Venues, Policy Spillovers, and Policy Change,” 130. 56 Personal interview, 13 May 2003. 57 Jeff Sallot, “Top Court Fells Native Logging: Sets Bar Higher on Establishing Land Rights,” Globe and Mail, 21 July 2005, A1. 58 Jeff Lee, “A New Deal for Natives,” Vancouver Sun, 29 July 2005, A1; and Miro Cernetig, “Give Natives a Seat at Premiers’ Conference, Campbell Urges,” Vancouver Sun, 10 August 2005, A1. For more information on the province’s New Relationship with Aboriginal People, see British Columbia, “The New Relationship with First Nations and Aboriginal People,” http://www.gov.bc.ca/arr/newrelationship/default.html (15 January 2007). 59 Personal interview, 28 August 2002. 60 British Columbia, Ministry of Labour, “BC Seeks Federal Support for Labour Standards in WTO,” News Release, 26 November 1999, 1.

Notes to pages 135-40 217

61 62 63 64 65

66 67 68

69 70 71

Personal interview, 14 July 2004. Personal interview, 28 August 2001 (second source). Personal interview, 2 August 2004. Personal interview, 28 August 2002. Robert Wolfe, “Transparency and Public Participation in the Canadian Trade Policy Process,” in Process Matters: Sustainable Development and Domestic Trade Policy, eds. Mark Halle and Robert Wolfe (Winnipeg: International Institute for Sustainable Development 2007), 31-32. Jeremy Wilson, Talk and Log: Wilderness Politics in British Columbia, 1965-1996 (Vancouver: UBC Press, 1998); and Cashore et al., eds., In Search of Sustainability. Personal interview, 28 August 2002. Gerald J. Schmitz, “Foreign Policy White Papers and the Role of Canada’s Parliament: Paradoxical but Not Without Potential,” paper presented at the annual meeting of the Canadian Political Science Association, London, 3 June 2005, 15. Wolfe, “Transparency and Public Participation in the Canadian Trade Policy Process,” 32-33. Ibid., 35-37. Keating and Jacquie Beasse, “Discerning the Public Interest,” 13-17.

Chapter 8: Dominant Ideas, Ideology, and Intrusive Neoliberalism 1 Kim Richard Nossal, The Politics of Canadian Foreign Policy, 3rd ed. (Scarborough: PrenticeHall, 1997), 138-43. 2 Alexander Wendt, Social Theory of International Politics (New York: Cambridge University Press, 1999), 93 and 135. 3 Terence Ball and Richard Dagger, Political Ideologies and the Democratic Ideal, 4th ed. (New York: Addison Wesley Longman, 2002), 5-9. 4 Wendt, Social Theory of International Politics, 114. 5 G. John Ikenberry, “Creating Yesterday’s New World Order: Keynesian ‘New Thinking’ and the Anglo-American Post-War Settlement,” in Ideas and Foreign Policy: Beliefs, Institutions, and Political Change, eds. Judith Goldstein and Robert O. Keohane (Ithaca: Cornell University Press, 1993), 84. 6 Martin Hollis and Steve Smith, Explaining and Understanding International Relations (Oxford: Clarendon, 1990), 70. 7 Robert Cox, “Social Forces, States, and World Orders: Beyond International Relations Theory,” Millennium 10, no. 1 (1981): 126-55; and Robert W. Cox with Timothy Sinclair, Approaches to World Order (New York: Cambridge University Press, 1996). 8 Steve Smith, “Reflectivist and Constructivist Approaches to International Theory,” in The Globalization of World Politics: An Introduction to International Relations, 2nd ed., ed. John Baylis and Steve Smith (Oxford: Oxford University Press, 2001), 233. For a discussion of “liberal” feminism, see Cynthia Enloe, Maneuvers: The International Politics of Militarizing Women’s Lives (Berkeley: University of California Press, 2000). J. Ann Tickner, Gendering World Politics: Issues and Approaches in the Post-Cold War Era (New York: Columbia University Press, 2001), offers a review of what Smith labels “standpoint” feminism. 9 Richard Ashley, “The Geopolitics of Geopolitical Space: Toward a Critical Social Theory of International Politics,” Alternatives 12, no. 4 (1987): 403-34; and David Campbell, Writing Security: United States Foreign Policy and the Politics of Identity (Manchester: Manchester University Press, 1992). 10 Smith, “Reflectivist and Constructivist Approaches to International Theory,” 243. See also, Friedrich Kratochwil, Rules, Norms, and Decisions (Cambridge: Cambridge University Press, 1989); N. Onuf, A World of Our Making: Rules and Rule in Social Theory and International Relations (Columbia: University of South Carolina Press, 1989); and Peter Katzenstein, ed., The Culture of National Security: Norms and Identity in World Politics (New York: Columbia University Press, 1996). 11 Stephen Brooks, Public Policy in Canada: An Introduction, 2nd ed. (Toronto: Oxford University Press, 1993), 3. See also Joseph A. Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper and Brothers, 1943); and E.E. Schattschneider, The Semi-Sovereign People (New York: Holt, Rinehart, and Winston, 1960).

218 Notes to pages 140-45

12 G. Bruce Doern and Richard W. Phidd, Canadian Public Policy: Ideas, Structure, and Process (Toronto: Metheun, 1983), 145. Other studies include Milton Friedman and Rose Friedman, Free to Choose (New York: Avon, 1979); George J. Stigler, The Citizen and the State (Chicago: University of Chicago Press, 1975); and Albert Breton, The Economic Theory of Representative Government (Chicago: University of Chicago Press, 1974). 13 Crawford Brough Macpherson, Democracy in Alberta (Toronto: University of Toronto Press, 1953); Seymour M. Lipset, Agrarian Socialism (New York: Anchor/Doubleday, 1968); John Porter, The Vertical Mosaic (Toronto: University of Toronto Press, 1965); and Leo Panitch, ed., The Canadian State (Toronto: University of Toronto Press, 1977). 14 Kim Richard Nossal, “Allison Through the (Ottawa) Looking Glass: Bureaucratic Politics and Foreign Policy in a Parliamentary System,” Canadian Public Administration 22, no. 4 (1979): 610-26. 15 Nelson Michaud, “Bureaucratic Politics and the Shaping of Policies: Can we Measure Pulling and Hauling Games?” Canadian Journal of Political Science 35, no. 2 (2002): 269-301. 16 Brian W. Tomlin, “Leaving the Past Behind: The Free Trade Initiative Assessed,” in Diplomatic Departures: The Conservative Era in Canadian Foreign Policy, 1984-1993, eds. Nelson Michaud and Kim Richard Nossal (Vancouver: UBC Press, 2001), 45-58. See also John Kingdon, Agendas, Alternatives, and Public Policies, 2nd ed. (New York: Harper Collins College Publishers, 1995). 17 Denis Stairs, “The Political Culture of Canadian Foreign Policy,” Canadian Journal of Political Science 15, no. 3 (1982): 688. 18 Heather Smith and Edna Keeble, (Re)Defining Traditions: Gender and Canadian Foreign Policy (Halifax: Fernwood, 1999), 22; Claire Turenne Sjolander, “Adding Women but Forgetting to Stir: Gender and Foreign Policy in the Mulroney Era,” in Diplomatic Departures; and Deborah Stienstra, “Can the Silence Be Broken? Gender and Canadian Foreign Policy,” International Journal 50, no. 1 (1994-95): 103-27. 19 Neil Bradford, Commissioning Ideas: Canadian National Policy Innovation in Comparative Perspective (Toronto: Oxford University Press, 1998). 20 Nossal, The Politics of Canadian Foreign Policy, 3rd ed., xv, and 138. 21 Nelson Wiseman, “Provincial Political Cultures,” in Provinces: Canadian Provincial Politics, ed. Christopher Dunn (Peterborough: Broadview, 1996), 56. 22 Donald E. Blake, “The Politics of Polarization: Parties and Elections in British Columbia,” in Politics, Policy, and Government in British Columbia, ed. R.K. Carty (Vancouver: UBC Press, 1996), 68. 23 Hugh J.M. Johnston, The Voyage of the Komagata Maru: The Sikh Challenge to Canada’s Colour Bar, 2nd ed. (Vancouver: UBC Press, 1989). 24 Blake, “The Politics of Polarization,” 68-70. 25 Donald E. Blake, “Value Conflicts in Lotusland: British Columbia Political Culture,” in Politics, Policy, and Government in British Columbia, 5. 26 Ibid., 5-6. 27 Michael Howlett and Keith Brownsey, “From Timber to Tourism: The Political Economy of British Columbia,” in Politics, Policy, and Government in British Columbia, 21-24. 28 Blake, “The Politics of Polarization,” 74. 29 Ibid., 74-75. See also Norman Ruff, “Redefining Party Politics in British Columbia: Party Renewal and Fragmentation,” in Party Politics in Canada, 7th ed., ed. Hugh Thorburn (Scarborough: Prentice-Hall, 1995), 485. 30 Michael Howlett and Keith Brownsey, “British Columbia: Politics in a Post-Staples Political Economy,” in The Provincial State in Canada: Politics in the Provinces and Territories, eds. Keith Brownsey and Michael Howlett (Peterborough: Broadview, 2001), 319-22. 31 David W. Edgington, “British Columbia and Its Regional Economies: An Overview of Research Issues,” Canadian Journal of Regional Science 27, no. 3 (2004): 303-19. 32 Macpherson, Democracy in Alberta. 33 Wiseman, “Provincial Political Cultures,” 54. 34 Nelson Wiseman, “The Pattern of Prairie Politics,” in The Prairie West: Historical Readings, 2nd ed., eds. Douglas Francis and Howard Palmer (Edmonton: University of Alberta Press, 1992), 654-56.

Notes to pages 145-57 219

35 Peter J. Smith, “Alberta: Experiments in Governance – from Social Credit to the Klein Revolution,” in The Provincial State in Canada, 281. 36 Ibid., 283-85. 37 John Richards and Larry Pratt, Prairie Capitalism (Toronto: McClelland and Stewart, 1979), 20. 38 Smith, “Alberta: Experiments in Governance,” 286-87. 39 Ibid., 288-89. 40 Larry Pratt and Ian Urquhart, The Last Great Forest: Japanese Multinationals and Alberta’s Northern Forests (Edmonton: New West, 1994). 41 Smith, “Alberta: Experiments in Governance,” 291-98. 42 Ibid., 298. 43 Wiseman, “Provincial Political Cultures,” 47-49. 44 John Terence Morley, Secular Socialists: The CCF/NDP in Ontario, A Biography (Montreal and Kingston: McGill-Queen’s University Press, 1984), 26, in Wiseman, “Provincial Political Cultures,” 49. 45 Nelson Wiseman, “Change in Ontario Politics,” in The Government and Politics of Ontario, 5th ed., ed. Graham White (Toronto: University of Toronto Press, 1997), 420. 46 Rodney Haddow and Thomas Klassen, Partnership, Globalization, and Canadian Labour Market Policy: Four Provinces in Comparative Perspective (Toronto: University of Toronto Press, 2006), 93. 47 Robert MacDermid and Greg Albo, “Divided Province, Growing Protests: Ontario Moves Right,” in The Provincial State in Canada, 178-83. 48 Haddow and Klassen, Partnership, Globalization, and Canadian Labour Market Policy, 96. 49 MacDermid and Albo, “Divided Province, Growing Protests,” 187. 50 Wiseman, “Change in Ontario Politics,” 420. 51 Rodney Haddow and Thomas R. Klassen, “Partisanship, Institutions, and Public Policy: The Case of Labour Market Policy in Ontario, 1990-2000,” Canadian Journal of Political Science 37, no. 1 (2004): 137-60. See also MacDermid and Albo, “Divided Province, Growing Protests,” 188-92. 52 Kenneth McRoberts, “Quebec: Province, Nation, or Distinct Society?” in Canadian Politics in the 21st Century, 5th ed., eds. Michael Whittington and Glen Williams (Scarborough: Nelson Thomson, 2000), 359-61. See also Kenneth McRoberts, Quebec: Social Change and Political Crisis, 3rd ed. (Toronto: Oxford University Press, 1993); and Kenneth McRoberts, Misconceiving Canada: The Struggle for National Unity (Toronto: Oxford University Press, 1997). 53 Reg Whitaker, “Images of the State in Canada,” in The Canadian State: Political Economy and Political Power, ed. Leo Panitch (Toronto: University of Toronto Press, 1977), 41. 54 Mason Wade, The French Canadians, 1790-1967: Volume II, 1911-1967 (Toronto: Macmillan, 1968), 903-9 and 1108. 55 François Rocher, “Québec in the Americas: From the FTA to the FTAA,” in Québec: State and Society, 3rd ed., ed. Alain-G. Gagnon (Peterborough: Broadview, 2004), 409-10. 56 Luc Bernier and Francis Garon, “State-Owned Enterprises in Québec: From Privatization to Globalization,” in Québec: State and Society, 204. 57 Rocher, “Québec in the Americas,” 412-17. 58 Bernier and Garon, “State-Owned Enterprises in Québec,” 208-10. 59 Ibid., 211-14. See also Luc Bernier, “The Beleaguered State: Québec at the End of the 1990s,” in The Provincial State in Canada, 139-62. 60 John Ruggie, Winning the Peace: America and World Order in the New Era (New York: Columbia University Press, 1996). 61 Howlett and Brownsey, “British Columbia: Politics in a Post-Staples Political Economy,” 311. 62 Smith, “Alberta: Experiments in Governance,” 279. 63 MacDermid and Albo, “Divided Province, Growing Protests,” 165. Chapter 9: Non-Central Governments’ Cross-Border Functional Relations 1 Gerard F. Rutan, “Legislative Interaction of a Canadian Province and an American State,” American Review of Canadian Studies 11, no. 4 (1981): 67-69; P.R. (Roff) Johannson, “Provincial International Activities,” International Journal 33, no. 2 (1978): 357-78; and Kal J.

220 Notes to pages 157-61

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3

4 5

6

7

8 9 10 11 12 13 14

15 16 17 18 19 20 21 22 23

Holsti and Thomas Allen Levy, “Canada and the United States: Transnational and Transgovernmental Relations,” International Organization 28, no. 4 (1974): 875-901. Debora L. VanNijnatten, “Analyzing the Canada-US Environmental Relationship: A MultiFaceted Approach,” American Review of Canadian Studies 33, no. 1 (2003); 93-121; Donald K. Alper, “Transboundary Environmental Relations in British Columbia and the Pacific Northwest,” American Review of Canadian Studies 27, no. 3 (1997): 359-83; and Barry G. Rabe, “The Politics of Ecosystem Management in the Great Lakes Basin,” American Review of Canadian Studies 27, no. 3 (1997): 411-36. Don Munton, “Acid Rain and Transboundary Air Quality in Canadian-American Relations,” American Review of Canadian Studies 27, no. 3 (1997): 345-58; Chris C. Park, Acid Rain: Rhetoric and Reality (New York: Methuen, 1987); and Jurgen Schmandt and Hilliard Roderick, eds., Acid Rain and Friendly Neighbours: The Policy Dispute Between Canada and the United States (Durham: Duke University Press, 1985). Leslie R. Alm and Leah Taylor, “Alberta and Idaho: An Implicit Bond,” American Review of Canadian Studies 33, no. 2 (2003): 197-219. Stephen de Boer, “Canadian Provinces, US States, and North American Integration: Bench Warmers or Key Players?” Choices: Canada’s Options in North America 8, no. 4 (2002): 2-24. Donald K. Alper, “Conflicting Transborder Visions and Agendas: Economic and Environmental Cascadians,” in Holding the Line: Borders in a Global World, eds. Heather N. Nicol and Ian Townsend-Gault (Vancouver: UBC Press, 2005), 222-37; Theodore H. Cohn, “Transportation and Competitiveness in North America: The Cascadian and San Diego-Tijuana Border Regions,” in Holding the Line, 200-21; and Stephen G. Tomblin, “Conceptualizing and Exploring the Struggle over Regional Integration,” in Regionalism in a Global Society: Persistence and Change in Atlantic Canada and New England, eds. Stephen G. Tomblin and Charles S. Colgan (Peterborough: Broadview, 2004), 79-106. Thomas Allen Levy, “Les Rôle des Provinces,” in Le Canada et le Québec sur la Scéne Internationale, ed. Paul Painchaud (Montreal: Les Presses de l’Université du Québec, 1977), 118-24. Johannson, “Provincial International Activities,” 365-66. Tomblin, “Conceptualizing and Exploring the Struggle over Regional Integration,” 87. Ross Gittell and Charles S. Colgan, “New England Regionalism: Economic Motivations and Barriers,” in Regionalism in a Global Society, 130. Tomblin, “Conceptualizing and Exploring the Struggle over Regional Integration,” 92-97. Gittell and Colgan, “New England Regionalism,” 130. Personal interview, 2 June 2003. New Brunswick, Department of Intergovernmental and International Relations, Prospering in a Global Community: New Brunswick’s International Strategy (Fredericton: Government of New Brunswick, 2003), 19. See also Charles H.W. Foster, “Bridging Borders: The Prospect for Environmental Regionalism in New England and Atlantic Canada,” in Regionalism in a Global Society, 275-76. Personal interviews, 29 May 2003 and 2 June 2003. Personal interview, 2 June 2003. Ibid. Personal interview, 28 May 2003. Personal interview, 29 May 2003. Newfoundland and Labrador has a selective approach to cross-border relations but prioritizes energy issues. Personal interview, 2 September 2005. Personal interview, 2 June 2003. Ibid. Ohio, Department of Natural Resources, “Taft Announces Historic Draft Agreements for the Protection of Great Lakes Waters,” News Release, 19 July 2004, 1-2. Council of Great Lakes Governors, “Shared Trade Office Initiative,” http://www.cglg.org/ projects/trade/index.asp (15 January 2005). See also Council of Great Lakes Governors, “Great Lakes International Trade Initiative,” http://www.cglg.org/projects/trade/factsheet. asp (15 January 2005).

Notes to pages 162-69 221

24 25 26 27 28

29 30 31 32 33 34 35 36 37 38 39 40

41

42

43 44 45 46 47 48 49 50 51 52 53

54 55 56 57

De Boer, “Canadian Provinces, US States, and North American Integration,” 11. Ibid., 19. Personal interview, 31 August 2005. Gittell and Colgan, “New England Regionalism,” 130-31. Martin Lubin, “Strains Between Governments at the Top, Hands Across the Border at the Base: The Role of Subnational Governments During the Bush-Chrétien Era and Beyond,” Canadian-American Public Policy 54 (2003): 29-30. Personal interview, 4 June 2003. Johannson, “Provincial International Activities,” 368. Holsti and Levy, “Canada and the United States,” 894. Midwestern Legislative Conference, Council of State Governments, Midwestern Legislative Conference Highlights (Fall 2003), 3. Midwestern Legislative Conference, “Mid-West Canada Relations Committee,” http://www. csgmidwest.org/Old_Site/MLC/committees/mwcanada_committee.htm (20 January 2005). Personal interview, 31 May 2004. Western Governors Association, 2003 Annual Report: Blazing New Trails (Denver: Western Governors Association, 2003), 12. Personal interview, 2 June 2004. Western Premiers and the Western Governors Association, “Memorandum of Understanding on Enhancing Cross-Border Cooperation to Fight Wildland Fires,” September 14, 2003. Personal interview, 2 June 2004. Manitoba, News Media Services, “New Brunswick and Manitoba Join Forces on Texas Mission,” News Release, 21 January 2005, 1. Alberta, International and Intergovernmental Relations, “Alberta-United States Relations,” http://www.iir.gov.ab.ca/international_relations/alberta_us_relations.asp (20 January 2005). Western Governors Association et al., “Protocol Among the Members of the Western Governors Association Governing the Siting and Permitting of Interstate Electrical Transmission Lines in the Western United States,” 23 June 2002. Western Governors Association et al., “Addendum to the Protocol Among the Members of the Western Governors Association Governing the Siting and Permitting of Interstate Electrical Transmission Lines in the Western United States,” 15 April 2004, 2. Alberta, International and Intergovernmental Affairs, US Pacific Northwest-Alberta Relations (Edmonton: Government of Alberta, 2004). Alberta, International and Intergovernmental Affairs, Montana-Alberta Relations (Edmonton: Government of Alberta, 2004). Personal interview, 19 July 2004. Ibid. Personal interview, 19 December 2002. British Columbia, Intergovernmental Relations Secretariat: Service Plan 2002/2005 (Victoria: Intergovernmental Relations Secretariat, 2002). Personal interview, 19 December 2002. Council of State Governments-West, “Who We Are,” http://www.csgwest.org/ (25 January 2003). Personal interview, 19 December 2002. Ibid. Pacific Northwest Economic Region, “Resolutions and Action Points: July 11-14 2004, Victoria, British Columbia,” http://pnwer.org/meetings/Summer_2004/FinalActionPoints.htm (22 January 2005). Cohn, “Transportation and Competitiveness in North America,” 205-6. Personal interview, 19 December 2002. Cohn, “Transportation and Competitiveness in North America,” 208. US Department of Transportation, Federal Highway Administration, “Freight News: USCanada International Mobility and Trade Corridor,” http://ops.fhwa.dot.gov/freight/pp/ PacificNW.pdf (27 January 2003).

222 Notes to pages 170-76

58 Commission on Global Governance, Our Global Neighbourhood (Oxford: Oxford University Press, 1995), 2, in Kim Richard Nossal, The Pattern of World Politics (Scarborough: PrenticeHall/Allyn and Bacon, 1998), 83. 59 G. Bruce Doern and Robert Johnson, “Multilevel Regulatory Governance: Concepts, Context, and Key Issues,” in Rules, Rules, Rules, Rules: Multilevel Regulatory Governance, eds. G. Bruce Doern and Robert Johnson (Toronto: University of Toronto Press, 2006), 1. 60 James N. Rosenau, “Governance in the Twenty-First Century,” Global Governance 1, no. 1 (1995): 29. 61 Robert O’Brien, Anne Marie Goetz, and Jan Aart Scholte, Contesting Global Governance: Multilateral Economic Institutions and Global Social Movements (Cambridge: Cambridge University Press, 2000). 62 Daniel Madar, Heavy Traffic: Deregulation, Trade, and Transformation in North American Trucking (Vancouver: UBC Press, 2000). 63 G. Bruce Doern, Richard J. Schultz, Michael Prince, and Margaret M. Hill, eds., Changing the Rules: Canadian Regulatory Regimes and Institutions (Toronto: University of Toronto Press, 1999). 64 Policy Research Institute, The Emergence of Cross-Border Regions Between Canada and the United States: Roundtable Synthesis Report, May 2006 (Ottawa: Government of Canada, 2006). See also Policy Research Institute, The Emergence of Cross-Border Regions: Interim Report, November 2005 (Ottawa: Government of Canada, 2005). 65 De Boer, “Canadian Provinces, US States, and North American Integration,” 17-20. 66 Foreign Affairs and International Trade Canada, “Trade in Goods, Agriculture: CanadaUnited States Consultative Committee on Agriculture,” http://www.international.gc.ca/ tna-nac/TG/agri-en.asp (3 March 2007). 67 Foreign Affairs and International Trade Canada, “Minutes of Canada-US Consultative Committee on Agriculture, May 8, 2006, Ottawa, Canada,” http://www.international.gc.ca/ tna-nac/TG/ccamin10-en.asp (3 March 2007). 68 Canada-United States Provinces-States Advisory Group, “Tri-National Accord – 2006-2007 Workplan,” http://www.nasda.org/Accord/index_en.htm (3 March 2007). Chapter 10: Emerging Regional Environmental and Labour Regimes 1 Jeremy Wilson, “The Commission for Environmental Cooperation and North American Migratory Bird Conservation: The Potential of the NAAEC Citizen Submission Procedure,” Journal of International Wildlife Law and Policy 6, no. 3 (2003): 205-31; John Kirton, “NAFTA’s Trade-Environment Regime and Its Commission for Environmental Cooperation: Contributions and Challenges Ten Years On,” Canadian Journal of Regional Science 25, no. 1 (2002): 207-34; and John J. Audley, Green Politics and Global Trade: NAFTA and the Future of Environmental Politics (Washington: Georgetown University Press, 1996). 2 Frederick Abbott, “From Theory to Practice: The Second Phase of the NAFTA Environmental Regime,” in Enforcing Environmental Standards: Economic Mechanisms as Viable Means, ed. Rudiger Wolfrum (Berlin: Springer, 1996), 451-78; and Pierre Marc Johnson and Andre Beaulieu, The Environment and NAFTA: Understanding and Implementing the New Continental Law (Washington: Island, 1996). 3 Alan Rugman, John Kirton, and Julie Soloway, Environmental Regulations and Corporate Strategy: A NAFTA Perspective (Oxford: Oxford University Press, 1999); Alan Rugman and John Kirton, “Multinational Enterprise Strategy and the NAFTA Trade and Environment Regime,” Journal of World Business 33, no. 4 (1998): 438-54; and John Kirton, “Commission for Environmental Cooperation and Canada-US Environmental Governance in the NAFTA Era,” American Review of Canadian Studies 27, no. 3 (1997): 459-86. 4 Don Munton and Geoffrey Castle, “Air, Water, and Political Fire: Building a North American Environmental Regime,” in Canadian Foreign Policy and International Economic Regimes, eds. A. Claire Cutler and Mark W. Zacher (Vancouver: UBC Press, 1992), 311-33. 5 Standing Committee on Foreign Affairs, Proceedings of the Standing Senate Committee on Foreign Affairs – Twenty-Fifth Proceedings on: The Examination of Negotiations for a North American Free Trade Agreement Among Canada, the United States, and Mexico and any Other Related Trade Developments, Thursday June 10, 1993 (Ottawa: Senate of Canada, 1993), 5.

Notes to pages 176-83 223

6 Ibid., 6. 7 Canada, Department of the Environment, North American Free Trade Agreement: Canadian Environmental Review (Ottawa: Supply and Services Canada, 1992). 8 Jim Stanford, Christine Elwell, and Scott Sinclair, Social Dumping Under North American Free Trade (Ottawa: Canadian Centre for Policy Alternatives, 1993), 1; and Quebec, Department of International Affairs, Quebec and the North American Free Trade Agreement (Quebec: Ministère des Affaires Internationales, 1993), 74. 9 Standing Committee on Foreign Affairs, Proceedings of the Standing Senate Committee on Foreign Affairs – Twentieth Proceedings on: The Examination of Negotiations for a North American Free Trade Agreement Among Canada, the United States, and Mexico and any Other Related Trade Developments, Wednesday, May 26, 1993 (Ottawa: Senate of Canada, 1993), 31. 10 Secretariat of the Commission for Environmental Cooperation, “North American Agreement on Environmental Cooperation Between the Government of Canada, the Government of the United Mexican States, and the Government of the United States of America,” 13 September 1993, 7-16. 11 Ibid., 19-27. 12 Zen Makuch and Scott Sinclair, The Environmental Implications of the NAFTA Environmental Side Agreement (Toronto: Canadian Environmental Law Association, 1993), 10. 13 Department of External Affairs and International Trade, North American Agreement on Environmental Cooperation Between the Government of Canada, the Government of the United Mexican States, and the Government of the United States of America (Ottawa: Supply and Services Canada, 1993), 28; and Makuch and Sinclair, The Environmental Implications of the NAFTA Environmental Side Agreement, 17. 14 Makuch and Sinclair, The Environmental Implications of the NAFTA Environmental Side Agreement, 6-18. 15 Department of External Affairs and International Trade, North American Agreement on Environmental Cooperation, 39-40. 16 Department of External Affairs and International Trade, North American Agreement on Labor Cooperation Between the Government of Canada, The Government of the United Mexican States, and the Government of the United States of America (Ottawa: Supply and Services Canada, 1993), 3. 17 Ibid., 30. 18 Stanford, Elwell, and Sinclair, Social Dumping Under North American Free Trade, 56. 19 Department of External Affairs and International Trade, North American Agreement on Labor Cooperation, 15. 20 Stanford, Elwell, and Sinclair, Social Dumping Under North American Free Trade, 58. 21 Department of External Affairs and International Trade, North American Agreement on Labor Cooperation, 17. 22 Stanford, Elwell, and Sinclair, Social Dumping Under North American Free Trade, 59. 23 Ibid., 61. 24 Department of External Affairs and International Trade, North American Agreement on Labor Cooperation, 40. 25 Personal interview, 11 February 1994. 26 Personal interview, 27 January 1994. 27 Canada, Department of Foreign Affairs and International Trade, “Notes for an Address by the Honourable Tom Hockin, Minister for International Trade, Following the Signing of the Legal Texts of the North American Environment and Labour Side Agreements,” 14 September 1993, 1-2. 28 Personal interviews, 10 February 1994 and 21 February 1994. 29 Personal interview, 27 January 1994. 30 Personal interview, 11 February 1994. 31 Canada, North American Agreement on Environmental Cooperation (NAAEC), Canadian Office, “Canadian Implementation,” http://www.naaec.gc.ca/eng/implementation/ implementation_e.htm (11 February 2005); and Canada, North American Agreement on Environmental Cooperation (NAAEC), Canadian Office, “Canadian Governmental Committee,” http://www.naaec.gc.ca/eng/implementation/govmt_commt_e.htm (11 February 2005).

224 Notes to pages 184-89

32 Department of Foreign Affairs and International Trade, “The North American Agreements on Labour and Environmental Cooperation,” http://www.dfait-maeci.gc.ca/nafta-alena/ side1-en.asp (11 January 2003). 33 North American Commission for Environmental Cooperation, “Citizen Submissions on Enforcement Matters: BC Mining,” http://www.cec.org/citizen/submissions/details/index. cfm?varlan=english&ID=41 (9 February 2005). 34 Secretariat, North American Commission for Environmental Cooperation, “Factual Record: BC Mining Submission (SEM 98-004),” 27 June 2003, 8. 35 Ibid., 10. 36 Kathryn Harrison, “Retreat from Regulation: The Evolution of the Canadian Environmental Regime,” in Changing the Rules: Canadian Regulatory Regimes and Institutions, eds. G. Bruce Doern, Margaret M. Hill, Michael J. Prince, and Richard J. Schultz (Toronto: University of Toronto Press, 1999), 130-31. 37 Mark S. Winfield, “Environmental Policy and Federalism,” in Canadian Federalism: Performance, Effectiveness, and Legitimacy, eds. Herman Bakvis and Grace Skogstad (Toronto: Oxford University Press, 2002), 126-27. 38 Harrison, “Retreat From Regulation,” 131. 39 Douglas Macdonald and Heather Smith, “Promises Made, Promises Broken: Questioning Canada’s Commitment to Climate Change,” International Journal 55, no. 1 (1999-2000): 107-24. 40 Secretariat, North American Commission for Environmental Cooperation, “Factual Record: BC Mining Submission,” 9. 41 North American Commission for Environmental Cooperation, “Citizen Submissions on Enforcement Matters: BC Hydro,” http://www.cec.org/citizen/submissions/details/index. cfm?varlan=english&ID=46 (9 February 2005). 42 For more information regarding these cases, see North American Commission for Environmental Cooperation, “Citizen Submissions on Enforcement Matters,” http://www.cec.org/ citizen/index.cfm?varlan=english (11 January 2003). 43 North American Commission for Environmental Cooperation, “Citizen Submissions on Enforcement Matters: BC Logging,” http://www.cec.org/citizen/submissions/details/index. cfm?varlan=english&ID=55 (9 February 2005). 44 Secretariat, North American Commission for Environmental Cooperation, “Factual Record: BC Logging Submission (SEM 00-004),” 27 June 2003, 7-14. 45 North American Commission for Environmental Cooperation, “Citizen Submissions on Enforcement Matters: Ontario Logging,” http://www.cec.org/citizen/submissions/details/ index.cfm?varlan=english&ID=70 (9 February 2005). 46 North American Commission for Environmental Cooperation, “Citizen Submissions on Enforcement Matters: Ontario Logging II,” http://www.cec.org/citizen/submissions/details/ index.cfm?varlan=english&ID=104 (9 February 2005). 47 North American Commission for Environmental Cooperation, “Citizen Submissions on Enforcement Matters: Oldman River I,” http://www.cec.org/citizen/submissions/details/ index.cfm?varlan=english&ID=34 (9 February 2005); North American Commission for Environmental Cooperation, Citizen Submissions on Enforcement Matters: Oldman River II, http://www.cec.org/citizen/submissions/details/index.cfm?varlan=english&ID=47 (9 February 2005); and North American Commission for Environmental Cooperation, “Citizen Submissions on Enforcement Matters: Oldman River III,” http://www.cec.org/citizen/ submissions/details/index.cfm?varlan=english&ID=102 (9 February 2005). 48 North American Commission for Environmental Cooperation, “Citizen Submissions on Enforcement Matters: Quebec Hog Farms,” http://www.cec.org/citizen/submissions/details/ index.cfm?varlan=english&ID=37 (9 February 2005); and North American Commission for Environmental Cooperation, “Citizen Submissions on Enforcement Matters: Quebec Automobiles,” http://www.cec.org/citizen/submissions/details/index.cfm?varlan=english& ID=105 (9 February 2005). 49 Joint Public Advisory Committee, Council of the Commission for Environmental Cooperation, “Lessons Learned: Citizen Submissions Under Articles 14 and 15 of the North American Agreement on Environmental Cooperation,” 6 June 2001, 6-8.

Notes to pages 189-91 225

50 Ibid., 9-11. 51 Ibid., 12. 52 Judith I. McKenzie, Environmental Politics in Canada: Managing the Commons into the TwentyFirst Century (Toronto: Oxford University Press, 2002), 242-68. 53 Kirton, “Commission for Environmental Cooperation and Canada-US Environmental Governance in the NAFTA Era,” 459-86. 54 Mark Winfield, “The North American Commission for Environmental Cooperation: A Case Study in International Environmental Governance,” paper presented at the Globalization, Multi-Level Governance, and Democracy Conference, Institute for Intergovernmental Relations, Queen’s University, May 2002, http://www.qsilver.queensu.ca/iigr/conferences/ globalization/pdfs/winfield.pdf, in Debora L. VanNijnatten, “Analyzing the Canada-US Environmental Relationship: A Multi-Faceted Approach,” American Review of Canadian Studies 33, no. 1 (2003): 93-123. See also Debora L. VanNijnatten, “Canadian-American Environmental Relations: Interoperability and Politics,” American Review of Canadian Studies 34, no. 4 (2004): 649-64. 55 VanNijnatten, “Analyzing the Canada-US Environmental Relationship.” 56 Don Munton, “Beyond and Beneath the Nation-State: Province-State Interactions and NAFTA,” paper presented to the International Studies Association Annual Conference, San Diego, 17 April 1996, in Kirton, “NAFTA’s Trade-Environment Regime and Its Commission for Environmental Cooperation.” 57 Wilson, “The Commission for Environmental Cooperation and North American Migratory Bird Conservation,” 207. 58 Peter O’Neil, “Cost of Mine Makeover Put as High as $100m: Source of Money for Polluted Britannia’s Rebirth as Tourism Site by 2010 Isn’t Fully Clear,” Vancouver Sun, 12 February 2005, B1.

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Hasenclever, Andreas, Peter Mayer, and Volker Rittberger. Theories of International Regimes. Cambridge: Cambridge University Press, 1997. Helliwell, John F. How Much Do National Borders Matter? Washington: Brookings Institution Press, 1998. Hira, Anil. “Regulatory Games States Play: Managing Globalization Through Sectoral Policy.” In Global Turbulence: Social Activists’ and State Responses to Globalization, ed. Marjorie Griffin Cohen and Stephen McBride, 41-58. Aldershot: Ashgate, 2003. Hoberg, George, ed. Capacity for Choice: Canada in a New North America. Toronto: University of Toronto Press, 2002. Hocking, Brian, ed. Foreign Relations and Federal States. Leicester: Leicester University Press, 1993. –. Localizing Foreign Policy: Non-Central Governments and Multilayered Diplomacy. New York: St. Martin’s Press, 1993. Hogg, Peter W. Constitutional Law of Canada: Volume 1. Toronto: Carswell, 1997. Hülsemeyer, Axel. Globalization and Institutional Adjustment: Federalism as an Obstacle. Aldershot: Ashgate, 2004. Katzenstein, Peter, ed. The Culture of National Security: Norms and Identity in World Politics. New York: Columbia University Press, 1996. Keating, Tom. Canada and World Order: The Multilateralist Tradition in Canadian Foreign Policy, 2nd ed. Toronto: Oxford University Press, 2002. Keohane, Robert O. After Hegemony: Cooperation and Discord in the World Political Economy. Princeton: Princeton University Press, 1984. Kirton, John. “Commission for Environmental Cooperation and Canada-US Environmental Governance in the NAFTA Era.” American Review of Canadian Studies 27, no. 3 (1997): 459-86. –. “Guess Who Is Coming to Kananaskis?” International Journal 56, no. 1 (2001-02): 101-27. –. “NAFTA’s Trade-Environment Regime and Its Commission for Environmental Cooperation: Contributions and Challenges Ten Years On.” Canadian Journal of Regional Science 25, no. 1 (2002): 207-34. Kukucha, Christopher J. “From Kyoto to the WTO: Evaluating the Constitutional Legitimacy of the Provinces in Canadian Foreign Trade and Environmental Policy.” Canadian Journal of Political Science 38, no. 1 (2005): 129-52. –. “Lawyers, Trees, and Money: British Columbia Forest Policy and the Convergence of International and Domestic Trade Considerations.” Canadian Public Administration 58, no. 4 (2005): 506-27. Lecours, André. “Paradiplomacy: Reflections on the Foreign Policy and International Relations of Regions.” International Negotiation 7 (2002): 91-114. Lemieux, Denis, and Ana Stuhec. Review of Administrative Action Under NAFTA. Toronto: Carswell, 1999. Lortie, Marc, and Sylvie Bedard. “Citizen Involvement in Canadian Foreign Policy: The Summit of the Americas Experience 2001.” International Journal 57, no. 3 (2002): 323-39. Lubin, Martin. “Strains Between Governments at the Top, Hands Across the Border at the Base: The Role of Subnational Governments During the Bush-Chrétien Era and Beyond.” Canadian-American Public Policy 54 (2003): 21-44. Macdonald, Douglas, and Heather Smith. “Promises Made, Promises Broken: Questioning Canada’s Commitment to Climate Change.” International Journal 55, no. 1 (1999-2000): 107-24. Madar, Daniel. Heavy Traffic: Deregulation, Trade, and Transformation in North American Trucking. Vancouver: UBC Press, 2000. Makuch, Zen, and Scott Sinclair. The Environmental Implications of the NAFTA Environmental Side Agreement. Toronto: Canadian Environmental Law Association, 1993. McBride, Stephen. Paradigm Shift: Globalization and the Canadian State. Halifax: Fernwood, 2001. McKenzie, Judith I. Environmental Politics in Canada: Managing the Commons into the TwentyFirst Century. Toronto: Oxford University Press, 2002.

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McRoberts, Kenneth. Misconceiving Canada: The Struggle for National Unity. Toronto: Oxford University Press, 1997. Michaud, Nelson. “Canada and Quebec on the World Stage: Defining New Rules?” In Canada Among Nations 2006: Minorities and Priorities, ed. Andrew F. Cooper and Dane Rowlands, 232-50. Montreal and Kingston: McGill-Queen’s University Press, 2006. Michelmann, Hans J., and Panayotis Soldatos, eds. Federalism and International Relations: The Role of Subnational Units. Oxford: Clarendon, 1990. Montpetit, Éric. Misplaced Distrust: Policy Networks and the Environment in France, the United States, and Canada. Vancouver: UBC Press, 2003. Nicol, Heather N., and Ian Townsend-Gault, eds. Holding the Line: Borders in a Global World. Vancouver: UBC Press, 2005. Nossal, Kim Richard. The Politics of Canadian Foreign Policy, 3rd ed. Toronto: Prentice-Hall, 1997. Ostry, Sylvia. The Post-Cold War Trading System: Who’s on First. Chicago: University of Chicago Press, 1997. Panitch, Leo, ed. The Canadian State: Political Economy and Political Power. Toronto: University of Toronto Press, 1977. Pratt, Larry, and Ian Urquhart. The Last Great Forest: Japanese Multinationals and Alberta’s Northern Forests. Edmonton: New West Press, 1994. Putnam, Robert D. “Diplomacy and Domestic Politics: The Logic of Two-Level Games.” International Organization 42, no. 3 (1988): 427-60. Rabe, Barry G. “The Politics of Ecosystem Management in the Great Lakes Basin.” American Review of Canadian Studies 27, no. 3 (1997): 411-36. Richards, John, and Larry Pratt. Prairie Capitalism. Toronto: McClelland and Stewart, 1979. Robinson, Ian. “Neo-Liberal Trade Policy and Canadian Federalism Revisited.” In New Trends in Canadian Federalism. 2nd ed., ed. François Rocher and Miriam Smith, 197-242. Peterborough: Broadview, 2003. Simeon, Richard. “Important? Yes. Transformative? No: North American Integration and Canadian Federalism.” In The Impact of Global and Regional Integration on Federal Systems: A Comparative Analysis, ed. Harvey Lazar, Hamish Telford, and Ronald Watts, 125-72. Montreal and Kingston: McGill-Queen’s University Press, 2003. Sjolander, Claire Turenne, Heather Smith, and Deborah Stienstra, eds. Feminist Perspectives on Canadian Foreign Policy. Toronto: Oxford University Press, 2003. Skogstad, Grace. “Canadian Agricultural Trade Policy: Continuity Amidst Change.” In Canada Among Nations 1999: A Big League Player? eds. Fen Osler Hampson, Martin Rudner, and Michael M. Hart, 73-90. Toronto: Oxford University Press, 1999. –. “Canadian Federalism, Internationalization, and Quebec Agriculture: Dis-Engagement, Re-Integration?” Canadian Public Policy 24, no. 1 (1998): 27-48. –. “Globalization and Public Policy: Situating Canadian Analyses.” Canadian Journal of Political Science 33, no. 4 (2000): 805-28. Smith, Heather, and Edna Keeble. (Re)Defining Traditions: Gender and Canadian Foreign Policy. Halifax: Fernwood, 1999. Smith, Miriam. A Civil Society: Collective Actors in Canadian Political Life. Peterborough: Broadview, 2005. Stone, Frank. Canada, the GATT, and the International Trade System, 2nd ed. Montreal: Institute for Research on Public Policy, 1992. Tomblin, Stephen G., and Charles S. Colgan, eds. Regionalism in a Global Society: Persistence and Change in Atlantic Canada and New England. Peterborough: Broadview, 2004. VanNijnatten, Debora L. “Analyzing the Canada-US Environmental Relationship: A MultiFaceted Approach.” American Review of Canadian Studies 33, no. 1 (2003): 93-121. VanNijnatten, Debora L., and Robert Boardman, eds. Canadian Environmental Policy: Context and Cases, 2nd ed. Toronto: Oxford University Press, 2002. Wendt, Alexander. Social Theory of International Politics. New York: Cambridge University Press, 1999.

230

Selected Bibliography

Wilson, Jeremy. Talk and Log: Wilderness Politics in British Columbia, 1965-1996. Vancouver: UBC Press, 1998. Winham, Gilbert R. The Evolution of International Trade Agreements. Toronto: University of Toronto Press, 1992. Wolfe, Robert. Farm Wars: The Political Economy of Agriculture and the International Trade Regime. New York: St. Martin’s Press, 1998. Wolfe, Robert, and Matthew Mendelsohn. “Values and Interests in Attitudes Toward Trade and Globalization: The Continuing Compromise of Embedded Liberalism.” Canadian Journal of Political Science 38, no. 1 (2005): 45-68.

Index

Note: Please refer to the List of Abbreviations on page xi for the full names of abbreviations. Abelson, Don, 73-74 Aboriginal groups. See First Nations ACOA (Atlantic Canada Opportunities Agency), 39-40 aeronautics industry: Alberta, 21; Bombardier, 54, 110, 116; Manitoba, 14, 24; Prince Edward Island, 32, 116; Quebec, 17, 19, 36, 110 AFPA (Alberta Forest Products Association). See Alberta; Alberta Forest Products Association Agreement on Agriculture. See WTO; Agreement on Agriculture agriculture: Alberta, 13, 36, 69, 102-4, 166; British Columbia, 79, 90, 114-15, 144; Canadian Alliance of Agri-Food Exporters, 103; Canadian Federation of Agriculture, 103; Canadian Wheat Board, 15, 102; dairy, 101-3; dominant ideas, 117, 139; FTA, 51; GATT, 47, 112; international negotiations, 101-4; Manitoba, 85, 103, 113, 126, 165; NAFTA, 103; New Brunswick, 115; Ontario, 73-74, 122-24, 196; Prince Edward Island, 65, 88, 116, 130; provincial jurisdiction, 3, 8, 54, 99, 198; Quebec, 89, 110, 112, 117-18, 122, 125, 150, 153; Saskatchewan, 67, 86, 103, 113, 127; SCM, 103-4, 195; societal consultation, 120-27, 130; supply management, 101-3; Uruguay Round negotiations, 103-4; US-Canada Consultative Committee on Agriculture, 173; WTO, 102-4 AHST (Alberta Heritage Savings Trust Fund). See Alberta; Alberta Heritage Savings Trust Fund Air Canada, 14 AIT (Agreement on Internal Trade), 41, 77, 85-87, 92, 150 Alberta: aeronautics industry, 21; Agenda and Priorities Committee, 69; agriculture, 13, 36, 69, 102-3, 166; AIT, 85; Alberta

Forest Products Association, 113-14; Alberta Heritage Savings Trust Fund, 145; APEC, 85; automotive industry, 21; BSE, 69, 166-67, 171; bureaucratic coordination, 81, 88-89, 92, 195; bureaucratic expertise, 85; bureaucratic resources, 85; Canadian Association of Petroleum Producers, 113; Canadian Wheat Board, 15, 102; CANAMEX, 166-67; Chile, 85; China, 14; Costa Rica, 85; Council of the Federation, 56, 85; cross-border relations, 16667, 168, 171-72, 173; CTrade, 56, 194; dominant ideas, 144-46, 147, 150, 152, 153, 196; energy, 13, 14, 21, 36, 40-42, 46, 61, 69, 89, 95, 113, 145, 166-67; federalprovincial consultation, 46-49, 52, 56, 58, 194; FTA, 49; GATT, 48; Germany, 19; Getty, Don, 49, 68, 146; healthcare, 38; Horner, Doug, 102; Idaho, 157; investment, 84-85, 128, 145, 167; Japan, 19, 146; Klein, Ralph, 38, 61, 68, 128, 146, 150, 152, 166; Klein Revolution, 128; labour, 128, 144; legal counsel, 85; legislature, 95; Lougheed, Peter, 46, 49, 68, 146; Mexico, 21; Ministry of International and Intergovernmental Relations, 84-85, 89, 95, 128, 166; Montana Alberta Bilateral Advisory Council, 167, 171; NAFTA, 52, 85, 95; NAFTA Side Deals, 182-84; natural resources, 13, 40; New Mexico, 166; Oldman River, 45, 128, 184, 187-88, 189; Pacific Rim, 36; political executive, 68-69, 80; Progressive Conservative Party, 40, 68, 128, 146; provincial trade profile, 19-21; sectoral consultation, 113-14; services, 84-85, 105, 106-7, 113-14, 117, 128, 146; Social Credit, 127, 145, 151; societal consultation, 127-28, 137; softwood lumber, 89, 92, 95, 113; Softwood Lumber Trade Council, 113; Stelmach, Ed, 38, 146; subsidies, 104, 145; telecommunications, 14;

232

Index

TILMA, 85; Trade Policy Branch, 84-85, 114; Trade Policy Committee, 88-89; United Farmers of Alberta, 144-45, 150; United States Congress, 3, 167; University of Alberta, 85; Washington office, 3; welfare, 38; Western Centre for Economic Research, 85; wheat, 14, 21, 152; WTO, 114. See also petroleum alcohol: acyclic, 19; dominant ideas, 116; ether, 28; GATT dispute panel, 99-100, 116; provincial jurisdiction, 3, 85, 99, 101, 198. See also wine Aldecoa, Francisco, 7 Algeria, 15, 17 Allison, Graham, 141 aluminum, 17, 19 Ambrose, Rona, 40 Angola, 28 APEC, 55, 85 Asbestos Corporation, 46 Asbestos Strike, 149 Asia-Pacific, 14, 55, 84, 96, 131 Asia-Pacific Gateway Initiative, 91 Atlantic Economic Forum, 159 Australia, 100, 102, 150, 161 Auto Pact. See automotive industry; Auto Pact automotive industry: Alberta, 21; Auto Pact, 36, 51, 73; automobile parts, 16, 17, 24, 30, 73; British Columbia, 14, 22; Manitoba, 24; Mexico, 177: Nova Scotia, 14, 30; Ontario, 15, 17, 36, 73, 82, 109; Prince Edward Island, 32; Quebec, 17, 175, 184, 188; Saskatchewan, 26; trucks, 15, 17, 22, 26; US disputes, 46 Avantel, 14 Balthazar, Louis, 9 Barlow, Maude, 74, 129 Barrett, Dave, 76, 142-43 Baylis, Kathy, 102 BC Hydro, 142, 163-64, 175, 180-86, 189-90 Bélanger, Louis, 9 Belgium, 28, 44, 88 Bennett, Bill, 76, 143 Bennett, W.A.C., 76, 142, 163 Bernier, Ivan, 9 Bernier, Luc, 69 Binette, André, 9 Black, David, 8 Blake, Donald, 141 blueberries, 53, 65, 116, 160 BNA Act, 40, 44-45, 148, 193 Bombardier. See Aeronautics Industry; Bombardier Boundary Waters Treaty, 190 Bourassa, Robert, 69-70, 111-12, 149-50 bovine animals, 21, 26 Bradford, Neil, 141 Brazil, 26, 28, 36, 54, 110, 161 Bretton Woods, 5, 151

Britannia Mine, 184-86, 191 British Columbia: agriculture, 79, 90, 11415, 144; Albanian recommendation, 78; Asia-Pacific, 14, 84, 96, 131; automotive industry, 14, 22; Barrett, Dave, 76, 142-43; BC Aboriginal Fisheries Commission, 186; BC-ACTS, 115; BC Agri-Food Trade Council, 115; BC Federation of Labour, 76, 78; BC Forest Practices Code, 187; BC Hydro, 142, 163-64, 175, 180-86, 189-90; BC Logging, 175, 187, 191; BC Mining, 175, 184-87, 189-91; BC Mining Association, 191; BC Progress Board, 144; BC Wildlife Federation, 186; Bennett, Bill, 76, 143; Bennett, W.A.C., 76, 142, 163; Britannia Mine, 184-86, 191; bureaucratic appointments, 77-79; bureaucratic coordination, 90, 92; bureaucratic reorganization, 84; bureaucratic resources, 84; Campbell, Gordon, 76, 79, 135, 151, 167, 172, 196; CCF, 142, 151; China, 22; Clark, Glen, 77-78, 131, 135, 144, 151, 196; Clayoquot Sound, 132; Coastal Forest Industry Dispute Settlement Act, 132; COFI, 93; Copper Beach Estates, 185; cross-border relations, 163, 167-69, 171-72; Crown Agencies Secretariat, 76; David Suzuki Foundation, 131, 187; Dix, Adrian, 77; dominant ideas, 117, 141-44, 150-52, 196; energy, 13-14, 21-22, 143-44, 186; Environmental Mining Council of BC, 184; First Nations, 120, 130, 132-33, 144; Forest Action Network, 131; Forest Industrial Relations Association, 132; Forest Renewal BC, 131; Forest Revitalization Plan, 133; Friends of Clayoquot Sound, 131; FTAA, 96, 114, 134; Gallagher, Tim, 77-78; GATS, 79, 105, 117, 135; GATT, 48; Georgetti, Ken, 76; government procurement, 114; Greenpeace, 131, 187; Harcourt, Mike, 76-78, 130-31, 144, 151, 196; hydroelectricity, 142, 164, 180-86, 189-90; Industrial, Wood, and Allied Workers union, 131-32; Intergovernmental Relations Office, 76; Intergovernmental Relations Secretariat, 76, 79, 167; Interior Forest Relations Association, 132; investment, 77-79, 95-96, 114; Japan, 21-22; Jobs and Timber Accord, 131-32; labour, 76-77, 96, 114-15, 120, 130-35, 136, 141, 143, 151, 196; legalization of trade policy, 93; legislative committees, 95-96; Liberal Party, 76, 79, 96, 115, 131-33, 142-44, 151, 167, 196; MAI, 95-96, 134-36; Mexico, 22; Ministry of Agriculture and Food, 114; Ministry of Agriculture, Food, and Fisheries, 79, 90; Ministry of Business Development, 84; Ministry of Economic Development, 79; Ministry of Employment and Investment, 77, 114; Ministry of Forests, 79, 90, 115, 133-34; Ministry of Small Business and Economic Development, 84; Mulroney,

Index

Brian, 93; NAAEC, 164, 175, 184-87, 18991; NAFTA, 52, 95-96, 118, 134-35, 152; NAFTA negotiation and implementation, 76-79, 83-84, 114, 194; Nanaimo Commonwealth Holding Society, 143; NDP, 76-79, 83-84, 96, 114-15, 130-35, 142-43, 151-52, 196; Nisga’a Treaty, 132-33; Ontario, 77; political executive, 62, 76-79, 80; Pollution Control Act, 185; provincial trade profile, 21-23; Public Affairs Bureau, 76; Ruff, Norman, 76; sectoral consultation, 114-15; services, 79, 105, 114, 117, 134-35, 142-43, 151; Skelly, Bob, 143; Smallwood, Joan, 96, 134; Social Credit Party, 76, 78, 84, 130, 139, 142-43, 150, 196; societal consultation, 130-35; softwood lumber, 22, 36, 84, 92-93, 115, 130-36, 143, 151-52; subsidies, 99, 114, 134, 142, 179; TILMA, 85; Trade and Competitiveness Branch, 79, 84, 114; Trade Policy Branch, 77-79, 84, 90, 114-15, 134-35; trade promotion, 77, 167; Vancouver Sun, 76; van Dongen, John, 115; Vander Zalm, Bill, 78, 143; Vaughn Palmer, 77-78; Waste Management Act, 185; water, 96; Wilson, Gordon, 143; wine, 99-100; World Wildlife Fund, 131; WTO, 114, 118, 134-35; Zirnhelt, David 76 British Columbia Federation of Labour. See British Columbia; BC Federation of Labour Brock, Kathy, 123, 126, 128 Brooks, Stephen, 110 Brown, Douglas, 9, 48, 51, 99-100 Brown, W. Mark, 13 Brownsey, Keith, 143, 152 Brundtland Commission, 190 BSE, 61, 67, 69, 166-67, 171 Buchanan, Elmer, 73 Buker, Peter, 64, 65 bureaucratic coordination, 88-92 bureaucratic expertise, 53-55, 81-82, 85, 88-93, 110, 195 bureaucratic reorganization: British Columbia, 84; DFAIT, 90; External Affairs, 47; legislatures, 95, 97; New Brunswick, 87-88; Nova Scotia, 64 bureaucratic resources: Alberta, 85; American states, 164, 172; British Columbia, 84; budgets, 195; federal government, 91; federal-provincial consultation, 53; Manitoba, 85-86, 127; NAFTA Side Deals, 183; Quebec, 83; services, 104; Saskatchewan, 86, 127; societal consultation, 127, 137 Byers, R.B., 94 California, 3, 14, 17, 21, 22, 165, 168 Calvert, Lorne, 67 Cameron, Donald, 64 Campbell, Gordon: bureaucratic appointments, 79; dominant ideas, 151; political

executive, 76; societal consultation, 135, 196; WGA, 168, 172 Campbell, Kim, 185 Canada Health Act, 38 Canada v. Hydro Quebec, 45 Canadian Environmental Protection Act, 185 Canadian Nature Federation, 187 Canadian Parks and Wilderness Society, 187 Canadian Wheat Board, 15, 102 CANAMEX, 166-67; 171 CANPASS, 169 CAP (Canada Assistance Plan), 37-38 CAPP (Canadian Association of Petroleum Producers). See Alberta; Canadian Association of Petroleum Producers. See also petroleum Carney, Pat, 50 CCA (US-Canada Consultative Committee on Agriculture), 173 CCF (Co-operative Commonwealth Federation). See CCF; various provinces CCPA (Canadian Centre for Policy Alternatives), 124 CCTN (Canadian Coordinator for Trade Negotiations), 48, 50-51, 194 CFTA (Committee for the Free Trade Agreement), 51-52, 194 CGLG (Council of Great Lakes Governors), 161, 171, 173, 190, 197 Chambers, Edward, 13 Chaoulli v. Quebec (Attorney General), 38, 105 Chapter 11. See NAFTA Chapter 11 Charest, Jean, 55, 69, 71, 126, 150, 196 Chemical Wood Pulp, 19, 21, 28, 30 Cheney, Dick, 61 Chile, 85, 100 China: Alberta, 14-15, 19; British Columbia, 22; Council of Great Lakes Governors, 161; Manitoba, 24; Newfoundland and Labrador, 32, 34; Nova Scotia, 30; Saskatchewan, 14-15, 24, 26; Quebec, 17, 150 Chirac, Jacques, 72 Chrétien, Jean, 39, 56, 61, 75, 93 CHST (Canada Health and Social Transfer), 38 Citizens Insurance Company v. Parsons, 45 Ciuriak, Dan, 62 Clark, Glen, 77-78, 131, 135, 144, 151, 196 Clark, Joe, 49 Clarkson, Stephen, 12 Clement, Wallace, 110 climate change, 3, 160, 190 Clinton, Bill, 177 CNAFTN (Committee for North American Free Trade Negotiations), 53, 194 COFI (Council of Forest Industries), 93 Cohn, Ted, 102 Cold War, 15, 147 Columbia River Treaty, 163

233

234

Index

Commission on Global Governance, 169-70 Conference of New England Governors and Eastern Canadian Premiers, 65, 66, 15960, 163, 171, 173, 190 Connecticut, 30 Cooper, Andrew, 8 Copper Beach Estates, 185 corporatism, 110-12, 118, 120, 122, 124-26, 148 cosmopolitan democracy, 121 Costa Rica, 85 Council of Canadians, 128, 129, 136, 137 Council of Great Lakes Governors. See CGLG Council of the Federation, 56, 71, 85 Council of Maritime Premiers, 65 Council of Ministers of the Environment, 185 countervailing duties, 104, 164 Courchene, Thomas, 12, 37 Coyne, Andrew, 3 Crawford, Mark, 104-5 Crown Zellerbach, 45 crustaceans, 28, 30, 32, 34 CSG-West (Council of State Governments West), 158, 167-68, 171 CTrade, 4, 53-58, 85, 90-91, 194 CTTC (Canadian Trade and Tariffs Committee), 47-48, 194 Cuba, 30 culture, 10, 51, 70, 89 CUPE (Canadian Union of Public Employees), 106 dairy: Ontario, 102; Prince Edward Island, 116; PSAG, 173; Quebec, 36, 102, 112, 117-18; supply management, 101-3 Davis, Bill, 72 de Boer, Stephen, 9, 161-62, 172 Department of External Affairs, 47, 49 departmentalized cabinet, 61 Dewey-Ballantine, 93 DFAIT, 53, 62, 90-91, 141. See also Department of External Affairs, Foreign Affairs Canada, and ITCan DFO (Department of Fisheries and Oceans), 186, 188 Dix, Adrian, 77 Doer, Gary, 67-68, 86, 165-66, 172 Doern, G. Bruce, 9, 49, 72, 77, 170 Doha Round, 103-4, 117, 136 dominant ideas: Alberta, 144-46, 147, 150, 152, 153, 196; British Columbia, 117, 14144, 150-52, 196; definition, 10, 139-41; ideology, 10, 139-41, 153, 196; intrusive neo-liberalism, 150-53; Ontario, 146-48, 151-52, 196; participatory government, 10, 120, 137, 153, 196; Quebec, 117, 14850, 151, 152-53, 196; sectoral priorities and regional economies, 10, 12, 42, 11618, 153, 196

DIST (Department of Industry Science and Technology), 39 DREE (Department of Regional Economic Expansion), 39, 159 DRIE (Department of Regional Industrial Expansion), 39 Dunn, Christopher, 62 Duplessis, Maurice, 69, 149, 152 Dyck, Rand, 125 Dymond, William, 12 embedded liberalism, 6, 151 Embraer, 55 Energy: Alberta, 13-14, 21, 36, 40-42, 46, 61, 69, 89, 95, 113, 145, 166-67; British Columbia, 13-14, 21-22, 143-44, 186; Conference of New England Governors and Eastern Canadian Premiers, 159, 171; dominant ideas, 139; electrical, 19, 22, 24; FTA, 51; Manitoba, 24, 165; Ontario, 7374; provincial jurisdiction, 3, 40, 198; Quebec, 19, 36, 149, 162-63, 171-72; Saskatchewan, 67; Western Premiers Conference, 165. See also petroleum English, John, 94 Environment Canada, 185-87 Environmental Management Framework Agreement, 185-86 Environmental Mining Council of BC, 184 EPF (Established Programs Financing), 37-38 Equatorial Guinea, 28 Eves, Ernie, 72, 148, 152 executive federalism: Canada-US relations, 157; CTrade, 57-58, 194; definition of, 47; FTA, 9; GATT, 47, 194; international trade, 4, 43, 194; internationalization of, 43, 47, 57, 173, 197; role of bureaucracy, 47; transparency deficit, 43 FAC (Foreign Affairs Canada), 90-91 Farnworth, Mike, 96 FEDNOR (Federal Economic Development for Northern Ontario), 39-40 fertilizer, 26, 32 Filmon, Gary, 67-68 FIRA, 149 First Nations: British Columbia, 120, 130, 132-33, 144; Manitoba, 126; Ontario, 12324, 137, 196; Prince Edward Island, 130; societal interests, 10, 136. See also Royal Commission on Aboriginal Peoples fiscal policy, 37-38 Fisheries Act, 186-88 Florida, 32 FPCD (Federal Provincial Coordination Division), 47 France: Alberta, 19; Nova Scotia, 30; Prince Edward Island, 32; Quebec, 9, 17, 71-72, 83, 96; Vienna Convention, 44 Friends of the Oldman River Society, 45 Fry, Earl, 9

Index

FTA: agriculture, 51; Alberta, 49; Auto Pact, 51; British Columbia, 49, 83; Carney, Pat, 50; CCTN, 50; CFTA, 51, 52; Clark, Joe, 49; culture, 51; energy, 51; executive federalism, 9; federal-provincial consultation, 43, 49-51; federal-state clause, 44; Getty, Don, 49, 68, 145-46; investment, 51; ITAC, 108; Lougheed, Peter, 49; Manitoba, 49; Mulroney, Brian, 49; New Brunswick, 87,115; Nova Scotia, 87; Ontario, 49, 72-73, 147; Prince Edward Island, 88; procurement, 108; Quebec, 9, 49, 70, 11112, 118, 150; Reisman, Simon, 49-50; SAGIT, 108; Saskatchewan, 49; services, 51; subsidies, 50, 111; TNO, 49-51; trade statistics, 13, 193; wine, 51; United States Congress, 51 FTAA: British Columbia, 96, 114, 134; Ontario, 83; Quebec, 70, 112, 118, 125; security, 136 Furtan, Hartley, 102 Gallagher, Tim, 77-78 GATS (General Agreement on Trade in Services): access for professionals, 106, 117; Alberta, 114, 117; Article I.3, 105; British Columbia, 79, 105, 117, 135; financial services, 108; Mode IV, 106, 117; New Brunswick, 117; Ontario, 75, 106, 117; Quebec, 126; societal consultation, 135, 137 GATT: Alberta, 48; alcohol dispute panel, 99-100, 116; British Columbia, 48; CCTN, 48, 50-51, 194; CTTC, 47-48, 194; executive federalism, 47, 194; federal-provincial consultation, 43, 47-49, 194; federal-state clause, 43-44, 48, 100; international cooperation, 8; Kennedy Round, 47; liquor and wine, 48; NAFTA Side Deals, 179; non-tariff barriers, 47; Ontario, 48, 99100, 151; provincial jurisdiction, 3, 19394; provincial trade patterns, 4; Quebec, 48, 70, 112; services, 105; Tokyo Round, 47-48, 194. See also Uruguay Round GDA (General Development Agreement), 39 Georgetti, Ken, 76 Gérin-Lajoie Doctrine. See Quebec; GérinLajoie Doctrine Germany: Alberta, 19; Manitoba, 24; Newfoundland and Labrador, 32, 34; Nova Scotia, 30; Ontario, 15; Quebec, 17, 148 Getty, Don, 49, 68, 145-46 global governance. See Governance; global Godbout, Adélard, 69 Goldenberg, Eddie, 93 Gosselin, Guy, 9 Gourevitch, Peter, 6 governance: definition, 169-70; global, 170; multilevel, 11, 170-75, 184, 188, 190, 192, 197; NAAEC, 175-76, 184, 189-92, 197; post-war institutions, 5, 8; provincial politics, 65, 147, 152; regime theory, 6,

157, 170, 197; regulatory, 124, 170; supranational, 172, 174, 197 government procurement: British Columbia, 114; province-state relations, 157; provincial jurisdiction, 3, 48, 93, 99, 1078, 193; WTO GPA, 162 GPA (Government Procurement Agreement). See WTO; GPA Grace, Joan, 68 Great Lakes Charter, 124, 161, 190 Greenpeace, 131, 187 Grimes, Roger, 66 Haddow, Rodney, 147-48 Hale, Geoffrey, 12 Hamm, John, 64 Harcourt, Mike, 76-78, 130-31, 144, 151, 196 Harel, Louise, 97 Harris, Mike, 72, 75, 148, 152 Harrison, Kathryn, 185-86 Hart, Michael, 9, 12, 49 Hatfield, Richard, 62 Heinbecker, Paul, 3 Helliwell, John, 13 Higgott, Richard, 8 Hill, Margaret, 170 Hoberg, George, 10, 12, 131 Hockin, Tom, 183 Hocking, Brian, 7 Hoekman, Bernard, 107 Hoeven, John, 164 Hogg, Peter, 95 Horner, Doug, 102 House of Commons, 75, 95, 121 Howlett, Michael, 133, 143, 152 hydroelectricity: British Columbia, 142, 164, 180-86, 189-90; Newfoundland and Labrador, 130; Ontario, 40; Quebec, 45, 69, 149-50, 161 Hyson, Stewart, 63 Illinois, 21, 24, 26 IMTC (International Mobility and Trade Corridor), 167, 169, 171 India, 26, 28, 30, 107 institutionalized cabinet, 61, 62, 72, 79 integration, North America. See NAFTA; North American integration interest groups, 121, 123, 126, 129, 170 International Joint Commission (IJC), 158, 190 Investment: Alberta, 84-85, 128, 145, 167; and trade, 13, 34; British Columbia, 7779, 95-96, 114; federal bureaucracy, 90-91; FTA, 51; NAFTA Chapter 11, 101, 176-77; New Brunswick, 63; Newfoundland and Labrador, 66, 88; Nova Scotia, 87; Ontario, 72, 82, 109; Parliament, 95; provincial jurisdiction, 3, 34, 39, 193; Quebec, 46, 69-70, 149, 151-52, 196; Saskatchewan, 67

235

236

Index

Iowa, 26 Iraq, 14, 34 iron ore, 32, 34 ITAC (International Trade Advisory Committee), 4, 108, 119, 195 Italy, 15, 17, 149 ITCan (International Trade Canada), 90-91 Japan: Alberta, 19, 146; British Columbia, 21-22; Manitoba, 22; New Brunswick, 28; Newfoundland and Labrador, 32; Nova Scotia, 30; Ontario, 15, 109; Saskatchewan, 26 JCPC, 45, 193 Johnson, Daniel, 69 Johnson, David, 64 Johnson, Robert, 170 Johnstone, Robert, 73 Keating, Michael, 7 Keeble, Edna, 141 Kershaw, James, 63 Keynesian economics, 5, 147, 151 Kincaid, John, 7 Kirton, John, 175, 190 Klassen, Thomas, 147-48 Klein, Ralph, 38, 61, 68, 128, 146, 150, 152, 166 Kostecki, Michel, 107 Kyoto Protocol, 71, 101, 186, 190. See also UN Framework Convention on Climate Change labour: Alberta, 128, 144; BC Federation of Labour, 76, 78; British Columbia, 76-77, 96, 114-15, 120, 130-35, 136, 141, 143, 151, 196; dominant ideas, 141, 143; Manitoba Federation of Labour, 126; NAFTA Side Deals, 5, 70, 95, 175-91, 197; New Brunswick, 129; Newfoundland and Labrador, 130; Ontario, 72-73, 74, 106, 146; organized labour, 10-11, 73, 77, 126, 136; Prince Edward Island, 130; provincial jurisdiction, 3, 193; Quebec, 69, 110-12, 125; Saskatchewan, 127: WTO, 134 Labour Conventions, 45, 182 Landry, Bernard, 70-71, 163 Lankin, Frances, 74 Laycock, David, 127 Lecours, André, 7 legal council, 74, 81, 114, 195 legalization, trade policy, 81, 92-94, 195 legislature: provincial, 10, 75, 81, 94-97, 127-28, 157-58, 173, 194; state, 96, 158, 162 Lesage, Jean, 69, 149, 151 Levasseur, Karine, 124 Lévesque, René, 69 Leyton-Brown, David, 94 Liberal Party (Federal), 41, 56, 75 Liberal Party (Provincial). See Liberal Party; various provinces

Lindquist, Evert, 124 Lord, Bernard, 62, 63, 86-87, 101, 129, 160 Lougheed, Peter, 46, 49, 68, 146 Louisiana, 30 Lusztig, Michael, 73-74 Lyon, Sterling, 67 McCallum, John, 13 McGuinty, Dalton, 72, 75-76, 148, 152, 162 McKenna, Frank, 62, 63 MacDonald, Mark, 77 MacDonald, Rodney, 64 Macdonald Commission, 48 MacKay, Peter, 40 Macpherson, C.B., 144 MABAC (Montana Alberta Bilateral Advisory Council). See Alberta; Montana Alberta Bilateral Advisory Council Mace, Gordon, 9 Madar, Daniel, 170 MAI, 96, 121, 134-36 Maine: New Brunswick, 28, 160-61, 171; Nova Scotia, 30, 160; Prince Edward Island, 32, 65, 116, 160 Manitoba: Administration and Finance Division, 85; aeronautics industry, 14, 24; Agricore, 103; agriculture, 85, 103, 113, 126, 165; Air Canada, 14; Alberta, 86; Assembly of Manitoba Chiefs, 126; automotive industry, 24; bureaucratic centralization, 86; bureaucratic resources, 85-86, 127; Canada-US relations, 86; CCF, 67; Chamber of Commerce, 113; China, 24; Community and Economic Development Committee, 68; cross-border relations, 164-66, 171; CTrade, 85; Department of Industry, Economic Development, and Mines, 68, 85; Director of Policy, Planning, and Coordination, 85; Doer, Gary, 67-68, 86, 165-66, 172; Drought and Wildland Fires MOU, 165; energy, 24, 165; Filmon, Gary, 67-68; First Nations, 126; Germany, 24; Japan, 22; legalization of trade policy, 93; Lyon, Sterling, 67; Manitoba Farm Bureau, 126; Manitoba Federation of Labour, 126; Manitoba Government Employees Union, 126; Mexico, 24; Ministry of Intergovernmental Affairs and Trade, 68; Minnesota, 165; NAFTA negotiations, 86; NAFTA Side Deals, 184; NDP, 67-68, 86, 126, 165; Pawley, Howard, 67; political executive, 67-68; Progressive Conservative Party, 67, 126; provincial trade profile, 22-25; Quebec, 86; Saskatchewan, 68; Schreyer, Edward, 46, 67; sectoral consultation, 112-13; societal consultation, 126-27; Texas, 165-66; United Farmers of Manitoba,126; University of Manitoba, 166; water, 165, wheat, 24 Maritime Union Study, 159 Martin, Paul, 56-57, 72, 90, 187

Index

Massachusetts, 28, 30, 32, 160, 171 Massé, Marcel, 82 MEDT (Ministry of Economic Development and Trade). See Ontario; Ministry of Economic Development and Trade Mexico: Alberta, 21; automotive industry, 177; British Columbia, 22; federal-provincial consultation, 52; Manitoba, 24; NAFTA Side Deals, 176-77, 184; New Brunswick, 28; Newfoundland and Labrador, 34; North American trade, 14; Nova Scotia, 30; Ontario, 15, 17; Prince Edward Island, 32; Quebec, 17, 19, 71; Salinas, Carlos, 176; Saskatchewan, 26; social movements, 121 Michaud, Nelson, 71, 125, 140 Michelin tires, 46 Michigan, 17, 24, 30 Migratory Birds Convention, 187, 190 MIIR (Ministry of International and Intergovernmental Relations). See Alberta; Ministry of International and Intergovernmental Relations Minnesota, 24, 26, 161-62, 164-66, 171 MLB (Maritime Lumber Bureau). See Softwood Lumber; Maritime Lumber Bureau MLC (Mid-Western Legislative Conference), 164-65, 171 Molot, Maureen Appel, 8 Montana, 26, 164, 166-68, 171 Montpetit, Éric, 103, 110-11, 122 MOU (Memorandum of Understanding), 93, 164, 165, 167, 171, 185 Mount Washington Mine, 184-85 Mulroney, Brian: British Columbia, 93; FTA, 49; NAFTA, 75, 176; parliamentary committees, 95; regional development, 39; Western Accord, 41 multilevel governance. See Governance; multilevel Munton, Don, 190 MRA (Mutual Recognition Agreement), 43, 55, 58, 100 NAAEC: BC Hydro, 164, 175, 186, 189-90; BC Logging, 175, 187, 191; BC Mining, 175, 184-87, 189-91; Canadian Intergovernmental Agreement, 183; Canadian National Advisory Committee, 183; Commission for Environmental Cooperation, 178, 184-91; dispute settlement, 175, 17882, 184-92, 197; environmental law, 175, 179-80; Factual Record, 175, 178, 185-87, 189, 191; Joint Public Advisory Committee, 178; NAFTA negotiations, 176-77, 182-84; Oldman River, 175, 184, 187-89; Ontario Logging, 175, 187, 189-91; preventative regulatory regime, 175, 197; provincial implementation, 95, 175, 17880, 183-84; provisions of, 177-80; Quebec Automobiles, 175, 184, 188; Quebec Hogs, 175, 184, 189; transparency, 175

NAALC. See NAFTA; NAALC NAFTA: agriculture, 103, 173; Alberta, 52, 85, 95; Annex I and II, 104-5, 107, 117-18, 161, 195; British Columbia, 52, 76-79, 83-84, 95-96, 118, 134-35, 152, 194; Chapter 11, 82, 101, 106, 119, 175-76, 195; CNAFTN, 53; dominant ideas, 116-17, 140, 150-51; federal-provincial consultation, 43-44, 51-53, 194; federal-state clause, 44, 194; financial services, 107-8; government procurement, 107-8, 193; Manitoba, 24, 86; Midwestern Legislative Conference, 164; NAALC, 176-77, 180-84, 189, 191, 197; National Administrative Office, 180-81; New Brunswick, 87; North American integration, 8, 12-13, 15, 16973, 197-98; Nova Scotia, 30, 87; Ontario, 10, 15-17, 36, 52, 72-76, 95, 109, 150-52, 194; political executive, 61-62, 194; Prince Edward Island, 88; provincial autonomy, 9, 42, 184, 188-91; provincial jurisdiction, 3, 193-94; provincial ratification, 95, 175, 183-84, 187-88, 190-91; provincial trade patterns, 4, 22, 15-34, 193; Quebec, 19, 52, 70, 83, 111-12; Saskatchewan, 26, 67; sectoral consultation, 108-16; services, 104-5, 195; Side Deal negotiations, 17577, 182-84; Social Service Reservation, 105, 118, 195; societal consultation, 12435, 137, 196; subsidies, 179; United States Congress, 177. See also NAAEC and NAFTA Chapter 11 NAFTA Chapter 11: automobile insurance, 101, 119, 195; environmental standards, 101, 176; Ethyl Corporation, 101, 195; New Brunswick, 101, 119, 195; preventative regulatory regime, 98-101, 119, 195; Ontario, 82, 101; services, 106 National Energy Board, 186 NDP (provincial). See NDP; various provinces NEGC (New England Governors Conference), 158-59 NEP, 41, 145 Netherlands, 44 New Brunswick: agriculture, 115; automobile insurance, 101, 119, 195; bureaucratic coordination, 81, 89, 92; bureaucratic reorganization, 87-88; bureaucratic resources, 87; Business New Brunswick, 87; Conference of New England Governors and Eastern Canadian Premiers, 160; cross-border relations, 159-61, 171-72; Department of Intergovernmental and International Relations, 87; Executive Council Act, 87; Executive Council Office, 63; Federation of Labour, 129; Forest Products Association, 129; Ganong Candy, 115; GATS, 117; Greater Opportunity: New Brunswick’s Prosperity Plan, 63; Hatfield, Richard, 62; Hospitality New Brunswick, 129; International Strategy Working

237

238

Index

Group, 89; investment, 63; Japan, 28; Labour, 129; Liberal Party, 62-63; Lord, Bernard, 62, 63, 86-87, 101, 129, 160; McKenna, Frank, 62, 63; Maine, 28; Mexico, 28; Ministry of Intergovernmental Affairs, 63, 87; NAFTA, 87; NAFTA Chapter 11, 101, 119, 195; political executive, 6264; Progressive Conservative Party, 62-63, 86-87, 101, 129, 160; Prospering in a Global Community: New Brunswick’s International Strategy, 63, 87, 107, 129; provincial trade profile, 26-29; Robichaud, Louis, 62, 63; School Trustees Association, 129; sectoral consultation, 115; services, 106-7, 117; societal consultation, 128-29; softwood lumber, 28, 92; Trade Policy Branch, 8687, 89, 115, 129; trade promotion, 63, 160; United States Congress, 160 New England Council, 158-59 New England Governors and Eastern Canadian Premiers. See Conference of New England Governors and Eastern Canadian Premiers New Mexico, 164, 166 New World Wine Accord. See wine; New World Wine Accord New York, 17, 19, 21, 161-63, 171-72 New Zealand, 100 Newfoundland and Labrador: bureaucratic reorganization, 88; bureaucratic resources, 88; China, 32; Come by Chance refinery, 14, 66; Conference of New England Governors and Eastern Canadian Premiers, 66; Department of Innovation, Trade, and Rural Development, 66, 88; Executive Council, 66; Fisheries Association, 130; Fishermen’s Protective Union, 130; Grimes, Roger, 66; Hydroelectricity, 130; Intergovernmental Affairs Secretariat, 66; investment, 68, 88; Iraq, 14, 34; Japan, 32; Labour, 130; Liberal Party, 66; Mexico, 34; Newfoundland Fish, Food, and Allied Workers’ Union, 130: Peckford, Brian, 66; Planning and Priorities Committee, 66; political executive, 66; Progressive Conservative Party, 66, 88; provincial trade profile, 32-35; Report of the Committee on Government Administration and Productivity, 66; Rural Secretariat, 88; sectoral consultation, 116; services, 66; societal consultation, 130; Strategic Industries Division, 88; Tobin, Brian, 66; Trade and Investment Division, 66, 88; United States Congress, 160; Vitol SA, 14; Wells, Clyde, 66; Williams, Danny, 66, 88 newsprint, 17, 19, 22, 28, 32, 34, 36 Nixon, Richard, 46 Nortel (Northern Telecom), 14 North American Integration. See NAFTA; North American integration North Carolina, 171 North Dakota, 24, 165

Norway, 15, 17, 28, 30 Nossal, Kim Richard, 8, 9, 45, 81-82, 94, 140-41 Nova Scotia: Atlantic Chamber of Commerce, 115; blueberries, 160; bureaucratic coordination, 92; bureaucratic reorganization, 64, 87: bureaucratic resources, 87-88; Cameron, Donald, 64; Committee of Manufacturers and Exporters, 115; crossborder relations, 159-61, 171; Department of Economic Development, 87; France, 30; FTA negotiations, 87; Germany, 30; Hamm, John, 64; Intergovernmental Affairs, 64; investment, 87; Japan, 30; Liberal Party, 64; MacDonald, Rodney, 64; Maine, 30, 160; Maritime Lumber Bureau, 115; Mexico, 30; Ministry of Intergovernmental Affairs, 87; NAFTA negotiations, 30, 87; Office of Economic Development, 87; political executive, 64; Progressive Conservative Party, 64; provincial trade profile, 30-31; Savage, John, 64; sectoral consultation, 115; services, 92; societal consultation, 129; softwood lumber, 92, 115 Ohio, 19, 30, 161 Oldman River. See Alberta; Oldman River Olympic Games, 91, 168-69, 191 Ontario: agriculture, 73-74, 122-24, 196; Attorney General’s Office, 74; automotive sector, 15, 17, 36, 73, 82, 109; Buchanan, Elmer, 73; bureaucratic coordination, 8889, 91-92; bureaucratic resources, 82-83; CCF, 147; Christian Farmers Federation of Ontario, 122-23; Committee on Government Productivity, 72; Common Sense Revolution, 72, 148; cross-border relations, 161-62, 171-72; dairy, 102; Davis, Bill, 72; dominant ideas, 146-48, 151-52, 196; Employment and Business Development Division, 82; energy, 73-74; Environmental Bill of Rights, 122; Environmental Farm Plan, 123; Environmental Protection Act, 122; Eves, Ernie, 72, 148, 152; Farm Registration and Farm Organizations Funding Act, 123; Federation of Agriculture, 122; Final Report of the Cabinet Committee on the North American Free Trade Agreement, 74; First Nations, 123-24, 137, 196; FTA, 49, 72-73; FTAA, 83; GATT, 48, 99-100, 151; GATS, 75, 106, 117; Germany, 15; Harris, Mike, 72, 75, 148, 152; hydroelectricity, 40; investment, 72, 82, 109; Japan, 15, 109; Johnstone, Robert, 73; labour, 72-74, 106, 146; Lankin, Frances, 74; legalization of trade policy, 93; Liberal Party, 70, 72-75, 147-48, 151-52, 162, 196; McGuinty, Dalton, 72, 75-76, 148, 152, 162; Mexico, 15, 17; Ministry of Agriculture and Food, 122; Ministry of Education, 122; Ministry of Economic

Index

Development and Trade, 73-76, 82-83, 89-90, 92, 106, 109, 122-24, 162; Ministry of Intergovernmental Affairs, 73-74; Ministry of Natural Resources, 82, 89-90; Minnesota, 161-62; NAFTA, 10, 15-17, 36, 52, 72-76, 95, 109, 150-52, 194; NAFTA Chapter 11, 82, 101; NAFTA legal challenge, 74-75; NAFTA negotiations and implementation, 73-75, 194; NDP, 73, 122, 147-48, 151-52, 196; New York, 162; Nutrient Management Act, 123; Ontario Board of Trade, 109; Ontario Chamber of Commerce, 109; Ontario Farm Environmental Coalition, 123; Ontario Federation of Agriculture, 122-23; Ontario Logging, 175, 187, 189-91; Ontario Soil and Crop Improvement Association, 122; political executive, 62, 72-76, 80; Peterson, David, 70, 72-73, 152; Priorities, Policy, and Communications Board, 72; Progressive Conservative Party, 72, 123, 147-48, 151, 152, 196; provincial trade profile, 15-17; Quebec, 70; Rae, Bob, 73, 75, 122, 147-48, 151-52; Ramsay, James, 73; Robarts, John, 72; sectoral consultation, 109-10; services, 75, 82, 106, 117, 122-24, 161; social dumping, 74; societal consultation, 12224; softwood lumber, 82-83, 89, 109, 124; Soil and Water Environmental Enhancement Program, 122; Statutory Business Committee, 72; Stephens, Laurie, 75; subsidies, 74, 99, 103; Superbuild, 72; Trade and International Policy Branch, 82; United States Congress, 161-62; Uruguay Round, 73; Walkerton, 123; water, 73-75, 122, 124, 161, 172, 176; wine, 48-49, 99100; WTO, 109, 162. See also Council of Great Lakes Governors OPEC, 14, 34, 40 Ostry, Sylvia, 8 PACE (Peace Arch Crossing Entry Program), 169, Pacific Northwest, 34, 157, 164 Pacific Rim, 36 Pacific Salmon dispute, 135 Palmer, Vaughn, 77-78 Panitch, Leo, 110 paper: paperboard, 17, 22; pulp and paper, 36, 113, 142, 146; uncoated, 17, 22, 36 Paquin, Stéphane, 9, 94 paradiplomacy, 7 Parliament, 4, 41, 45, 94-96, 121, 144 Parliamentary Committees, 4, 94-95 Parti Québécois. See Quebec; Parti Québécois Pataki, George, 163 Paterson, Stephanie, 124 patronage, 61, 64, 67, 129 Pawley, Howard, 67 PCO, 47, 57, 62 Peckford, Brian, 66

Pennsylvania, 19, 162 perforated sovereignty, 7 permissive consensus, 121 Peterson, David, 70, 72-73, 152 Pettigrew, Pierre, 57, 72 petroleum: Alberta, 40; crude, 17, 19, 21-22, 24, 26, 28, 30, 34; liquefied, 19, 21-22, 30, 36. See also Alberta, Canadian Association of Petroleum Producers, and Energy pine nematode, 54, 115,188 Plattsburgh (New York), 163 PNWER, 157, 166-69, 171, 173, 197 POGG clause, 45 Poland, 28 Polanyi, Karl, 6-7, 8 policy communities, 121 Policy Research Institute, 171 political culture, 42, 64, 141-42, 152-53, 193 pork, 46. See also swine post-institutional cabinet, 61, 62. See also premier-centered cabinet potash, 46, 67, 164 potato cyst nematodes, 173 potato wart crisis, 65 potatoes, 32, 53, 65, 160 poultry, 36, 103, 112, 117-18 premier-centered cabinet, 61, 62, 65, 68, 72, 76. See also post-institutional cabinet preventative regulatory regime. See regimes; preventative regulatory Prince, Michael, 170 Prince Edward Island: aeronautics industry, 32, 116; agriculture, 65, 88, 116, 130; automotive industry, 32; blueberries, 65, 116; Bombardier, 116; bureaucratic coordination, 88; bureaucratic resources, 88; CFB Summerside, 116; Conference of New England Governors and Eastern Canadian Premiers, 64; Council of Maritime Premiers, 65; cross-border relations, 159-61; dairy, 116; Department of Development and Technology, 88; First Nations, 130; France, 32; Intergovernmental Affairs, 65, 88; Labour, 130; Maine, 32, 65, 116, 160; Mexico, 32; NAFTA, 88; NAFTA Side Deals, 184; PEI Federation of Agriculture, 130; PEI Federation of Labour, 130; political executive, 64-66; Potato Board, 116; Potato Dealers Association, 130; Potato Producers Association, 130; potato wart crisis, 65; provincial trade profile, 32-33; Public Service Association, 130; Saskatchewan, 88; sectoral consultation, 116; shipbuilding, 116; societal consultation, 129-30; subsidies, 116; Tourism Industry Association, 130; wine, 32 Progressive Conservative Party (Federal), 38, 39, 75, 91 Progressive Conservative Party (Provincial). See Progressive Conservative Party; various provinces

239

240

Index

PSAG (Provinces-States Advisory Group), 173 Putnam, Robert, 6, 7 Quebec: aeronautics industry, 17, 19, 36, 110; agriculture, 89, 110, 112, 117-18, 122, 125, 150, 153; automotive industry, 17, 175, 184, 188; Bourassa, Robert, 69-70, 111-12, 149-50; bureaucratic coordination, 81, 89, 92; bureaucratic resources, 83; Caisse de Dépôt et Placement, 149; Centrale des Syndicates de l’Enseignement du Québec, 125; Centres Locaux de Services Sociaux et Communautaires 111; Charest, Jean, 55, 69, 71, 126, 150, 196; China, 17, 150; Chirac, Jacques, 72; Confédération des Syndicats Nationaux, 112, 125; Conference of New England Governors and Eastern Canadian Premiers, 163; corporatism, 110-12, 118, 120, 122, 12426, 148; Council of Employers, 111; Council of the Federation, 71; cross-border relations, 162-63, 171-72; CTrade, 55-56, 194; dairy, 36, 102, 112, 117-18; dominant ideas, 117, 148-50, 151, 152-53, 196; Duplessis, Maurice, 69, 149, 152; energy, 19, 36, 149, 162-63, 171-72; Fédération des Femmes du Québec, 125; Fédération des Travailleurs du Québec, 112, 125; France, 9, 17, 71-72, 83, 96; FTA, 9, 49, 70, 11112, 118, 150; FTAA, 70, 112, 118, 125; Gagnon-Tremblay, Monique, 55, 71; GATS, 126; GATT, 48, 70, 112; GérinLajoie Doctrine, 55, 71; Germany, 17, 149; Godbout, Adélard, 69; hydroelectricity, 45, 69, 149-50, 161; Hydro-Québec, 69, 149-50; International Relations Committee, 71; investment, 46, 69-70, 149, 15152, 196; Johnson, Daniel, 69; Kyoto Protocol, 71; labour, 69, 110-12, 125; Landry, Bernard, 70-71, 163; legislature, 9, 94-96; Lesage, Jean, 69, 149, 151; Lévesque, René, 69; Liberal Party, 38, 69-70, 71-72, 83, 111, 126, 149-51, 153, 196; Manitoba, 86; Martin, Paul, 72; Mexico, 17, 19, 71; Ministry of Agriculture, Fisheries and Food, 112; Ministry of Economic Development, Innovation and Export Trade, 83; Ministry of Economic and Regional Development, 83; Ministry of International Relations, 83, 89; Ministry of Finance, 83; NAAEC, 175, 184, 188-89; NAFTA, 19, 52, 70, 83, 111-12; NAFTA Side Deals, 182-84; New York, 162-63; Observatoire Québécois sur la Mondialisation, 95, 125-26; Ontario, 70; Parti Libéral du Québec, 69; Parti Québécois, 69-72, 83, 111, 120, 125-26, 149-51, 153, 196; Pelletier, Benoit, 71; Pettigrew, Pierre, 72; provincial executive, 69-72; provincial trade profile, 17-19; Quiet Revolution, 69, 110, 125, 151-53; Quebec Association

Against Air Pollution, 188; Quebec Automobiles, 175, 184, 188; Quebec Deposit and Investment Fund, 69; Quebec Hogs, 175, 184, 189; ratification of international treaties, 9, 94-95; Regroupement pour le Libre-Éxchange, 111; Secretariat for Interprovincial Relations, 89; sectoral consultation, 110-12; services, 36, 46, 105, 126; Sidérurgie Québécoise, 150; societal consultation, 124-26; Société Québécoise d’Exploration Miniére, 149-50; Société Québécoise d’Initiatives Pétroliéres, 14950; Société de Récupération d’Exploration et de Développement Forestiers du Québec, 149-50; softwood lumber, 117; subsidies, 103, 150; trade promotion, 83; Turp, Daniel, 71; Union des Producteurs Agricoles, 112; Vézina Report, 149; Warren, Jake, 70; wine, 100: WTO, 125-26, 162 Rae, Bob, 73, 75, 122, 147-48, 151-52 Ramsay, James, 73 Rasmussen, Ken, 127 ratification, international treaties: federal legislature, 94; NAFTA, 75; NAFTA Side Deals, 175, 183-84, 187-88, 190-91; Quebec, 9, 94-95; role of provinces, 9, 51, 94-95, 183-84, 187-88, 190-91; Vienna Convention, 44 regimes: cross-border, 157, 197; environmental, 176, 186, 190, 197; preventative regulatory, 98, 101, 119, 175, 191-92, 195, 197; theory, 6, 170 Reisman, Simon, 49, 50, 115 Rio Summit. See UN Conference on Environment and Development Robarts, John, 72 Robichaud, Louis, 62, 63 Robinson, Ian, 9, 37 Romanow, Roy, 67 Rosenau, James, 170 Royal Commission on Aboriginal Peoples, 124 Ruff, Norman, 76 Ruggie, John Gerard, 6-7, 151 Russia, 15, 34 SAGITs (Sectoral Advisory Groups on International Trade), 4, 108, 113, 119, 195 Salinas, Carlos, 176 Saskatchewan: agriculture, 67, 86, 103, 113, 127; automotive industry, 26; BSE, 67; bureaucratic coordination, 92; bureaucratic resources, 86, 127; Calvert, Lorne, 67; CCF, 127; China, 14-15, 24, 26; crossborder relations, 164, 171; Crown Investments Corporation, 67; energy, 67; investment, 67; Japan, 26; labour, 127; legislative committees, 95; Manitoba, 68; Mexico, 26; Ministry of Government Relations, 86; Ministry of Government

Index

Relations and Aboriginal Affairs, 86; NAFTA, 26; NAFTA negotiations, 67; natural gas, 67; NDP, 67; New Mexico, 164; political executive, 66-67; potash, 46, 67, 164; Prince Edward Island, 88; Progressive Conservative Party, 67, 145; provincial trade profile, 24-27; Romanow, Roy, 67; Saskatchewan General Insurance, 67; Saskatchewan Trade and Export Partnership, 67; Saskatchewan Wheat Pool, 103; SaskEnergy, 67; SaskPower, 67; SaskTel, 67; sectoral consultation, 113; services, 113; societal consultation, 127; softwood lumber, 92; subsidies, 67; Trade and International Relations Department, 86; Trade Policy Branch, 86, 113; United States Congress, 164; uranium, 67, Wall, Brad, 67; wheat, 14-15, 26, 92, 103, 127 Savage, John, 64 Savoie, Donald, 40, 62, 82 Saudi Arabia, 28 Schmitz, Gerald, 136 Schreyer, Edward, 46, 67 Schultz, Richard, 170 Schwanen, Daniel, 12 SCM (Agreement on Subsidies and Countervailing Measures). See WTO; SCM Sea to Sky Highway, 191 Second World War, 3, 37, 46, 142, 147 seed, 19, 21, 22, 24, 26, 32, 173 services: Alberta, 84-85, 105, 107, 113-14, 117, 128, 146; British Columbia, 79, 105, 114, 117, 134-35, 142-43, 151; CTrade, 57; federal bureaucracy, 90-91; financial services, 107-8; FTA, 51; GATS, 105-7; Mode IV, 106-7, 117; NAFTA, 104-6, 195; NAFTA Chapter 11, 106; New Brunswick, 107, 117; Newfoundland and Labrador, 66; Nova Scotia, 92; Ontario, 75, 82, 106, 117, 122-24; 161; provincial jurisdiction, 3, 46, 93, 193; provincial trade patterns, 15; Quebec, 36, 46, 105, 126; Saskatchewan, 113; societal consultation, 122; transportation, 170 Sierra Club, 124, 184, 186-87 Sierra Legal Defence Fund, 131 Simeon, Richard, 12-13, 17 Sjolander, Claire Turenne, 141 Skogstad, Grace, 9, 12, 55-56, 103, 112, 118 Smallwood, Joan, 96, 134 Smart Border Accord, 160, 165-66, 169 Smiley, Donald, 41, 47, 57 Smith, Heather, 8, 141 Smith, Peter J., 128 softwood lumber: Alberta, 89, 92, 95, 113; British Columbia, 22, 36, 84, 92-93, 115, 130-36, 143, 151-52; CTrade, 53; COFI, 93; federal government, 91; legalization of trade policy, 93; Lumber II, 93; Memorandum of Understanding, 93; Maritime Lumber Bureau, 115; New Brunswick, 28,

92; Nova Scotia, 92, 115; Ontario, 82-83, 89, 109, 124; political executive, 194; Quebec, 117; Saskatchewan, 92; Softwood Lumber Agreement, 134; US disputes, 46, 48; 168; WTO, 104 Soloway, Julie, 101 South Carolina, 30 South Korea, 15, 19, 22, 26 Stairs, Denis, 141 Statistics Canada, 13 Stelmach, Ed, 38, 146 Stephens, Laurie, 75 Stevenson, Garth, 37 Stienstra, Deborah, 141 Stone, Frank, 8 Stritch, Andrew, 110 subsidies: Alberta, 104, 145; alcohol, 99; agriculture, 67, 99, 101-3; Bombardier, 110; Brazil, 110; British Columbia, 99, 114, 134, 142, 179; Europe, 99, 103, 110; FTA, 50, 111; GATT, 47; grain, 103; Mexico, 74; NAFTA, 179; NEP, 41; Ontario, 74, 99, 103; Prince Edward Island, 116; provincial practices, 46; Quebec, 103, 150; regional subsidies, 103-4; Saskatchewan, 67; social dumping, 74; United States, 103; WTO SCM, 98, 103-4, 118, 195 SUFA (Social Union Framework Agreement), 38, 41 Summit of the Americas, 70, 125 supranational governance. See Governance; supranational Supreme Court of Canada: Canada v. Hydro Quebec, 45; Chaoulli v. Quebec, 38, 105; Crown Zellerbach, 45; First Nations, 133; Friends of the Oldman River Society, 45; Labour Conventions, 45; Oldman River, 45, 188; provincial international activity, 43, 193; Social Credit, 145 Sweden, 30 swine, 19, 24. See also pork Switzerland, 44 Taiwan, 15 TAKU Wilderness Association, 184 Tanguay, Brian, 111 Terasen, 14 Texas, 19, 26, 28, 30, 165-66 textiles, 13, 36, 150 Thérien, Jean-Phillipe, 9 TILMA (Trade, Investment and Labour Mobility Agreement), 85 TNO (Trade Negotiations Office), 49-51 Tobin, Brian, 66 Tomlin, Brian, 9, 49, 72, 141 TPC (Trade Policy Committee), 88-89 trade and commerce power, 45 Trade Law Bureau, 91 Trade Policy II Branch, 90-91 Trade Policy Consultations and Liaison Division, 90-91 Trade Policy and Negotiations Branch, 91

241

242

Index

trade promotion: British Columbia, 77, 167; cross-border regional associations, 158, 172, 173; DFAIT, 90; economic development, 5; New Brunswick, 63, 160; political executive, 4, 61, 80, 197; Quebec, 83; Team Canada, 61 traditional cabinet, 61, 69 Trans Mountain Pipeline, 14 Tri-National Agricultural Accord, 173 Tulsequah Mine, 184-85 UFA (United Farmers of Alberta). See Alberta; United Farmers of Alberta UN Conference on Environment and Development, 190 UN Framework Convention on Climate Change, 190. See also Kyoto Protocol UN Oil for Food Program, 14 UNESCO, 3, 56 United Kingdom (UK), 15, 17, 19, 28, 30, 32 United States Congress: Alberta, 3, 167; fast-track legislation, 51; foreign relations, 94; lobbying, 3, 93, 160; NAFTA, 177; New Brunswick, 160; Ontario, 161-62; Saskatchewan, 164; sub-federal trade policy, 172, 174 Uruguay Round: agriculture, 103-4; federalprovincial consultation, 51; financial services, 107; government procurement, 108; Ontario, 73; provincial bureaucracies, 8283, 86-87, 92 USTR, 161 Vander Zalm, Bill, 78, 143 VanDuzer, Anthony J., 105 VanNijnatten, Debora, 190 Venugopal, Raj, 63, 89 Vermont, 19 Vienna Convention on the Law of Treaties, 44, 194 Vitol SA, 14 Wall, Brad, 67 Warren, Jake, 48, 70 Washington State, 14, 21, 22 WCER (Western Centre for Economic Research). See Alberta; Western Centre for Economic Research WD (Department of Western Diversification), 39-40 Weekes, John, 176 Wells, Clyde, 66

Wellstead, Adam, 124 Western Accord, 41 WGA (Western Governors Association), 165-68, 171, 173 wheat: Alberta, 14-15, 21, 92, 152; Canadian Wheat Board, 15, 102; Manitoba, 24; Saskatchewan, 14-15, 26, 92, 103, 127; subsidies, 103 Whitaker, Reg, 148 Williams, Danny, 66, 68 Wilson, Gordon, 143 Wilson, Jeremy, 191 Wilson, Michael, 73, 177 wine: British Columbia, 99-100; FTA, 51; GATT dispute, 48-49, 99-100; labelling, 98, 100, 118, 195; New World Wine Accord, 55, 100, 117, 118, 195; Ontario, 4849, 99-100; Prince Edward Island, 32; provincial liquor boards, 99; Quebec, 100; Vintners Quality Alliance, 101. See also alcohol Winfield, Mark, 190 Winham, Gilbert, 8, 198 Wisconsin, 26, 161 Wiseman, Nelson, 144, 147-48 Wolfe, Robert, 8, 11, 136-37 World Commission on Environment and Development. See Brundtland Commission World Wine Trade Group, 100. See also wine WPC (Western Premiers Conference), 16566 WTO: Alberta, 114; Agreement on Agriculture, 102-3; British Columbia, 114, 118, 134-35; CTrade, 53; dispute settlement, 92, 100, 179; dominant ideas, 117; federalbureaucracy, 90; federal-provincial consultation, 53-55, 194; federal-state clause, 44, 194; financial services, 107; GATS, 75, 79, 98, 105-7, 109, 114, 117, 126, 135, 137, 195; GPA, 108, 162; labour, 134; negotiations, 82-83, 96; Ontario, 109, 162; provincial jurisdiction, 3, 42, 98, 103-4, 193-94; provincial trade patterns, 4, 193; Quebec, 125-26, 162; SCM, 98, 103-4, 118, 195; Seattle, 96, 121, 134, 136; societal consultation, 122-26, 129-30, 134-37, 196; softwood lumber, 104. See also Doha Round, GATS, and Uruguay Round Wyoming, 26 Zirnhelt, David, 76