Canada: The Canadian Free Trade Agreement – "Old Wine In New Bottles" For Labour Mobility

Last Updated: June 7 2017
Article by James T. Casey QC and Jason Kully

Judging from the headlines touting the new Canadian Free Trade Agreement ("CFTA") as "the biggest step forward in removing barriers to internal trade...in the history of Canada," "the most ambitious free trade agreement this country has ever had," and "mak[ing] it easier for workers to take jobs in other provinces," professional regulatory organizations may well be questioning the effect the latest internal trade agreement will have on labour mobility and the regulation of the professions.

Background on the CFTA

The CFTA, the text and details of which were released on April 7, 2017, is a trade agreement between the governments of Canada, the ten provinces, and the three territories. The objective of the CFTA is "to reduce and eliminate, to the extent possible, barriers to the free movement of persons, goods, services, and investments within Canada and to establish an open, efficient, and stable domestic market."

The CFTA replaces the existing Agreement on Internal Trade ("AIT") which has been in place since 1995. Although negotiations on the CFTA are complete and the content of the agreement is finalized, the agreement will not take effect until July 1, 2017.

In negotiating the terms of the agreement, the parties were guided by the following principles:

  1. The need to eliminate existing barriers and avoid new barriers to trade, investment, and labour mobility within Canada and to facilitate the free movement of persons, goods, services and investments within Canada;
  2. The need to ensure non-discriminatory treatment of persons, goods, services and investments, irrespective of where they originate in Canada; and
  3. The need to reconcile occupational standards and regulatory measures to provide for the free movement of persons and the removal of barriers to trade and investment within Canada.

The negotiators of the CFTA used the AIT, as well as the New West Partnership Trade Agreement ("NWPTA"), a trade accord that harmonizes regulations and enables labour mobility between Manitoba, British Columbia, Alberta and Saskatchewan, as templates for the new agreement.

Like its predecessor the AIT, the CFTA continues to allow for provinces and territories to negotiate other bilateral or multilateral agreements so long as the secondary arrangement liberalizes trade, investment, or labour mobility beyond the level achieved by CFTA. Accordingly, the NWPTA will continue to apply to the relationship between Manitoba, British Columbia, Alberta and Saskatchewan. With respect to labour mobility, in the event of any inconsistency between the CTFA and the NWPTA, the agreement that is more conducive to labour mobility in that particular case will prevail.

What's New?

While the AIT utilized a "positive-list" approach and focused on removing trade barriers within the specifically enumerated eleven sectors1, the CFTA uses a "negative-list" approach meaning that it automatically applies across the economy and to every investment, trade in goods and services, and commercial activity in the provinces and territories except those specifically exempted. This means that sectors of the economy like financial services will now be included.

While this sounds admirable, the CFTA continues to not apply to a number of sectors and activities as there are 135 pages of specific exemptions. These exemptions include parts of energy sectors, natural resource development, and trade in alcoholic beverages. The exemptions also include some activities involving the provision of services by professionals. For example, the provision of legal services in Manitoba by an inter-jurisdictional law firm requires that the firm maintain at least one office in Manitoba and that at least one member of the firm principally practices in Manitoba.

The CFTA also introduces a regulatory reconciliation process aimed at reducing duplicate, overlapping or inconsistent regulations. Parties to the agreement are required to enter into negotiations to reconcile existing regulatory measures, identified by another party, which act as a barrier to trade, investment or labour mobility. This process allows regulatory requirements to be reconciled without resort to the formal dispute resolution process and is also intended to assist governments in developing common regulatory approaches for emerging sectors. However, any province or territory unhappy about a rule emerging from this process can opt out. If this occurs, the government is permitted to maintain an inconsistent regulation and the regulation is simply listed as an exception to the agreement.

In addition, the CFTA introduces new rules with respect to the procurement of services by governments. All governments have committed to providing non-discriminatory treatment to companies operating across Canada and to not providing any favourable treatment to local companies or providers. Under the CFTA, governments must act solely in accordance with commercial considerations in the purchase or sale of a good or service or the treatment of investors. Governments have also agreed to implement a single electronic portal, which will make it easier for all Canadian businesses to find procurement opportunities.

A change to the dispute resolution procedure is the empowering of compliance panels to summarily dismiss proceedings if they determine them to be frivolous, vexatious, or an abuse of process. The CFTA also increases the maximum monetary penalties for governments that act in a manner that is inconsistent with the CFTA. While penalties will vary based on population, the maximum penalty has increased to $10 million as opposed to the $5 million maximum under the AIT.

The CFTA's Impact on Labour Mobility and Professional Regulatory Organizations

While the CFTA has been touted as the "most ambitious free trade agreement" and "the biggest step forward," and while it has been stated that it will make it easier for workers to take jobs in other provinces, the CFTA's impact on labour mobility and on professional regulatory organizations is actually quite limited.

Although the CFTA will improve the ability of professionals to compete for government contracts through the new procurement process, there have not been significant changes to labour mobility or the way that professional regulatory organizations are required to treat professionals.

The CFTA incorporates all of the elements of the AIT with respect to labour mobility and the agreement's chapter on labour mobility is almost identical to the AIT, with the exception of minor language changes which do not impact the substance of the provisions. The central labour mobility provisions from the AIT have been carried over to the CFTA as follows:

  • The purpose of the provisions is to eliminate or reduce measures that restrict or impair labour mobility and to enable any worker certified for an occupation by a regulatory authority of one province/territory to be recognized as qualified for that occupation by all other provinces/territories (Article 700 of the CFTA);
  • The governments of each province/territory will ensure compliance with the provisions by non-governmental bodies such as professional regulatory organizations (Article 702 of the CFTA);
  • Residency within a jurisdiction cannot be a condition of eligibility for employment or the certification of an occupation (Article 704 of the CFTA);
  • Any worker certified for an occupation by a regulatory authority in one jurisdiction shall be certified for that occupation in another territory without any requirement for additional training, experience, examinations, or assessment (Article 705(1) of the CFTA);
  • A regulatory authority may, as a condition of certification, impose requirements on a worker certified in another jurisdiction, such as paying an application fee, undergoing a criminal background check, providing evidence of good character, etc., so long as the requirements are similar to and no more onerous than those imposed on workers from the home jurisdiction as part of the normal registration process (Article 705(3) of the CFTA);
  • A regulatory authority may refuse to certify a worker certified in another territory if such action is necessary to protect the public interest due to complaints or disciplinary/criminal proceedings, so long as the treatment is similar to and no more onerous than what would be imposed on workers from the regulatory authority's home jurisdiction (Article 705(4)(a) of the CFTA);
  • A regulatory authority may also impose additional training or assessments as a condition of certification if a person has not practiced the occupation within a specified period of time, so long as the treatment is similar to and no more onerous than what would be imposed on workers from the regulatory authority's home jurisdiction (Article 705(4)(b) of the CFTA);
  • A regulatory authority may assess the equivalency of a practice limitation, restriction, or condition imposed on a worker in their certifying jurisdiction and apply a similar limitation or condition to the worker's certification, or refuse the certification if there is no provision for applying an equivalent limitation or condition (Article 704(d) of the CFTA); and
  • A measure may be inconsistent with the labour mobility provisions of the CFTA if the purpose of the measure is to achieve a legitimate objective for labour mobility (Article 707) of the CFTA).

In addition, while the dispute resolution process has undergone some administrative and procedural changes, it relies heavily on the AIT and the NWPTA. Disputes can still only be heard by a compliance panel after mediation and consultation have been exhausted and penalties may still be imposed only if a party fails to comply with the CFTA after being put on notice by a compliance panel. The CFTA also maintains both the government-to-government and the person/business-to-government dispute mechanisms which existed under the AIT. As with the AIT and the NWPTA, the respondent to any complaint remains the government, not a regulatory organization. In addition, any monetary penalties are deposited into a fund intended to advance internal trade, and not paid as compensation to the complainant.

Conclusion

While much has been made about the CFTA and the impact it will have, the CFTA will not result in significant changes for professional regulatory organizations as the labour mobility provisions are essentially those which existed under the AIT. While regulatory organizations should acquaint themselves with the requirements of the CFTA, these requirements will feel familiar. For professional regulators, the CFTA is "old wine in new bottles."

Footnotes

1 Procurement, investment, labour mobility, consumer-related measures and standards, agricultural and food products, alcoholic beverages, natural resources processing, energy (which was never implemented because negotiations were never completed), communications, transportation and environmental protection.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
17 Oct 2019, Webinar, Calgary, Canada

Business succession is a principal and critical component of personal succession for owners of closely held businesses. This is a long-term, complex process that must be managed with a structured approach. 

22 Oct 2019, Seminar, Edmonton, Canada

The insurance issues surrounding liability for personal injury are always changing. Join lawyers from Field Law's Insurance Practice Group for a free seminar on topics including:

19 Nov 2019, Seminar, Edmonton, Canada

One year after Canada legalized cannabis for recreational use, this panel will discuss the implications in the workplace, society, and to our country overall. The panel will explore all angles of post-legalization and feature experts from workplace safety and standards, a producer, and a licensed retail store.

 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions