Protectionism comes and goes. Think of it as a pendulum
swinging back and forth. In good times, it disappears.
When things tighten up or when Donald Trump gets
elected, it surfaces again.
We’ve reached a time when it’s in our face again as Alberta and
Saskatchewan play a game of tit-for-tat with retaliation for Alberta beer
subsidies that hurt Saskatchewan brewers, resulting in Alberta license
plates being banned from Saskatchewan government work sites.
All of this may seem a bit childish, but it involves plenty of history
so this outburst is simply the cork popping after pressure has been
building for years.
Despite the stance adopted by the Alberta minister, his govern-ment’s
hands are not quite as clean as he’d have you believe. In fact,
Alberta is one of the most, if not the most, protectionist provinces
in the country. You don’t have to travel very far in Saskatchewan to
hear examples of locally owned firms facing stiff competition from
Alberta firms.
In spring break-up at Fort Mac, for example, Albertan players in
the field would descend on Saskatchewan to fill in their downtime.
Instead of the usual $2,000 an hour they would charge oil sands
companies, they offered services at $200 an hour, just to keep busy.
For the Saskatchewan company that typically charged around $600
an hour, they had no chance.
So, you’d logically ask, why didn’t they just go to Fort Mac and
charge $600 an hour and clear up? Simple: the “Great Wall.”
To play in Alberta, the Saskatchewan firm would have to become
“accredited.” The same rules do not apply in Saskatchewan. The
Saskatchewan company would have to use an Alberta-certified in-dividual
to sign off on everything – basically, pay this person to do
nothing but have an Alberta residence. Even when the firm looked
to challenge the certification, the material used in the Alberta edu-cation
institution responsible for the course was so out-of-date, the
BY PAUL MARTIN, MARTIN CHARLTON COMMUNICATIONS
THE BOTTOM LINE
Saskatchewan company didn’t have any crew members old enough
to remember those processes. So they chose not to bother, dropping
Alberta as a market option for jobs tendered by Alberta-based orga-nizations
(the same barriers do not apply to federal work).
Another local firm found it had to establish a second company –
an Alberta-based one – to circumvent the Alberta rules. They had to
appoint their Alberta staff as directors of the company even though
they had no real authority, file an extra annual return and corporate
tax return simply to meet Alberta’s “locally owned” rule to be con-sidered
for certain types of work.
That there would be different rules in various jurisdictions should
not come as a surprise, but the whole idea behind the Agreement
on Internal Trade and the New West Partnership was to make ac-cess
to all markets relatively easy by removing protectionist rules.
After all, more competition is better for buyers and makes sellers
up their games.
When Alberta chose to ignore or appeal a ruling on beer, it prob-ably
should have expected some sort of retaliation and Brad Wall,
freed of worries about his national stature with his retirement an-nouncement,
had the flexibility to seize the opportunity. So he did
with the license plate deal.
But at the heart of this story is not the tit-for-tat but rather that
Saskatchewan has always given Albertans more access to this mar-ket
than the other way around, and that remains unchanged, re-gardless
of license plates and the lack of a sales tax. Perhaps
Saskatchewan should just borrow Alberta’s regulatory handbook
and substitute the word Saskatchewan wherever it says Alberta, and
we’d not only have a level playing field once and for all, but plenty of
folks here would have all kinds of work creating new corporations,
filing new annual and tax returns, creating courses for Albertans to
take and so on. Creating the Great Wall of Saskatchewan could trig-ger
a boom.
Saskatchewan’s
Own Wall
LEUNGCHOPAN / SHUTTERSTOCK.COM
56 Think BIG | Quarter 1 2018 | saskheavy.ca