It was a curious comment, unscripted but probably not unplanned. Premier Kathy Dunderdale, in the middle of a speech to the St. John’s Board of Trade last week, suddenly decided to throw out a snippet about last year’s federal loan guarantee for Muskrat Falls.
The deal, she said, almost came off the rails over a late request from the Prime Minister’s Office that the province agree to changes in fish processing laws. In other words that, for the sake of a new European trade deal, the Comprehensive and Economic Trade Agreement (CETA), the province should stop requiring that fish landed in this province be processed here.
The timing was peculiar. The speech wasn’t going in that direction when Premier Dunderdale suddenly announced that she had hung up on the prime minister’s then chef of staff, Nigel Wright.
So why did it happen? It could have been two things. In the face of upcoming (and likely unfavourable) public opinion polls, Dunderdale might have wanted to put herself out there as the “fighting Newfoundlander,” a strategy that has worked for premiers here for years.
More likely, though, is to get out ahead of changes that are likely coming anyway.
The core of the dispute between the federal and provincial government is over a handful of words in the province’s Fish Inspection Act: “4. (1) The Lieutenant-Governor in Council may make regulations … (p) prescribing minimum processing requirements …”
Unlike the rules in many industries, the act allows the cabinet to restrict the shipment of unprocessed fish from the province.
The rules help keep a certain number of fish plant workers in jobs, to be sure (just how many is another question; after all, even without artificial trade barriers, there are advantages to being geographically close to a resource and having a workforce that’s subsidized by employment insurance in the off season).
Those same rules also help keep raw material prices artificially low. Since fishermen can only sell to in-province buyers with processing capability, buyers get an unreasonable advantage. So there are those who gain advantages — and, as many are quick to point out, those advantages include people in rural parts of the province. Having European tariffs dropped on this province’s fisheries products might make those advantages greater.
The problem is that the processing regulations represent a kind of restrictive, non-tariff rule that is already falling out of favour as trade barriers fall, and may already be illegal. As a National Post columnist pointed out on Friday, the rules violate World Trade Organization standards, and would probably fall the first time they’re tested anyway.
That turns Dunderdale’s strident and sudden attempt to get in front of the issue as something more like getting the first word in to say the changes are “not on my watch.”
The changes are likely inevitable, but they’re being cast as something that we should blame on the feds instead. Because that’s really one of the few arguments that makes Dunderdale’s unexpected announcement of the federal actions make any sense at all.