Does Canada need trade adjustment assistance?

Abstract

Trade adjustment assistance (TAA) is government aid to those affected by trade agreements. We review the history of TAA in Canada and ask whether Canada needs to reintroduce it in response to the recent intensification of trade negotiations. In light of the compensation offered by the federal government in connection with the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), we examine how TAA fits in with the evolution of Canadian federalism in the trade policy area. Based in part on interviews with provincial trade negotiators, we conclude, first, that the compensation is an outcome of Canadian federalism. Second, we argue that while there is no reason to reintroduce a federal TAA program for workers, compensation for provinces is necessary to facilitate their cooperation with the implementation of trade treaty provisions. Third, we suggest that a more transparent rationale for such compensation would be superior to the ad hoc compensation observed in CETA.