Oh, I'm sorry; I apologize.
The third principle is one of progressive enforcement. Enforcement of the provisions of any deal should be progressive, starting with non-financial penalties and moving up to perhaps financial penalties. Municipalities are not necessarily going to have in-house experts on international trade agreements. It is important that municipalities not be penalized for inadvertent non-compliance.
The fourth principle, which we shared with Minister Day, was that there needs to be provision for Canadian content for strategic industries or sensitive projects. This is an area Mr. Shrybman spoke to, and we certainly agree with him very significantly here. A trade deal must recognize strategic and public interest considerations before barring all preferential treatment based on country of origin. This could include industries of strategic significance to a particular region, such as transit—for instance, the Government of Ontario sought to exempt transit from this deal, which they did—or projects where considerations of quality, or public benefit, environmental protection, or business ethics mean that a local government may want to implement minimum Canadian content levels. This needs to be allowed within reason.
The fifth principle concerned dispute resolution. The dispute resolution process in NAFTA may require a more careful review of the municipal role in that process, so that municipalities can defend their procurement policies and bylaws as an order of government, rather than just as another stakeholder.
Finally, the sixth principle is that consultation and communication really need to occur during negotiations to ensure that the resulting agreement responds to municipal concerns. This is another area where we certainly agree with Mr. Shrybman's comment around the need for greater transparency. We understand the need for some confidentiality around negotiations; nevertheless, provinces were fully engaged, and obviously we respect their jurisdiction in this area. This speaks more to ensuring that municipal practitioners who are experts in municipal procurement are adequately consulted, mainly just to derive benefit from their expertise.
Drawing on these six principles and using the publicly available information about the agreement, we have advised our members that so far, this deal looks like good news for municipalities. Having said that, as I said, it's “so far”: there are many details to work out, and we and many of our members are still completing our analysis and looking for new details to emerge. In particular, the deal's procurement thresholds in our view are quite high, as several witnesses have mentioned, at $8.8 million, and they apply only to construction-related projects. Many of our members are commenting that they are already tendering projects of this size and higher and that most tendering is open to companies of any country of origin.
In addition, and importantly when we are speaking about this, provinces and territories have negotiated exemptions for certain sizes and types of municipalities—again, as others have commented, it depends on the province—and also for certain project classes and industries. Again, these are both key principles of ours.
As I said, there are still unanswered questions for our members regarding the administrative enforcement provisions and dispute resolution processes. These details are extremely important to us. Details certainly matter in this case. However, before committee of our national board of directors last month, Minister Van Loan committed to working with FCM to ensure that there is greater municipal input and engagement as the agreement process moves forward. This is a commitment we welcome, particularly because we don't feel that this type of consultation occurred in the lead-up to this agreement in principle. We certainly welcome this move as we go forward.
Those are my remarks. My colleague and I will be pleased to answer any questions you have.