Mr. Peter Julian (Burnaby—New Westminster, NDP)
moved that the second report of the Standing Committee on International Trade, presented on Wednesday, April 1, 2009 be concurred in.
He said: Mr. Speaker, I am pleased on behalf of the New Democratic Party to move concurrence in the second report of the Standing Committee on International Trade today in the House.
As the House knows, we have been discussing trade policy for the last few months, and we have seen some of the more egregious aspects of the current government's trade policy.
I am happy to say that despite some disagreements we have had in the past on certain aspects of trade policy, the Standing Committee on International Trade was able to actually have discussion on the report last March. This report deals with the provisions of chapter 11 and investor-state provisions that exist in the North American Free Trade Agreement.
The second report states very simply this:
|| Pursuant to Standing Order 108(2) and the motion adopted by the Committee on Tuesday, March 31, 2009, your Committee recommends: that the Government vigorously defend Quebec's Pesticides Management Code in the case opposing Dow Agroscience and the Government of Canada in order to safeguard Quebec's right to enact legislation and make regulations in the public interest.
That report was a report that essentially demanded of our national government that it vigorously defend the right of Quebec to make regulations in the public interest, in this case the banning of a chemical that very clearly has negative environmental impacts and negative health impacts and that is 2,4-D.
However, there are much broader implications for this particular report and this particular provision of NAFTA. The broader implications are the implications that it has, through the chapter 11 provisions, on any government. Whether we are talking about the Quebec government or the Government of British Columbia, Newfoundland and Labrador, Ontario, Alberta, Saskatchewan, Manitoba, any province, any territory or any municipality in Canada, it is essentially impacted by the provisions of chapter 11.
This is an important discussion we need to have and an important report that we hope Parliament will endorse. It comes out of the Standing Committee on International Trade in light of the concerns about Dow Chemical Company's attack on Quebec's right to make this regulation in the public interest. It could be Quebec today and it could well be British Columbia tomorrow.
As democratic representatives in the House of Commons, we have to very clearly take the stand that when powerful international companies attack democratic entities and attack the rights of those entities to make safety regulations, health regulations and environmental regulations in the public interest, Parliament has to clearly take a stand.
I am pleased to say at the outset that this report stemmed from hearings the NDP was able to obtain at the Standing Committee on International Trade on 2,4-D pesticides and on the attack by Dow AgroSciences against Quebec's right to make this legislation in the public interest.
We pushed for that at the beginning of March. I am pleased to say that we had the support of the majority of members of the Standing Committee on International Trade. We had those hearings, and subsequent to those hearings we brought forward the report with the support of the Bloc Québécois and the Liberal Party as well. We brought forward the report, it was adopted and it has now been brought forward to Parliament for discussion.
The information sessions and witness testimony that the NDP was able to bring before the Standing Committee on International Trade were what was most important. I will talk about some of the statements we heard in committee about this attack by Dow AgroSciences on the Government of Quebec.
Once again, Quebec is not the only one affected by the provisions of chapter 11 of NAFTA, which the NDP has long opposed. All the provinces, all the territories, all the municipalities in Canada could be affected by the provisions of chapter 11.
A number of witnesses appeared before the committee. Their testimonies were very helpful in the report we are discussing today. We first heard from Steven Shrybman, the legal counsel for the Council of Canadians. This is the largest citizens' organization in Canada, with more than 100,000 members nation wide. Mr. Shrybman said:
|| Under chapter 11 of NAFTA, private parties-—investors and companies—from the other NAFTA jurisdictions, namely the United States and Mexico, can make a claim for damages arising from an alleged breach. We're going to take the case of a claim against Canada--a Canadian government, be it a federal government, provincial government, or municipal government--because of something the government has done that the private investor or the U.S. company, for example, argues is in breach of the broadly worded and ill-defined constraints of chapter 11.
That is the problem. These private investors, such as Dow AgroSciences, have the right to attack regulations made in the public interest, and that is why the Committee on International Trade decided to strongly urge the government to protect the interests of Quebec and all of the other provinces from the use of chapter 11 to attack these regulations.
Hugo Séguin, public affairs coordinator with Équiterre, a well-known Quebec organization, had this to say about the dispute with Dow AgroSciences, or rather, Dow AgroSciences' attack on Quebec's right to pass legislation in the best interest of Quebeckers in areas under its jurisdiction:
|| The Quebec Pesticide Management Code has been in effect since 2003. The ban on 20 active ingredients in pesticides has been in effect since 2006. For example, the Pesticide Management Code applies to turfed areas, including areas used frequently by children. Public health studies seem to show that children are exposed to even greater health risks when they play in parks, schoolyards or day care yards.
Mr. Séguin went on to say that Quebec has justified its actions on the grounds of the risk to public health. He added that Quebec is not the only jurisdiction in the world to ban 2,4-D or other pesticides. This is also the case in Norway, Denmark, Sweden and Ontario, where some pesticides, including 2,4-D, have been banned.
That is the problem. Quebec took responsibility. The Government of Quebec decided that it had to protect children by prohibiting the use of 2,4-D. Quebec is not the only jurisdiction in the world to prohibit 2,4-D. Several other jurisdictions are doing so, including Ontario. Even though Ontario is behind Quebec on this issue, it is heading in the same direction as Quebec. So Dow AgroSciences could choose to attack the Government of Ontario for its decisions, just as it has attacked the Government of Quebec's decisions. However, countries like Norway, Denmark and Sweden have also decided to prohibit the use of 2,4-D.
These countries are not governed by the chapter 11 provisions. So companies do not have the same grounds for attacking decisions made in the public interest by democratically elected governments.
That is the problem, and that is why there is a motion to concur in this report today. This affects municipalities, Quebec, Ontario and other provinces that want to bring in legislation to prohibit products like 2,4-D.
That is the fundamental problem. Essentially, there are chapter 11 provisions that can be used by any company to attack any democratic decision that is taken by a democratic government in the interests of the people it represents.
It is important to note that when the discussions were held around NAFTA, the provisions of chapter 11 that provide this super chèque en blanc, as is said in French, this blank cheque to the corporate sector to challenge government initiatives were something which, immediately upon signing NAFTA, the United States immediately retreated away from.
There was a very clear unease in the United States and other jurisdictions about the provisions of investor state and what it could mean in the long term. It is interesting to note, and this comes down to a fundamental question, that the chapter 11 provisions have not been reproduced by the United States in any other trade agreement it has signed since NAFTA. The provisions of chapter 11, the blank cheque given to the corporate sector to challenge the health and safety regulations put in place in the public interest, are something the United States, since that time, has moderated in all its trade agreements. There is no longer a blank cheque in any other American trade agreement.
The United States took that step back from the brink. It said that these provisions are far too widespread, that they give too much power and control to the corporate sector. In place of them, the United States, in any provisions around investor state, has made it very clear that environmental regulations, health and safety regulations, decisions that are made by democratic bodies in the public interest cannot be challenged under chapter 11 or investor state provisions. The United States retreated immediately from that.
Canada is the only country in the world where every single comprehensive trade agreement that we have signed since NAFTA has included these blank cheque investor state provisions. I will repeat that because this is of fundamental importance. Whereas other countries have retreated from the brink, we have gone right over. Agreements that have been brought to this House have all included the chapter 11 provisions that give a blank cheque to corporate CEOs to challenge decisions made in the public interest.
Only one party in the House of Commons has defended the public's right to make regulations in the public interest through its democratically elected representatives. Only one party consistently has said that these investor state provisions, rejected by the United States since NAFTA and by every other country on the planet, are a negative, unsustainable and irresponsible provision of trade agreements that Canada has signed.
That is why New Democrats have stood in the House consistently over the past two decades, since the signing of NAFTA and the putting into place of the Canada-U.S. trade agreement, and opposed those chapter 11 provisions. We have done that for one very simple reason, that when we give investor state provisions, when we allow this blank cheque to the corporate sector, it is understandable there is going to be a very clear attack on some democratically elected government's right to put in place that legislation.
What is more important is the effect it has on legislation even before it is brought forward. We have heard in discussions at the municipal and provincial levels on the possible implications of chapter 11, that sometimes governments step back from taking action in the public domain because they are concerned about whether or not investor state provisions could be applied by companies that feel that their right to make a profit may be infringed upon.
That brings me back to the issue of 2,4-D, an issue that, I will repeat, was supported, that we must vigorously defend Quebec's right to put forward this legislation in the public interest to protect children. As I have mentioned, witnesses were very clear on this. As a trade committee, and I am hoping to get the approval of Parliament, we are saying that the Canadian government has to vigorously defend the right of provincial legislatures, the right of the national assembly, the right of municipalities, the right of democratically elected bodies to put in place legislation in the public interest.
It is important to mention some of the chapter 11 cases that have been brought forward, because these indicate the impact of chapter 11 and why the NDP believes, like Barack Obama, that NAFTA needs to be renegotiated. The chapter 11 provisions need to be strongly curtailed because they simply were not appropriate at the time, are not appropriate today and are not a mechanism that allows for the kind of public policy Canadians want to see.
As soon as NAFTA was put into place, Ethyl Corporation, a U.S. chemical company, challenged a Canadian ban on the gasoline additive MMT. MMT is a neurotoxin. No one objects to the very clear health impacts of that ingredient, but the fact that the government moved to ban MMT led to the use of chapter 11 provisions. Canadian taxpayers across the country from coast to coast to coast had to cough up $13 million for an out-of-court settlement. This was for a product that is a known neurotoxin. It was banned by the Canadian government in a responsible way to ensure that the product could not have the negative health impacts, but because of the chapter 11 provisions, Canadian taxpayers had to compensate the company for producing a product that has known health impacts.
What is wrong with that picture? Embedded in NAFTA are provisions that force taxpayers to compensate bad companies for producing a product that is a health risk. What is wrong with this? It is rewarding bad behaviour. It is like saying to somebody who has murdered somebody, “We are going to give you compensation because we are going to have to put you in jail”. This is absolutely absurd.
That is why the NDP has been saying consistently over the last number of years when these investor state provisions come forward that NAFTA has to be renegotiated and that we have to fundamentally rejig our approach on trade policy, including removing the chapter 11 provisions from the trade policy template that is put forward for all of our comprehensive trade agreements.
That is a fundamental problem. It is a problem in Quebec when it tries to legislate and ban a toxic product, 2,4-D, and it is challenged by the company. It is a problem for other provincial governments that may choose to do the same thing. It is a challenge for our federal government.
The NAFTA chapter 11 provisions have a negative impact on public policy. The NDP believes that NAFTA must be renegotiated. We will agree with Barack Obama on this. We believe that investor state needs to be removed from the provisions of NAFTA.
Hon. Scott Brison (Kings—Hants, Lib.):
Mr. Speaker, I am pleased to speak today to this motion. We did have a debate at the trade committee on the issue of chapter 11. We heard from some witnesses on the issue of chapter 11 and some of the potential chapter 11 cases involving Newfoundland and Labrador and Quebec.
A provincial government has taken a position on a regulatory matter in terms of pesticides within its jurisdiction. We stand, and I believe and I certainly hope the government stands, in support of that provincial government on this issue.
We had a fairly short session at committee on chapter 11 but we need a longer study. I remember that day I spoke at committee urging it to at some point have a longer study of chapter 11.
The principle behind chapter 11 is that of national treatment, which is a reasonable principle. In fact, it is core to trade agreements. It is essential that we have some level of protection of national treatment to ensure that Canadian companies, which are investing abroad in other countries with which we have trade agreements, are not discriminated against by those governments. That could be in areas of procurement in some cases or it could be in areas of regulations in other cases.
We know now and we see what is going on in the U.S. around buy American and some of these other provisions what a pernicious impact protectionist measures can have on Canada and on Canadian companies. We clearly need provisions to protect Canadian companies, workers, investors and pensioners whose retirement savings and income depend on their investments being protected for Canadian companies doing business abroad.
I think most Canadians and most members of the House would agree that national treatment is a reasonable principle. We need to ensure that Canadian investors, companies and workers' interests are protected in the countries with which we enter trade agreements.
At the same time, for us to protect our workers, our companies and our investors in those countries, we need to ensure we provide equal levels of protection to their companies doing business in Canada. So there is a compromise there and a trade-off but it is a principle that we believe in.
The question about chapter 11 and the investor state provisions specifically within chapter 11 are important questions. Whether or not chapter 11 in its design is working in Canada's interests is also an important one. What are the other approaches to national treatment that other countries in their trade agreements are pursuing? Those are important questions that we need to study.
I have talked to some of the people involved in the negotiation of NAFTA, people who believe very strongly in NAFTA and strongly believe in the principles of free trade but who also believe that there are issues around chapter 11.
How do we deal with those in NAFTA? How do we reopen a discussion on chapter 11 and should we reopen NAFTA at a time of deepening and strengthening American protectionism? Those are important questions for us to ask in the House. Even with whatever flaws that may exist in chapter 11, I think most Canadians would agree that the NAFTA and the FTA have, by and large, benefited Canadians, have created jobs for Canadians and have increased competitiveness for Canadians.
The question is how we deal with investor state provisions, with the principle of national treatment and with chapter 11 of NAFTA.
It is an important study, not just in terms of our current agreements, our North American Free Trade Agreement, but in terms of future trade agreements and how we deal with the principle of national treatment. It is distinct from whether or not we open up chapter 11, potentially opening up NAFTA at a time when we see heightened American protectionism. It is quite possible that there are areas for future trade agreements where we may consider a different approach to national treatment and that there are ways to better protect Canadian interests and strengthen our capacity to defend the right of Canadian sub-national or national governments to put in place policies, environmental or otherwise, to protect our citizens and at the same time enter into and expand our trade relationships. I think those are important discussions.
We have not had, in my opinion, as much success as we should have had on some of these challenges. Is that because of flaws within chapter 11, or is that because the federal government has not provided enough resources or support to the challengers? Are we not providing enough support for chapter 11 challenges from within Canada? I have heard the case made by trade experts that the Department of Justice is not provided with enough resources, that it does not provide enough support to sub-national governments when they issue a challenge under chapter 11. That is important. It is one of the reasons we are seeing these disproportionate failures. We are not doing a good job at the federal level to help sub-national governments defend their interests and their capacity to protect their citizens.
In some cases legislation has been crafted that has not been chapter 11 compliant, that has been sloppy in its design. It was designed for a pre-NAFTA era, but then it failed when exposed to post-NAFTA rigour under chapter 11. We need to make sure that when we draft legislation, both at the federal and the sub-national government level, whether municipal or provincial, that the federal Department of Justice and the department of international trade work with other departments on the federal side that may be issuing a challenge, and/or they work with sub-national governments to ensure they are in fact compliant with NAFTA and chapter 11, and that it is tenable under NAFTA.
The whole approach of how we deal with this has to be looked at from the beginning. If a provincial or municipal level government intends to introduce a piece of legislation, say on the environment, we should make certain that those governments have access to federal expertise in the Department of Justice and the department of international trade to ensure they design the legislation in such a way that it can withstand NAFTA or chapter 11 challenges. The design of these initiatives is critically important.
Second, if the legislation has in fact been implemented in a way that ought to be chapter 11 resilient, then we should offer the provincial or municipal governments full support from the federal lawyers in the Department of Justice and the department of international trade.
Number one, are we doing our utmost at the federal level to support other levels of government in ensuring that they design legislation and regulations that are consistent with and tenable under chapter 11? Second, are we helping them enough, when there is a challenge, to succeed in fighting those challenges?
I would say that on both counts the federal government is not doing enough. We need to reach out. This is a federal government that has simply not engaged provincial governments effectively on some of these matters. For instance, with respect to the whole buy American issue, after seven months of buy American provisions, attacking Canadian jobs and exports at a time when we are seeing unprecedented job losses in Canada, the only leadership we have seen has come from provincial level governments in Canada.
I commend the provincial governments for filling the vacuum, rising to the occasion and taking leadership on that file. However, the fact is that it takes federal leadership and cooperation. I am certain that many of my colleagues opposite would agree that the Conservative Prime Minister has not built strong relations with provincial premiers and governments.
Frankly, at a time of global financial crisis and rising American and international protectionism, it has never been more important that we have a prime minister and a government that reaches out, strategizes, cooperates and collaborates with provincial and municipal governments. I think part of the issue is that the federal Conservative government does not understand the importance of close collaboration with provincial governments on these issues.
I alluded to the second issue earlier. We have to ask how we deal with the current chapter 11 provisions in NAFTA. I believe that the international trade committee should study chapter 11 thoroughly. I think we should put a significant amount of time into the study of chapter 11 so that we understand it.
The question that comes after is that when we have a more granular understanding of what we might do differently if we were negotiating a NAFTA again, would it then be in Canada's national interest to open up the NAFTA during protectionist times? I would assert that the bar had better be pretty high in terms of the gains to us if we were to propose to open up NAFTA during these times, because otherwise the risk would be very significant.
The third question is how we can better inform ourselves and our negotiators for future trade agreements. Clearly, national treatment is central to any trade agreement. We simply have to ensure that our companies are protected against discriminatory practices by foreign governments. That is important for Canadian workers, investors and union members whose retirements savings depend on Canadian equities that are invested in companies around the world.
We have to make sure that Canadian investments are protected. The only way to ensure that is to provide reciprocal protection to those investments. I do not think that anybody who understands the importance of trade would disagree with the principal of national treatment. The question is what the best vehicle and the best approaches are.
I would propose that when we have this study at committee that we bring in some of the people who were involved in the NAFTA discussions. We should bring in people like Gordon Ritchie, who was involved in the NAFTA discussions and who may have some views as to what could be done differently in terms of investor protection, investor state provisions and national treatment for other trade agreements going forward.
I think we should have a discussion at the trade committee about other issues as well, not just about investor state provisions. We should have a good discussion on the whole issue of chapter treatment versus side agreements on issues like the environment and labour.
It is not accurate to say that side agreements are meaningless, because they are not. In fact they can be very substantive and may have certain advantages over full chapter treatment, depending on what is written in the full chapter agreement and what is written in the labour and side agreements.
However, the point is whether we should be looking at what some other countries are doing. Some other countries are moving toward a full chapter treatment approach to some of those issues. Is that more substantive than side agreements with teeth and meaningful provisions to ensure enforcement?
Some trade experts I have talked with have argued that it depends on the specific agreement; it depends on the side agreements and the full chapter treatment. These are the kinds of issues we should have at committee. However, it is only possible if we are able to put our ideological weapons down.
When asked, there are people who simply say that they are pro free trade, because they are from the ideological right. And there are people who say that they are against free trade, because they are on the ideological left.
I think that the 20th century belonged to rigid ideologues and that in the 21st century the issues are far more complex, the challenges and opportunities facing Canada are greater, more frightening in some ways but more exciting in some ways, and it really takes an important debate that is less ideological than some of the ones we have had in this place in the past. That means we have to be prepared to look at these issues, not in terms of being a New Democrat and thus opposed to free trade agreements or being a Conservative and thus in favour of free trade agreements, but in a more mature sophisticated way, to actually study these issues and ensure we believe in trade.
But how can we strengthen our trade agreements to ensure we build a better global governance around issues of human rights? How can we strengthen our trade agreements so that we build stronger global and multilateral governance on issues of the environment? How can we ensure national treatment and protection of our Canadian companies as they invest and diversify their interests geographically outside the U.S.? How can we ensure they are protected and at the same time protect the rights of Canadian governments, national and sub-national, to implement legislation to protect its citizens?
Those are all important questions, and they are the types of questions that I hope the trade committee and this House could discuss and debate in a more open-minded, constructive way and less ideological and divisive way, because these are important issues for the future of the country.
Canada has the first trade deficit it has had in 30 years. As a small, open economy that depends on external trade for our standard of living and quality of life, we are now buying more than we are selling. That is ominous.
These trade agreements are important. There is a need to diversify our trade relationships outside of the U.S., outside of North America. There is a need to deepen our trade relationships with the EU, with India and China. China is growing by over 8% this year, and it is projected to grow by 8.5% next year, with massive investments in infrastructure, high-speed rail, clean technology, environmental sciences, clean energy and commodities, all of which are areas where Canada can lead and excel. We need to deepen our relationships with China.
The current Prime Minister has shown contempt for China and neglect for India.
We, the Liberal Party, believe in deepening our trade relationships with places like China and India, diversifying our trade relationships and building on multiculturalism, not just as a social policy, but as a successful economic strategy to build natural bridges in the fastest growing economies in the world.
These are important debates. We are committed, in the Liberal Party, to dealing with these constructively, to defend Canadian jobs and interests right here and to extend our influence on the world.
Mr. Serge Cardin (Sherbrooke, BQ):
Mr. Speaker, an American company, Dow AgroSciences, sued under chapter 11 of NAFTA for $2 million in compensation, claiming that Quebec's pesticide management code violated its right to sell 2,4-D in Quebec.
Quebec's pesticide management code, which was adopted in 2003, is the only one of its kind in Canada. It sets standards governing the use and sale of pesticides in Quebec. The code prohibits the sale of the herbicide 2,4-D for public health reasons. Quebec chose to ban this product because it considers 2,4-D harmful to human health and the environment. In case of doubt, the precautionary principle must apply.
Members will also recall that the Bloc Québécois member for Rosemont—La Petite-Patrie questioned the Minister of the Environment to make sure the government was committed to defending Quebec's pesticide management code. The government is talking out of both sides of its mouth, however. While the Minister of International Trade is saying he wants to defend Quebec's position on this issue, the Minister of the Environment is telling the United States that Canada must harmonize its policies with the American government's. According to my Bloc colleague, the member for Rosemont—La Petite-Patrie, the actions by the Minister of the Environment, in addition to undermining my efforts as the Bloc's international trade critic in this House at the time, were watering down environmental requirements and favouring the Dow Chemical Company at Quebec's expense.
We know that Équiterre, Ecojustice and the David Suzuki Foundation, along with other environmental groups, prepared an online petition that concerned citizens could sign to express their support for the code. Clearly, the response was in favour of protecting the code.
Moreover, this was the purpose of the motion the Standing Committee on International Trade adopted on March 31, 2009, a motion I had put forward. This motion said that the committee:
||...recommends: that the Government vigorously defend Quebec’s Pesticides Management Code in the case opposing Dow Agroscience and the Government of Canada in order to safeguard Quebec’s right to enact legislation and make regulations in the public interest.
Two key elements stand out in all of this. First, there is chapter 11 of NAFTA and second, there is the right to protect public health and the environment. These two elements are obviously at loggerheads. This brings to mind the many, often heated discussions held on what was known as the SPP, the security and prosperity partnership of North America. The purpose of all these discussions was essentially to lower the bar for regulations in just about every governmental sphere of activity so that they would be comparable to those of the United States. There have been a number of examples or attempts in that sense.
As for chapter 11 of NAFTA, it was drafted and agreed to by Canada's negotiators. It is well known that Canada's negotiators have a very good reputation. I am not blaming them for all this. However, it is the government that tells them what it wants and thus they give direction to the negotiations.
We will always wonder why chapter 11 was included in NAFTA at the time if not primarily to protect corporate investments.
In the case of the United States, it was to protect the investments of their companies in Canada. In the case of Canada, it was to protect its investments in the United States. And look what happened. We began to see an increase in challenges, based essentially on the definition or interpretation of expropriation. We know it is not necessarily easy to draw a clear line in every case.
In Quebec and in Canada, in the wake of regulatory changes, a Canadian company does not have the same power to sue that a foreign company operating in Canada does. It is quite something to give foreign companies additional rights or the freedom to impose their views and to interfere in how Quebec or Canada operates. We know that the Government of Quebec has banned the use of this pesticide because it was being used in more domestic settings and was more likely to pose a threat to the public. When such a pesticide is used on big fields with close to zero population density, it is not the same. However, when the Government of Quebec legislated on this, it was to protect the environment and public health.
We can talk at length about chapter 11 on investments. I will come back to that. The real goal of the United States is to lower standards that restrict their trade. They are then free to sue Canada and in this instance Quebec.
We know this. It is all fine and well to talk about free trade, but the freedom to trade, as the lawyers say, goes something like this: when laws are passed, the freedom of some ends where the freedom of others begins. The freedom to trade, therefore, should also end where the freedom to health and a safe environment begin. Where is the balance? There are people who want to make money, who are prepared to sell all sorts of things. By all accounts, they do not think that way.
In this case, I believe, I am convinced, that the Government of Quebec is correct, and has the right to legislate and impose higher standards. I think that people in general feel that standards must be respected from one country to the next. For example, we heard from representatives of the European Union at the Committee on International Trade. They told us that the European Union had banned certain laundry detergent products. Naturally, the other countries made threats and even wanted to take legal action. The European Union stood its ground. When a sovereign country decides to establish quality standards based on its values and interests—I am talking about the health of its people and its environment—nothing should interfere with that decision. I said sovereign, and that makes me think that if Quebec were a sovereign country, it would likely establish standards and would demand that they be respected in its free trade agreements. That is one of the items discussed while the countries are negotiating.
The negotiating style of many countries makes it clear from the very beginning that some issues are non-negotiable. When a population respects its own priorities—which Quebec would do if it were sovereign—some issues are simply non-negotiable. Of course I support free trade, but not at just any price. We need limits and standards.
With respect to chapter 11, we know that Canada often signs bad agreements. Such agreements are part of a negative trend.They enable multinationals to sue governments directly over the policies they adopt. These companies believe that any measure—social, environmental or whatever—that cuts into their profits constitutes expropriation and requires compensation. These agreements also enable companies to sue for such astronomical amounts that they can prevent the government from working for the common good.
The Conservative government, which wants to give foreign investors complete freedom and does not want to regulate them, is involved in all kinds of bilateral negotiations to sign bad agreements modelled on chapter 11 of NAFTA and the Multilateral Agreement on Investment, the MAI, which everyone deplores.
Investment protection agreements do not have to be that bad. Of all the countries in the world, only Canada and the United States sign these kinds of agreements. The Bloc Québécois believes that Quebec would not copy the Canada-U.S. model, so we are asking the government to change its policy. Multinational corporations, like any other citizen, must submit to the authority of the state.
There can be no doubt that we support investment protection. It makes sense. A company looking to do business in a foreign country must be assured of a minimum level of respect and protection before dedicating assets, money and often human resources to set up shop in that country. However, that must not be at the expense of the country itself, its people or its environment.
Of course, in some countries, laws and regulations are too weak to protect people and the environment. That often happens with Canadian mining companies that are actually foreign-owned. They set up shop in Canada because they can take advantage of the Canadian government's unlimited protection for what they plan to do in foreign countries. These companies take action against labour rights and even the environment, but they are not punished for actions that would be unacceptable in Canada and Quebec.
We are in favour of foreign investment protection. We are in favour of protecting our companies' investments, and by the same token, we are in favour of investment protection in general, because a company can be expropriated for any reason.
For me, the word expropriation has a much broader meaning than to simply say that the company can no longer hope to bring in the same amount of profit as it had hoped when it was first established. As we know, things change. The expropriation we often see in municipalities, both in terms of property as well as measures taken by a municipal government, involves telling someone that he or she must physically change locations for some reason. Of course compensation is given, but not the same level of compensation that foreign companies think they should get, companies that come and set up in a country and then claim they have been divested, not of the assets they actually have and can exploit, but rather of their future, probable and expected profits.
Even the companies in each country cannot do it this way. There are three things wrong with NAFTA's chapter 11.
First of all, the definition of expropriation is so vague that any government measure, except for a general tax measure, can be challenged by foreign investors if it diminishes the profits generated by their investments. Indeed, a Kyoto implementation plan, which would have large polluters such as oil companies pay dearly, could be challenged under chapter 11 and result in government compensation. American companies hold majority interests in Alberta oil companies. Chapter 11 opens the door to the most abusive challenges.
Second, the definition of investor is so broad that it includes any shareholder.
And third, we have the definition of investment, which I will not explain, since I was just told that I do not have much time left.
What is important to take away from this is that any self-respecting nation, like Quebec if it were sovereign, would have high standards to protect its population and its environment, and those standards would be non-negotiable in a free trade agreement that is intelligently prepared and concluded.
I am convinced that protecting public health must be at the top of our priorities because the health of individuals is at stake. Usage must be legislated by those governments closest to their citizens, the municipalities, among others, supported in this case by Quebec.
Investment protection should be adjusted to a greater extent in the agreements the government enters into in the future and in those currently being negotiated, because Canada's existing agreements are bad agreements. We believe that there should be some protection for investments but not to the detriment of public health and the environment.
To conclude, in this agreement, unfortunately, we see the influence of what was once highly touted by the principal negotiators for Canada and the United States, this partnership for security and prosperity. We had to lower our standards to adjust to those of the United States in order to achieve prosperity. But they have been hard hit and that is not what we want in Quebec. We want to protect the health of the public and of the environment. When there is doubt, the precautionary principle must apply. That is what all environmental groups are saying. It is up to us to decide what is good for us and what we should defend in spite of chapter 11, which allows for bad agreements.
Mr. Paul Szabo (Mississauga South, Lib.):
Mr. Speaker, the first item on today's projected order of business was Bill C-23, which is the Colombia free trade agreement. I know it is of significant interest to the House and to many Canadians, particularly those who are concerned about human rights abuses in Colombia and the propriety of getting into a trade deal.
For those who may have tuned in to try to understand what is going on here, I thought I should briefly explain that the members of standing committees do report to the House. In its second report, the Standing Committee on International Trade reported with regard to a pesticide dispute under chapter 11 of NAFTA. Their majority recommendation was that the government vigorously defend Quebec's pesticides management code in the case opposing Dow AgroSciences and the Government of Canada in order to safeguard Quebec's right to enact legislation and make regulations in the public interest.
That is the recommendation to the House. It is a recommendation to the government to express the view of the majority of the committee. I repeat that it is a majority, because the government members of the committee did not support this report. The opposition parties were the ones who made this recommendation. It probably hearkens back to the history of talking about NAFTA issues here. I know it has come up a couple of times in debate with regard to the softwood lumber dispute and in the debates that went on in this place for a substantial period of time.
The debate during that period really demonstrated to Canadians how rigorous this process of dispute-settlement resolution can be, how nasty it can get, how there are different pieces that can take place, how the moneys were going back and forth, and how the arguments were very nuanced and difficult. Again, it was a situation where the majority of the House opposed the deal, but the government was supportive of the resolution.
There is certainly a pattern here that raises some concern. In any case, we are debating this report, which is a recommendation of the standing committee. This debate will go on until no members rise or until three hours have passed and there is a vote on the motion. It is always nice to make reports to the House, the government and the minister, but if we do not want to have the response of the government and we just want make our point and throw it out into all of the reports that are tabled in this place, there is no onus on the government to respond to this recommendation formally.
The government members at committee made their positions known, and unless one reads the transcripts of those committees and looks at the questions in all of the details, most members will not know. This is very complicated material and the issues are very important. When we see these reports, it is interesting to know that if members do not ask for a government response within 120 days it means that they do not want a response. That means that we are just going to throw this into the pool, and whenever members come up to routine proceedings on motions, people can just say, “I would like to move concurrence on that report. Let us talk about that report”.
That is where we are right now. I wish that there had been a request for a government response on this thing, because it was the government members who opposed the majority position of the committee. We are going to be debating this. We will get on to Colombia. There are some excellent speakers on Colombia free trade who are going to be speaking on that bill, so hopefully we will get back to it quickly.
I want to share with members some of the aspects we have been talking about. There has been a lot of talk about chapter 11 and about expropriation and so on. How does all of this tie together? The best thing for me to do is to refer to an assessment on this matter done by a researcher, Meg Sears. She has a Ph.D. and is the adjunct investigator for the Children's Hospital of Eastern Ontario. She wrote a very interesting paper which frames the issue that is before the House and which the committee considered. She is a scientist and a medical writer and she wanted to assist the committee in its study. She has examined Canada's pesticide assessment process by the Pest Management Regulatory Agency, the PMRA as other members have referred to it, and the assessment of the herbicide 2,4-D which is the pesticide which Quebec has banned.
There has been a challenge by Dow. She concluded that Dow's notice of challenge of Quebec's restrictions on the use of 2,4-D shows how Canada's sovereignty to protect citizens from toxic exposures is compromised by NAFTA chapter 11. That is a very significant statement. Our sovereignty to protect Canadians is challenged by NAFTA chapter 11. There is substantial information which I would be happy to provide to members if they are interested, but I would like to go immediately to her conclusion in regard to this matter. She said:
|| The Dow challenge to the regulation of 2,4-D by Québec directly challenges Canadians' ability to take precautionary measures to protect health and the environment. Trade agreements should bring signatories to higher levels of protection, not the opposite, compelling governments to expose their citizens unwillingly to toxic chemicals in their homes and neighbourhoods. Although it is beyond the scope of the present committee, one must also wonder about the extent of PMRA complicity, as 2,4-D was re-registered with incomplete, sub-standard data and misinterpretation of important information.
|| I urge the Government of Canada to defend the rights of all levels of government to enact precautionary measures to protect health and the environment, and to ensure that NAFTA puts Canadians' health before multinational corporate profits.
That is very, very significant. I commend the assessment done by Meg Sears. It shows the importance of this matter and the fact that it was just a report from a committee should not be taken lightly and we should protect Quebec's rights to do this.
I mentioned earlier when asking a couple of questions that there have been similar bans in Toronto and Halifax, but they have not been challenged. If there is an existing challenge under NAFTA chapter 11 with respect to Quebec's ban, we have to ask why that challenge would not automatically be extended. Maybe the mechanics of it is that if one can be won, maybe subsequent challenges could be fast-tracked to bans in other jurisdictions.
I also want to comment on NAFTA chapter 11. We in this place will probably have NAFTA on our agenda as long as there is a free trade deal with the United States. Members have already mentioned their concerns about protectionist measures in the U.S. precipitated by the global economic climate.
We can understand that countries want to do whatever they can to recover in their own economic sphere, but they also understand that we are inextricably linked with our trade relationships and we have existing deals. When there is this aggressiveness that we want to protect and enhance domestic trade, we put pressure on areas such as bilateral trade that occur in some of the aspects that fall under the purview of the North American Free Trade Agreement.
The purpose of chapter 11 is to facilitate the flow of investment within North America. That is what it really gets down to. This is very complicated. It does so by establishing a framework of rules and disciplines that provide investors from NAFTA countries with a predictable rules-based investment climate. These are the kinds of things that happen generically.
When I looked at the rest of the briefing notes, I realized that this is a complex maze of push-pulls and it takes full-time work to really understand. I commend committee members for being able to wrap their minds and their attention around such an important matter when it is fluid and constantly evolving. Like most laws and even our Constitution it is almost like a living document. Every time there is another challenge, another precedent is set. These are the kinds of things that affect the decisions that are taken by Canada and by the provinces.
Chapter 11 also establishes a mechanism for the settlement of disputes that might arise from potential discriminatory charges. In this way chapter 11 effectively prevents governments from taking measures that amount to discriminatory nationalization or expropriation of a foreign investment without paying compensation to the investor. That is the essence of what we are talking about in terms of the current challenge with regard to 2,4-D.
People should know a little bit about the elements of chapter 11 which come up in debate. Chapter 11 is broken down into two sections, sections A and B. Section A has the main provisions.
Article 1102 refers to national treatment and it states that each NAFTA party will treat investors and investments from other NAFTA parties no less favourably than it treats its own investors and investments, in like circumstances, with respect to such matters as the establishment, acquisition, operation and sale of investments.
Article 1103 will come up. It deals with most favoured nation treatment. It states that a NAFTA party may not treat an investor or investment from a non-NAFTA country more favourably than an investor or investment from a NAFTA country.
There is also the minimum standard of treatment in article 1105 which assures a minimum absolute standard of treatment of investments of NAFTA investors based on long-standing principles of customary international law.
Article 1110 has to do with expropriation and is specifically related to the matter before the House in this report. Article 1110 states that a NAFTA party cannot directly or indirectly nationalize or expropriate an investment of an investor of another NAFTA party except one, for a public purpose, two, on a non-discriminatory basis, three, in accordance with due process of law, and four, on payment of compensation equivalent to fair market value.
Most committee members probably had to spend a fair bit of time to understand the meaning of the provisions. I think that is why we have had such hot debates in this place with regard to NAFTA challenges and particularly matters where dispute settlement resolution has not seemed to work.
The key issue in article 1110 is the meaning of the term “tantamount to expropriation”. This is where it gets down to the subtleties. It is well established in international law that the term “expropriation” need not refer to the transfer of title of property. A country can be considered to have expropriated property if its actions have the effect of significantly diminishing the owner's right to extract economic benefit, including profits from that property.
Members will understand that when we are talking about the expropriation issues here, we are not talking about taking away anything. In fact, it is affecting the rights that flow from this matter, to the extent that if Quebec bans the use of a particular pesticide, another NAFTA country is going to be impacted by not being able to either export to Canada products that use that pesticide or something similar to that. That is the subtlety and that is why the term “expropriation” is being used, but not maybe in the traditional sense that members would understand.
Section B of chapter 11 outlines the dispute settlement provisions. These provisions allow the investors of one NAFTA party to directly make claims against the government of another NAFTA party through the arbitration process. NAFTA outlines certain general procedures regarding the arbitration but stipulates that such arbitration must be conducted in accordance with the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, referred to as the ICSID convention, and facility rules of the ICSID or the arbitration rules of the United Nations Commission on International Trade Law.
The mechanism of chapter 11 dispute settlement is not without controversy, as we know. The process has been criticized for its lack of legitimacy and transparency. It also has a limited form of review and no recourse of appeal. That is a challenge. It means that we need to be very careful how we address these matters because when one is in that situation, without recourse for appeal, decisions are full and final and it does get a bit sloppy.
It is also important to note that NAFTA stipulates that no chapter 11 tribunal decision can be used as a precedent in subsequent chapter 11 cases. I referred to the Halifax and Toronto bans on this pesticide, and although there may not be the applicability of a precedent on the disposition of the Quebec issue on the same matter, certainly the arguments and the evidence would be available, although the decision may not be binding. In other words, no body of jurisprudence can be built up over time. Each case is considered to be a unique event.
I thank the members who brought this particular debate to the House for doing the work to take a position. It does raise the question though of why the government does not support the majority decision of the committee. That is very troubling to me and it should be troubling to all members. That is why I am a little disappointed the committee did not ask for a formal government response. The government must be accountable to the House. It must respond. We have missed that opportunity. Maybe the members are satisfied that they heard substantively the government arguments at committee and I hope that they are going to share them on some specific basis.
I had also raised the fact that when Quebec made the ban, it did not have a scientific basis for the ban, but as I indicated earlier and I will conclude with this, the report of Meg Sears states that the Government of Canada should defend the rights of all levels of government to enact precautionary measures to protect the health and the environment of its citizens.
That is the essence of the argument and why the committee took this position. I hope that the government will now respond to the committee report.
Mr. Malcolm Allen (Welland, NDP):
Mr. Speaker, it is a pleasure to speak to chapter 11 and to NAFTA in a more generalized way.
It always amazes me how the proponents of free trade continually talk about its merits, how those who work in the economy and work across the country are the net beneficiaries of free trade and that their living conditions, their economic situation and their social well-being has been enhanced by free trade.
That mantra is bandied about from this side of the House. I heard the member for Kings—Hants say that this morning and I hear the government continually suggest that this is the case. However, no one ever suggests that they look at the statistics. Why on earth would we ever look at statistics to find out if it is true? It is much easier just to say it. It sounds good. It sounds marvellous. It makes people feel good. Then again, if we read the Statistics Canada reports for the most recent period from 1989 to 2005, we find that the opposite is true. Most Canadians did not prosper under free trade and NAFTA. They regressed economically.
Why would we tell Canadians that? Because that flies in the face of negotiating another free trade agreement. We have to tell folks the mythology that this is good for them. It is somewhat akin to telling a child, when his or her first tooth falls out, that the tooth fairy will come. Of course the tooth fairy does come, but usually in the form of a parent, in the night, because there is not a tooth fairy. In the free trade debate, the tooth fairy needs to be put to rest. Clearly what has happened is the average wealth of Canadians has declined and the average wealth of a very small percentage of Canadians has increased.
Let me read into the record the Statistics Canada reports on the four quintile of income levels across the country and what happened to them.
The percentage growth between 1989 and 2005 for those at the bottom of the income scale declined by 14%. This meant they were worse off in 2005 than they were in 1989. Yet we were told by the Liberal government, and now the Conservative government, that free trade would help folks. The numbers do not support it. I do not make up these numbers. I am not the tooth fairy. These are Statistics Canada reports, which are available to all members.
If we look at the second quintile, the second group of folks whose income is relatively low, how did they fare? They fared marginally better than the bottom quintile, but their incomes still declined by 12%. They were 12% worse off in 2005 than in 1989, yet we keep hearing the mantra from Liberals and Conservatives that free trade will be good for them, that they are better off, yet the numbers prove otherwise.
If we look to the third quintile, these folks are moving into the middle income bracket. How did they fare? They did somewhat better than the second quintile in that they only lost 6% of their earnings.
It would be pretty hard for me to convince some of my neighbours to sign on to an agreement where in 16 years they will have less than they have now. That is exactly what we have done to Canadians. Sixteen years after the fact, we have the bottom quintile at minus 14%, the second quintile at minus 12% and the third quintile at minus 6%.
Finally, when we move to the upper middle income bracket, toward the top end, their incomes grew by a paltry 2% in 16 years.
Therefore, who actually benefited from these free trade agreements, the net beneficiaries of them? Lo and behold, when we look at those at the very top of the income range, those who did not really need to improve their incomes all that much from 1989 to 2005 because they were already rich, their incomes went up plus 17%.
We can see what these free trade agreements are about. It is really about certain groups doing really well at the top and everyone else sinking to the bottom.
My colleagues across the way do not like the stats. Why on earth would we suggest to Canadians that they are better off when they are not? Why would we tell them the truth? How can we sell free trade to them if we tell them to sign up and they will be worse off, that we think it is good for the economy, but it will not be good for them personally as workers in this economy.
Is it because workers were not working? The report shows that, on average, Canadian workers whose income was sliding backwards were working more hours. While they were losing in the economy, they were working harder, working more hours and were separated from their families and sliding backwards. In an effort to try to compensate for the fact that they knew they were sliding backwards they wanted to work more and it did not help.
What do we see with their debt load? Unfortunately, as their incomes slid back, we would have expected to see their debt ratio to their household income increase, and that is exactly what happened. In preceding years of the 1980s until about 1986 the average debt load in the household declined. However, starting in 1988-89, we saw an absolute upward trend that has not stopped and continues to this day. The debt load is just shy of 130% of household income or their true assets.
When one looks at that, one has to ask were workers better off because of free trade? I would suggest that statistics are telling us that the tooth fairy really did not come to Canadian workers at all. In fact, the grim reaper came. What they have seen is a decline in their income year after year to the point where all they have done is driven themselves into debt. They have worked an excessive number of hours to try to help support their families, but have slipped behind.
We continue to hear that free trade is good for us and that chapter 11 is a necessary piece, the very piece that takes things away from workers, their rights and their abilities to do things. It allows it to be in the hands of investors at the expense of those folks, which continues to happen.
It befuddles me and really suggests to all of us, I think, that we are not speaking for the right folks. We are speaking on behalf of an investor group at the top end of the income scale that has not slipped behind. It has continually done well. We either have forgot or have never recognized that all of those whom we represent are not doing well at all. We ought to remember them when we develop free trade agreements.
When we look at chapter 11, what does it actually talk to? It talks to the sense of it is going to develop rules. Earlier hon. colleague talked about the dispute resolution. It said that it was going to establish rules for investment in North America. By having rules and discipline with countries that are predictable, there would be a rules-based investment climate. That way the investors would be protected. Note that the investor would be protected. It does not talk about labour. It does not talk about the environment. It does not talk about Canadian workers being protected.
It talks about foreign investors will be assured that they will be treated no differently from domestic investors. I think that was probably the case in the majority of investments made in our country prior to NAFTA.
I learned as a child in school that we needed to get away from the branch plant mentality in our country and build our own Canadian firms because of all the foreign investment here and because this was a good place to come. It probably still is based on the fact that we have an abundant wealth of natural resources and skills and an absolutely world-class workforce that is ready to do its work. However, we still have this leaning toward one class of individuals called the investors.
The other thing that stands out and absolutely amazes me is that if we do something in the House which investors say will hurt their profits, they can decide to take it to the tribunal. It is not just about their actual losses. It says “expected profits”. I always expected that maybe I could be six feet two inches but It did not work out. Who do I sue? Should I sue my parents because I did not grow to six feet two inches?
In NAFTA, we have a provision under chapter 11 where companies can stand and say that we have created a new rule, an environmental protection for the benefit of our country, which is all well and good for us, but that it has hurt them as far as what they expect to make three, four, five years down the road. How do we know those companies will even be in a business three, four, five years down the road, never mind how much money they will make? However, under this ridiculous article, they can actually sue the Canadian government because they lost what they thought they might make. This does not discount the fact that those who run the corporations may have made bad decisions in that intervening period. They just believe they should be able to sue because they might have made a lot of money.
How would one quantify that? How do we quantify what we think we might lose? No one ever wants to lose anything in life but no one can quantify next week, next year or the year after. None of us know what will happen in the next five minutes. That is part of what we call life. It is the great unexpected.
To suggest that somehow there is a rule that allows people to decide they should receive payment for expectations is like relying on the tooth fairy. It seems to me that chapter 11 has more sense about it. It is like a myth. It is like the Aesop's fables one tells to one's children than it does about rules-based adjudication, because that is what it said it was about. In its rules it says that people can go to the tribunal and get a decision but it they lose, too bad. What if the arbitration panel has made a fundamental mistake? Too bad. There is no opportunity to say that there has been an error, a misinterpretation or actually a misreading of what it was about. There is no sense of appeal. That is supposed to be rules based.
All of the rules-based procedures that I and my colleagues in the legal profession are very familiar with understand that a decision made at one level has an appeals process to it because mistakes get made. It gives the party, which the decision went against, the opportunity in a rules-based system to ask someone at a higher level to actually take it into consideration. This one does not. It does not actually penalize those who might bring frivolous claims against us, regardless of what we think is the sense of what we will do.
My friends in the Liberal Party talked earlier about this prosperity. I want to relate what happened to the workers at John Deere in Welland under NAFTA. The corporation got up and left. Now, did the workers get to sue the corporation for leaving? No. Did the corporation close? No. Did the work it was performing in Welland cease to exist? No. It simply went away because NAFTA let it go. There was no payment to the workers or to the community. It had no sense of being sorry and made no apology. It simply left, went to Mexico and some work went to the United States. The company left those workers because the rules said it could.
Why, in this Parliament, would we write rules that do not talk about workers, our citizens, the people who live here and the people we represent? I did not get elected by major multinational corporations because they do not vote. They simply are entities. It is real life people who send us here to work for them, not the other way around. However, when we come here we seem to be working on behalf, when it comes to these trade agreements, of something other than the people.
The statistics that I quoted earlier from Statistics Canada clearly show that we are in decline when it comes to the ability of ordinary, hard-working Canadians to make a living and keep up. They are slipping behind.
The big issue being raised now by both the government and the Liberals around the buy America act is the recent pronouncements made last week. The buy America act has been in force for the best part of 40-odd years, perhaps even longer. Those of us who live close to the border knew what was transpiring because the Americans were not covered under chapter 11 and they used it exclusively to ensure they were the net beneficiaries. They continue to do it to this day.
Over the years, I have spoken with some local politicians who are friends of mine. I would defy any member in the House to ask their constituents this question: “When I collect your tax dollars, would you like me to spend it on, (a) you and your neighbours; (b) on those who live in Florida,; (c) on those who live in Germany; or (d) on those who live in Colombia?” I am absolutely certain that 99.9% of those constituents will choose (a) because it is their money.
We have collected their money and I am sure they would tell us that when all things are equal, we should spend it on them because that is really why we collected it in the first place. It was collected for the net benefit of all who live in this land and to make this country a better place.
All we have heard with NAFTA is a big sucking sound of the wealth of the majority of Canadians being drained out of the country. Some of it has gone to the upper end but a lot of it has simply left. One need not look any further than Ontario to see the de-industrialization of southwestern Ontario under NAFTA in the last 18 years as it has slowly evaporated. The rush lately has been even larger.
I appreciate that my friends talked about rules and the hon. member talked about the precautionary principle, which in science is actually a rule. We like rules and a science-based approach to things. The precautionary principle is actually used by scientists to suggest that what we ought not to do is wait until folks become ill and perhaps die. If we have a sense that something is wrong, we should take action, and that is what the precautionary principle is about.
In the case of Quebec and 2,4-D, the precautionary principle was exercised at the provincial level. We see what happened on the American side with the buy America act and sub-national governments. State and local government have clearly said that NAFTA does not apply to them and here we have a company telling Quebec that it applies to Quebec.
We can see there is a bit of a shift in dynamics where one country that is a signatory to NAFTA has said that sub-national governments are not included and yet the Canadian government has not banned it yet. The Canadian government is working on it through Health Canada and the pesticide management groups, but it is cities like Toronto and others across this country and the province of Quebec that are really sub-national governments. I find it odd that multinationals think it is okay to sue Canada when it comes to sub-national governments but not necessarily sue sub-national governments when it comes to the Americans.
It is peculiar that happens but we can look at lots of other instances. I know the members from British Columbia are much more in tune with the softwood sellout than I am and I will leave that for them to discuss because it really pertains to them.
I find it disheartening when we see the claims against Canada by outside multinationals pertaining to substances that we consider dangerous. One of them was the exportation of PCBs. When I look at the total number of claims, six were environmental protection challenges, five about our natural resources and one about our cultural industry out of eighteen challenges. Clearly, 14 of the challenges are about things that really belong to us, not someone else and yet the challenges are about those. We need to change chapter 11 to ensure we have fair trade, not free trade.
Ms. Judy Wasylycia-Leis (Winnipeg North, NDP):
Madam Speaker, I am honoured to participate in this debate which I consider to be critical in terms of the sovereignty of our nation and the future for many public policies that are in the interests of all Canadians. I want to thank my colleague, the member for Burnaby—New Westminster, who has worked very hard to ensure that this matter not only was addressed by the committee, of which he is a member and serving there as the trade critic for the New Democratic Party, but also ensured, with today's motion for concurrence, that this very important matter is addressed by all of us.
I think it was a Liberal member speaking earlier who asked what was the purpose of this debate, what are we going to achieve? This allows for an issue, often dealt with behind the scenes away from public exposure and away from parliamentary debate, to be brought out into the open, to be discussed by parliamentarians, and to serve as a way of informing Canadians across the country about a critical issue. It gives us a chance to try to convince the government of the day to take action on an important public policy issue, not to hide behind the rhetoric of free trade, because that is fundamental, but to actually take a moment and assess the implications and consequences of a policy that has been at work since 1994.
The opportunity for this debate comes in the most serious form imaginable. It is a question regarding the right of a government in this country, the province of Quebec, to legislate in terms of what it deems to be in the best interests of its citizens, to ban pesticides in terms of cosmetic use. That is a fundamental health and safety issue. It affects all of us because we know that there are governments in this country which allow for the use of 2,4-D in cosmetic spraying of lawns, knowing that there are serious health consequences, knowing that there is an impact on children's health, the health of pregnant women and many other citizens. It is fundamental that we address this issue because of health but also in terms of the right of a government to legislate what it deems to be in the best interests of its citizens.
We are dealing with this issue because we have a trade agreement that allows for a foreign company to challenge a government of this land about policies which it makes on the basis of what is in the best interests of the public and based on science. Those in the House who stand and say this is about a government making a decision willy-nilly, without cause for concern, without reflecting on the science, I say to them that they are wrong. In fact, the precautionary principle, which is at the heart of this matter, comes out of science. It says that when there is science that shows a particular product, chemical or substance has an impact based on preliminary research studies on individual health and well-being, then that is enough of a cause for concern to say that this matter should be put on hold, it should not be allowed to go forward until we have the complete science, the complete understanding.
It is the simple precautionary principle to do no harm. It is the role of government to ensure that the food we eat, the drugs we take, the water we drink, and the air we breathe is safe beyond a reasonable doubt. If something is developed and becomes known to us that it may have a detrimental effect on health and well-being, then it is the job of government to assess and to put on hold in order to stop the spread of that dangerous substance until such time as the producers of that chemical or that substance can prove that it is safe beyond a reasonable doubt. That is what is at the heart of this matter.
We have a trade agreement that allows for a company like Dow AgroSciences to actually challenge a government in this country because of a policy that it has adopted in the best interests of its citizens.
That is from an aspect of NAFTA, chapter 11, which allows foreign investors to challenge governments, whether it is the province of Quebec or the Government of Canada. It allows a company to challenge our right to make decisions based on what is in the best interests of every citizen of this land regardless of where they live and how much money they make.
Chapter 11 is one of those egregious aspects of NAFTA which must be revisited. If there is anything that comes out of this debate, there must at least be agreement to do that. Maybe we could convince the Conservatives, before this debate is done, that we need to rethink chapter 11.
My colleague from Welland raised the full range of issues under NAFTA. He made a very good point when he said that NAFTA as a whole may not have served this country the way others in this chamber suggest it has, and that it has not been of the great benefit to workers and to ordinary families that Liberals and Conservatives have touted for years.
There is considerable evidence to suggest that my colleague may be on the right path when he says that we should actually look at NAFTA from the point of view of fair trade and whether or not it has actually accomplished what Canadians had hoped it would.
Numerous studies have been done suggesting that there are problems with NAFTA. We should not hide those problems under a bushel just because it has suddenly become not kosher to talk about the problems with NAFTA. We should let them out in the open and talk about them to see if there is legitimacy to those concerns and whether or not we need to reconsider our approach to trade in this context.
The work of the Canadian Centre for Policy Alternatives is exemplary in this regard. I do not think anyone in the House would doubt the work of the Canadian Centre for Policy Alternatives when it puts out studies authored by the likes of Carlo Salas, who holds a Ph.D in economics and currently is a professor of regional development at El Colegio Tlaxcala and who is also a member of the board of directors at the Instituto de Estudios del Trabajo in Mexico City.
I do not think we would question the credentials of Bruce Campbell, who is the executive director of the Centre for Policy Alternatives. I do not think we would question the work of Robert Scott, who holds a Ph.D. in economics and is the director of international programs at the Economic Policy Institute.
These three individuals did an extensive study a few years back just assessing what the impact of NAFTA has been on workers. They concluded that workers have suffered more than they have gained as a result of being governed by this trade agreement.
I will not go into all the details, but I will reference what my colleague from Welland has put out in real terms as he sees and experiences these problems in his own constituency where workers have lost their jobs, have been at the whim of the marketplace, and feel little benefit from NAFTA.
The study that I have just referenced by the Centre for Policy Alternatives says the following:
|| NAFTA promised Canada increased economic growth, income, and employment across all sectors, regions, and income groups; closure of the longstanding productivity gap with the United States; the creation of a more diversified, efficient, and more knowledge-based economy; and, an economy that would maintain and strengthen the generous Canadian social model.
However, the authors of the study found that those promises, that golden age that would come as a result of NAFTA, have really not materialized. We have seen the whole nature of the workforce change to become one where employment is precarious, where people have to resort to many jobs in order to make a living, and where the very labour unions that try to protect the jobs and the working conditions of those workers are threatened under NAFTA.
However, enough said about NAFTA, in general, because in fact what we are really talking about today is chapter 11, the provision in NAFTA that allows for foreign companies, foreign investors, to challenge governments.
I am not saying as my Liberal colleague, the member for Kings—Hants, has suggested, that we should ignore the issue of national treatment. I do not dispute that for one moment. In fact, I think we need a mechanism that would allow us to return to the days when it was a question of government-to-government dialogue and deliberation, in terms of the issue of national treatment. I do not think there is a credible author in this country, in terms of economic and trade policy, who would suggest that having a mechanism that allows for foreign companies to challenge governments is in the best interests of any one of us, or that it in fact does anything but challenge our very ability to operate as a sovereign nation. The experts have all pointed out the problems. The research branch in the Library of Parliament has made it clear that under the national treatment provisions it must be proven that the alleged measure is less favourable to the foreign investor and that the foreign investor and domestic investor are in like circumstances.
Frances Russell, who has written about this extensively in the Winnipeg Free Press and who has incredible in-depth expertise in this area, has said very clearly in an article that she wrote on March 5, 2008:
|| Before NAFTA, private investors' grievances were adjudicated on a government-to-government basis. But NAFTA allows foreign capital to sue government directly.
|| And sue they have—for tens of millions of dollars—challenging the public's right to regulate the environment, culture, agriculture, natural resources, jobs and health and safety. As of Jan. 1, 2008, there have been 49 investor-state claims under NAFTA: 18 against Canada, 17 against Mexico and 14 against the U.S. So far, Canada has paid $27 million in damages and Mexico, $18.7 million. To date, investor claims against the U.S. have been dismissed.
That is just a sample of the expertise and the research out there, in terms of the effect of chapter 11 on this country and our ability to make decisions that are in the best interests of the greater good or the public as a whole.
Nowhere is that more apparent than when it comes to health care. And this is what I want to insert into this debate. If we allow Dow Agro to proceed with its claim for damages in the province of Quebec, and if the Government of Canada sits back, does nothing and ends up paying damages, we create an open door for similar corporate interests. This is not just about a ban on the cosmetic use of pesticides. It in fact has implications for the entire health care system.
Let us just stop for a minute, in terms of pesticides. I think the question was raised earlier, what about all those other jurisdictions, the City of Toronto and other municipalities, that have moved to ban the use of 2,4-D for cosmetic care of one's lawn? The question was, why was Quebec picked on and not the rest?
I think the answer is clear. The industry picked the most advanced state to make its case with the hope that once it wins, it will then have the wherewithal to pursue similar actions against other municipalities. So, the door is in fact open to the challenge of wise decisions made by local governments in the best interests of the citizens they serve.
Now, if we look at the broader issue of health care, I think it is probably fair to say that if NAFTA had been in place 25 years ago and if chapter 11 had been around when medicare was formed, I do not think we would have seen medicare reach fruition.
That is not just my opinion. That is the opinion of many experts in this country. I want to read from a chapter of a book entitled Medicare: Facts, Myths, Problems, Promise, edited by Bruce Campbell and Greg Marchildon from the Canadian Centre for Policy Alternatives.
This particular chapter is by Scott Sinclair and is entitled “Protecting Medicare from Foreign Commercial Interests”. He says the following:
|| Underlining this concern, Jon Johnson, one of Canada's leading trade lawyers, bluntly informed the Romanow Commission that, if the NAFTA expropriation provisions “and the accompanying investor-state dispute settlement mechanism procedures had existed in the 1960s, the public health system in its present form would never have come into existence”.
He goes on to say:
|| This sobering reflection stands as a warning that the power of modern trade treaties—whose scope has expanded well beyond traditional trade matters to interfere with the ability of governments to limit and regulate commercial interests—must be contained in order to safeguard the future of...medicare.
The experts in the field say that if chapter 11 had existed back in the 1960s when Tommy Douglas and others with him struggled to bring us medicare, we probably would not have been able to achieve it.
Let us just go back 25 years, since this is the anniversary of the Canada Health Act, and consider the fact that we may never have actually accomplished such innovative legislation if such a trade treaty, with chapter 11 provisions, had been in existence.
Scott Sinclair goes on to say:
|| The principles that underlie Canada's medicare system are at odds with the thrust of modern trade treaties. By establishing a public-sector health insurance monopoly, and by regulating who can provide health care services and on what terms, the Canada Health Act and the medicare system cut against the grain of trade and investment liberalization treaties.
We can see that on a regular basis. I do not know how many people in this place will remember the very vigorous debate we had in this place about six or seven years ago when the Alberta government threatened to bring forward a private hospital, under what was known as Bill 11. We stood in this House every chance we could get to try to convince the Liberal government at the time that in fact the acquiescence to the development of a private hospital in Alberta would open up the doors to private investors right across the board, in the same way that they have stood in the House today and agreed with us that in fact these provisions threaten the right of a government in this land to ban the use of 2,4-D for health reasons.
If only we could have gotten the Liberals back then to understand this, we might not be in such bad shape today, but the fact of the matter is that it is not too late. We still have what some would consider to be one of the best health care systems in the world, which is largely publicly administered on a not-for-profit basis. There is some encroaching privatization, that is true, but it is the opening of that door in any significant way that in fact hampers our ability to maintain a public, not-for-profit system.
As living proof of this, and just to bring us to a current attack on our system as a result of chapter 11, I want to refer to a situation in British Columbia where an Arizona health care entrepreneur is challenging the Canadian government because he believes his plans to build a private surgical centre in British Columbia are being thwarted, and he is seeking $155 million in redress from the Canadian government.
I have just begun with the tip of the iceberg. There is so much more to be said in terms of chapter 11 and its impact upon health care, upon our model of medicare system. We have to be vigilant every step of the way.
I want to conclude by saying that every government should have the right to make decisions that are in the best interests of citizens, and when foreign investors, for reasons of profit, interfere with that right and suggest that we are impeding their right to make profits, and we thereby in the process put the public interest at risk, we are doing no one any favours.
We must stand firm against chapter 11 and we must find a way to ensure that this current situation in Quebec is dealt with immediately.
Hon. James Moore (Minister of Canadian Heritage and Official Languages, CPC):
Madam Speaker, I listened attentively to the speech being delivered by my good friend from Winnipeg. I have a great deal of respect for her.
However, on this subject we will disagree, and I will rebut her closing statements by saying that this House and Canadians should stand firmly in favour of chapter 11, should stand firmly in favour of NAFTA for simple reasons.
First, I was disappointed that she kept bridging back to using the Canadian Centre for Policy Alternatives as her source of data. That is a rather shaky foundation given that everything the Canadian Centre for Policy Alternatives does and everything they write has already been written before they have begun. All of their suppositions are cemented in. There is no imagination. There is absolutely nothing that the centre does.
That is the counterpoint. If I stood up and used them as the only source, I think some members would have the same point of view.
The Canadian Centre for Policy Alternatives is not a serious organization to be basing serious public policy on.
That said, chapter 11 of NAFTA extends an existing Canadian principle to our trading partners. The idea of national treatment existed before NAFTA. There would be no difference in the way that Canadian law would treat foreign companies doing business in Canada if chapter 11 were not in place. National treatment existed before NAFTA.
What NAFTA and chapter 11 do is extend to our trading partners the legal protection and the legal requirement that businesses cannot be discriminated against because of where they are from. It changes nothing in Canada. It changes everything for our trading partners.
Chapter 11 protects Canadian companies so that when they are doing business in the United States or Mexico, they cannot be discriminated against because they happen to be Canadian-owned or Canadian-based. Chapter 11 protects Canadians. It extends a Canadian principle. This is an important value.
The member is saying that we need to get rid of chapter 11. It is the very essence of NAFTA. It is the very essence of equal treatment. To say that somehow Canadian businesses are being discriminated against because of chapter 11 is mind-blowing to me, because to say that gets it exactly backwards.
National treatment for foreign companies operating in Canada existed before chapter 11. Chapter 11 protects Canadian companies so that the principle on which we treat foreign companies operating in Canada is extended to Canadian companies operating in the United States and Mexico. To get rid of chapter 11 would handicap Canadian companies and allow them to be discriminated against when operating in the United States and Mexico.
My question is, does the member not understand that?
Mr. Bernard Bigras (Rosemont—La Petite-Patrie, BQ):
Madam Speaker, four minutes is not a lot of time for such a substantial issue.
I would first like to thank my colleague from Sherbrooke, who introduced this motion in committee. It gives us the opportunity to have this debate in the House of Commons today and its aim is to protect Quebec’s pesticide management code against certain multinationals that would like to challenge it under chapter 11 of NAFTA.
We on this side of the House are here to defend Quebec’s prerogatives and Quebec's regulations. The motion introduced by my colleague bears witness to the fact that the Bloc is here to defend Quebec’s laws, while those on the other side of the House are still wondering whether we should be protecting laws passed by the provinces when there are potential challenges to those laws under chapter 11.
This is important for Quebec. The pesticide management code stands as an example in Canada, and to date it has been used as a model by Ontario. When it was adopted in Quebec in 2003, it regulated and banned a number of pesticides based on the precautionary principle. That is the principle Quebec applied in banning 2,4-D, for example, a pesticide that is currently marketed and sold by Dow AgroSciences. That pesticide can have consequences for human health. For that reason, Quebec decided to ban it. Unfortunately, certain multinationals are using the provisions of chapter 11 to challenge Quebec’s regulations, when those regulations have been approved and adopted by the National Assembly of Quebec.
What do we expect of this government? We expect the Minister of International Trade to stand up on the international scene, to defend Quebec’s prerogatives and to defend public health in Quebec by protecting this law, on which there was consensus in the National Assembly of Quebec. The consensus in the National Assembly of Quebec, echoed by environmental groups in Quebec and Canada, could create a precedent if the government continues on the path of declining to defend Quebec’s legislation.
The government has to stand up on the international scene and defend Quebec’s prerogatives. Unfortunately, we have questioned the Minister of the Environment and the Minister of International Trade several times, and they have refused to tell us anything more.
There are facts that show that this pesticide can have health consequences. In fact, this is inconsistent for a government that several years ago tabled a bill about pesticides. Our government says it wants to protect public health, but at the same time it is trying to stick a spoke in the wheels of Quebec, for example, which has adopted this code.
To conclude, and this is what the motion introduced by the member for Sherbrooke means, we expect that the Minister of International Trade will stand up and defend Quebec’s legislation against multinationals that refuse to apply the precautionary principle.