Elizabeth May: CETA and ISDS Provisions – Debate in the House of Commons on Bill C-30

On Monday, December 12th, 2016 in CETA, Debate, Issues, Parliament

Comprehensive Economic and Trade Agreement
Government Orders

Elizabeth May Saanich—Gulf Islands, BC:

Mr. Speaker, it is an honour to rise in the House at the point of calling the question on Bill C-30, the bill that would bring in the comprehensive economic trade agreement between the European Union and Canada.

I have the honour to represent the only party in this place that has voted against all investor-state agreements. Although mostly the NDP members vote against them, they do not always. I would urge them to reconsider and ensure, for the future, that all investor-state agreements be rejected. They really have nothing to do with trade at all. I want to dive into that aspect of the investor-state agreement and touch briefly on the other aspects Canadians should be concerned about.

First, as many members in this place have already raised, it will increase the cost of pharmaceutical drugs. It is very clear that this will happen. Numerous independent studies have looked at the implications of the so-called CETA on drug prices for Canadians.

Second, it is also clear, and it has been raised by a number of groups, that the language the European Union wants in the text on the question of municipal powers for procurement will also be negatively affected by CETA, including access to procurement for municipalities, academic institutions, school boards, and hospitals. If they should decide that they want to make sure they are buying locally, they could be offending the provisions of CETA.

The third part is the most controversial. It is certainly the most controversial in Europe. It is why Canadian parliamentarians are being sold a bill of goods when we are told that there is any urgency here. I am really surprised that the Liberal government chose not to have significant review and consultation nationally. We had that on the trans Pacific partnership agreement but not on the comprehensive economic trade agreement with the European Union. This is surprising, given that there can be no need for urgency in Canada to ratify when there are 28 countries, and an additional 10 subnational groups throughout the European Union, that have yet to ratify, and given that there is still a pending decision from the European Court of Justice as to whether the comprehensive economic trade agreement is compatible with European law.

The controversy within Europe is overwhelmingly about the one piece of this agreement that I think could be very conveniently and easily removed without affecting the trade aspects at all. This takes some underscoring. What kind of trade agreement has an entire section that has nothing to do with trade? The answer, these days, is almost all of them. We are being sold, hook, line, and sinker, the notion that a trade agreement must include something called investor-state dispute resolution systems, or FIPAs, foreign investment protection agreements.

The first of these anywhere in the world was chapter 11 of NAFTA, and we have a lot of experience with it. I do not believe that even the negotiators of NAFTA believed that they were introducing anything novel when they negotiated chapter 11. As much as Canada had a national debate on NAFTA, chapter 11 never came up, because it was a sleeper provision. It might have stayed asleep, actually, if it had not been for the ingenuity of a Toronto lawyer, Barry Appleton, who decided that chapter 11 of NAFTA could be interpreted in a completely novel way.

The essence of the legitimate protection of investor interests in other countries is that we do not want a government coming along and nationalizing the assets, saying, “You have built a lovely refinery here. We are now going to say it belongs to the government of ‘fill in the blank’, and you, as an investor, are not going to get your money back on that.”

That is what people thought chapter 11 was initially, because it talked about protection from expropriation, but chapter 11 used some novel language. It talked about governmental measures that were tantamount to expropriation. Here is where the clever lawyering came in.

The first chapter 11 came to us when this Parliament banned the trade and use of a toxic gasoline additive, a manganese-based gasoline additive, that had a human health threat component. It also gummed up the diagnostics of the on-board catalytic converters for automobiles, so car manufacturers were worried that it would void their warranties. Environment Canada was worried that it would cause more air pollution. Neurotoxicologists, like Donna Mergler, at the University of Quebec in Montreal, was worried about it causing an increase in a disease that looks a lot like Parkinson’s, but it is manganism.

Well, Parliament banned it, but because of a chapter 11 NAFTA challenge from a private corporation in Richmond, Virginia, Ethyl Corporation, Canada found itself in an arbitration case. This was just the first of many, and we keep losing them, or we keep having them settled out of court, although we cannot call these places courts, unless we use the word “kangaroo” first. These are arbitrations in hotel rooms with private arbitrators. They make money being arbitrators. They are expert lawyers. We can find Canadian lawyers who claim to be environmental lawyers suddenly selling out to be expert lawyers for U.S. corporations at these secret hearings.

The secret hearing process under NAFTA in chapter 11 is egregious. Just as egregious is the Canada-China investment treaty. I would have to say that it is more egregious, because every investor from the People’s Republic of China is going to be a state-owned enterprise for the People’s Republic China. Therefore, their ability to sue us is virtually unlimited. Of course, the Canada-China investment treaty never had even as much debate as we are getting on CETA. It never went through Parliament at all, because previous Prime Minister Harper approved it in cabinet, confidentially. The treaty binds the Canadian government until the year 2045 to the People’s Republic of China, and its state-owned enterprises have more right to challenge decisions made in Canada than any Canadian corporation does.

CETA falls somewhere in between. CETA is being sold to us by many as the gold standard. It was the head of trade negotiations for the European Commission, Cecilia Malmström, who came up with the idea that since this investor-state provision in CETA is so controversial and is attracting so much protest from within the European Union, maybe we can make it look more like a real court and end the fact that it is so clearly profit driven.

Can members imagine arbitrators who are one day working in their big downtown law firms and the next day are essentially judges determining whether the decisions passed through parliaments around the world are going to hold up to their private scrutiny? There is no appeal, no oversight, and no room for intervenors to make the case as to why it was appropriate to ban a gasoline additive or to stop the export of PCB-contaminated waste or to not put a toxic waste disposal facility next to a town’s freshwater supply. These are all real-life examples under chapter 11 where the polluters have won and the citizens have lost, and it happens over and over again.

CETA proposes some improvement, no question. It is much better than chapter 11 of NAFTA and better than the Canada-China investment treaty, which we seem to have forgotten ever even happened in this place. When I hear Conservative members getting up and asking whether the new administration under the Liberals is moving too close to China, I kind of want to run over, shake them, and ask if they do not remember that they passed, in secret, or their cabinet did, the Canada-China investment treaty, which is the worst of all of these.

Professor Gus Van Harten, of Osgoode Hall Law School, literally wrote the book on the bad investment deal with China. The book is called Sold Down the Yangtze, if members want to pick it up to find out how our sovereignty was sold out by the Harper administration.

Gus Van Harten has done a careful study of what is being offered in this so-called gold standard, and there definitely are flaws.

The arbitrators will have a more permanent roster. Can members imagine if our judicial system picked judges at random from the private sector, and they did better on cases where the rich guys won? Can members imagine how fair our judiciary would be seen to be? Well, CETA makes an improvement on that. There will be a permanent roster of such judges. They will still be drawn from private-sector work, and although they will be prohibited under the CETA terms from acting as advocates and lawyers before a CETA investment court, they will not be barred from operating as advocates and lawyers under other dispute resolutions, such as chapter 11 of NAFTA.

There is still this culture of an elite group of corporate lawyers who are literally global ambulance chasers. They find companies and tell them that they can sue a government if they want to.

The sad part, as well, is that, for a moment, Cecilia Malmström’s proposal called for allowing civil society to come forward as intervenors. That part of her proposed gold standard was dropped.

My plea to the current government, and my plea to all parliamentarians, is to dig in our heels on this. I commend the NDP caucus for digging in its heels on this. We should dig in our heels and say that these are anti-democratic by definition.

There is no chance in the world that a company that emanates from the European Union is going to expropriate Canadian property in Europe, contravening all the laws and international common law practice. We are in a safe zone here, developed country to developed country. Let us get rid of the unfair investor-state provisions and fix CETA so that it is about fair trade.

 

Irene Mathyssen London—Fanshawe, ON:

Mr. Speaker, there is an old saying that fools rush in where wise people fear to tread. My question has to do with rushing in to sign this agreement.

We know that CETA will not be fully ratified until all 28 EU member states have passed the agreement in their own parliaments. Clearly, we have time. We should take that time.

I wonder if the member has any thoughts in regard to taking time so we can address the issue of investor-state provisions and the very clear concerns expressed by CELA in regard to environmental degradation. Of course, there are our dairy farmers and those who produce the good food we rely on. Can we accommodate those folks? Can we slow down? Should we?

 

Elizabeth May Saanich—Gulf Islands, BC:

Mr. Speaker, absolutely we should slow down. This is going to take a minimum of five to seven years to get through the European parliaments we are dealing with. We also still have the very substantial, some might say risk but I say hope, that the European Court of Justice will say that it is not in accordance with European law to allow Canadian corporations to sue European governments.

The shoe is on the other foot. It is something like the Ajax mine they pushed in Kamloops, B.C. that local residents do not want. It is owned by a state-owned enterprise from Poland. If CETA does not go through, the B.C. government can turn down the Ajax mine without the risk of a corporate suit against B.C. taken at the national level. Goodness knows how much money we could lose.

I have to underscore this: The decisions under investor-state provisions have nothing to do with trade. They do not involve Canada doing anything wrong. They do not involve us violating any scientific principles or acting against evidence. We just have to be shown to have cost them money. That is it. It is completely corrosive to democracy.

 

Daniel Blaikie Elmwood—Transcona, MB:

Mr. Speaker, many European countries had reservations about signing this agreement, and many have now signed but with the proviso that they have not yet ratified. The debate within Europe, especially about the investor-state dispute settlement clauses, is far from over.

There are other aspects of the agreement that could be positive, and there are some negative ones too.

I am wondering who the member thinks is putting on all this pressure. If the investor-state dispute settlement clauses are what risks having the deal fall through in Europe, who is pushing for them? If it is the Canadian government, why would the Canadian government be willing to risk the rest of the deal for the sake of keeping these provisions? Certainly not many of the governments in Europe are pushing for these. In fact, that is where they are getting the push-back from their own population on this deal. Who is defending these, and why is it so important to keep them in there if it jeopardizes everything else the Liberals and Conservatives say is good about the deal?

 

Elizabeth May Saanich—Gulf Islands, BC:

Mr. Speaker, that is, as they used to say on the old TV show, the $60,000 question. Adjusted for inflation, I guess it is now the $6-trillion question.

We have issues with some of the trade aspects, and I am glad my friend from London—Fanshawe mentioned the dairy threat. I mentioned pharmaceuticals. There are the procurement provisions, but even they are not primarily about trade.

What we are talking about here is increasing the powers of transnational corporations while decreasing the regulatory powers of governments. In whose interest is that? It is not in any sovereign nation’s interest. It is in the interest of transnational corporations. It is the first plank of global corporate rule, and it is being advanced by the corporations.

The current Liberal government should look at who pushed it in the last round of negotiations, realize it was the Harper administration, not the Europeans, take it out, and start a rethink of all these investor-state provisions and renegotiate them so they make sense and defend the sovereign rights of governments to protect public health, safety, and workers’ rights within their own countries.

 

Daniel Blaikie Elmwood—Transcona, MB:

Mr. Speaker, it is a pleasure to rise again to speak to CETA in the House, because there is a lot to talk about and I do not think we have done a good enough job yet of discussing what is in this deal. We have heard a lot of platitudes by those who support the deal and, I would say, not a lot of information. The government has certainly not provided any detailed study of the anticipated economic impact of this deal. Canadians are supposed to just take it on faith that somehow it is going to be good for them, their jobs, and their communities.

It is reasonable for Canadians to expect at any time, and particularly from a government that has promised to bring back evidence-based decision-making and a scientific approach to government, to be provided with information and analysis on the particular ways that the government thinks this deal would be beneficial. However, we have not received that at all. Instead, we get an ideological repetition of the idea that these deals must obviously be good.

The NDP, instead, has been trying to offer an example of how to look at an agreement’s details, to evaluate the various clauses, and to come to a conclusion about whether, overall, it is a good agreement for the country. I do not think it is any secret that the conclusion New Democrats have come to on this particular deal is that it is not, on balance, good for Canada. I will get to why.

There is one thing we need to recognize, first and foremost, which may sound silly. When considering the positions and arguments advanced by other parties, it bears repeating that trade deals are an important part of public policy. It is not as if trade, on the one hand, is separate and divorced from all the other public policies of government, on the other hand. Trade deals have important implications for governments, particularly these kinds of comprehensive trade agreements. They set the economic framework and a number of other important rules under which government can or cannot apply other levers of public policy.

Consider, for instance, a previous trade agreement that Canada once had with the United States called the Auto Pact. It was an agreement on the trade of a particular good, in this case automobiles, across the border. The people who negotiated and concluded that agreement recognized that trade deals were public policy. Therefore, the public policy goals of that agreement were not just to create more wealth for transnational corporations. They said that if they were going to sign a trade deal, they needed to enunciate what their public policy goals were. An important public policy goal was to ensure that jobs were created within Canada and that the goods being sold in Canada actually meant that Canadians got a slice of the production of that good and received wages for the goods sold in Canada.

When we talk about trade deals of different kinds and the values that can be represented in them, here is an example of a trade deal that we should not need to approve just because it concerns trade. Let us face it, multinational corporations have negotiated with themselves, because they are advising all of the various governments involved in these negotiations. These are not negotiations in which union leaders and people represent the interests of the environment and ordinary Canadians. They are largely negotiations with government representatives and representatives of multinational corporations meeting behind closed doors and coming up with rules. Then, when they come out of that negotiating room, we are told that either we agree with trade or we do not, and that this particular set of rules that has been negotiated behind closed doors represents the best possible scenario for ordinary Canadians. That is a laughable claim. They never provide any evidence to back up that claim and we are supposed to just take it on faith. When we look at agreements like this, it is not clear what the public policy goal is.

Consider CETA, for instance. This agreement, we know, because it has been confirmed by a number of independent studies, will raise the cost of pharmaceutical drugs in a country that already has among the highest such costs. We need to go from where we are right now with respect to the costs of drugs and to find ways to bring those down, and we know that CETA would move us in the wrong direction. What gain would we be making that would offset that loss, unless the public policy goal, perversely, of the government is to fatten the wallets of international pharma?

I do not think that is a defensible public policy goal. However, if that is the goal of the government, let it say so; and if it is not, let it tell us what we are getting out of this deal that counteracts that effect on Canadians. If everyday Canadians are made to pay more for their pharmaceutical drugs, that is a tangible cost, and what tangible benefit can they expect to see in return?

There are lots of other ways we could pursue other public policy goals within the context of these kinds of trade agreements. For instance, we could say that because we want green public transportation in Canada and with our trading partners, whether they be in Europe, the United States of America, or wherever else, we want a firm commitment, with timelines and penalties if these goals are not met, to work toward a common charger for electric vehicles. That would be a legitimate thing to do. Certainly, if a trade deal like CETA can pronounce on the minuscule details of municipal procurement, we could certainly reach a deal that would bring its member parties together to pursue a common charging standard that would allow that industry to reach economies of scale, increase production, whether in Canada or the other member countries, and begin greening public transportation in those various areas.

However, we never hear about that because we do not actually get into a debate about what the public policy goals of a trade deal are. Rather, we are just told that this will create massive wealth, that it will be great for everyone, and that everyone is going to get a job after we pass this.

The evidence does not support that at all if we look at the historical record of what has happened in the Canadian manufacturing sector since the late 1980s and early 1990s when we began signing these kinds of agreements. No further evidence has been provided. When we look at the historical track record, I would argue it is not particularly good, and we are not given any contrary evidence.

We might also say that when it comes to labour mobility, for instance, these agreements tend to have lots of provisions on how companies can bring in their own workers from wherever to perform work here in Canada that ought to be performed first and foremost by Canadians who are looking for this kind of work. That is not the right way to go about this in these provisions, but we do know that there are labour mobility challenges. For instance, trade unions who have hiring halls have people here who are out of work and there are places with labour demand in the United States, and those people cannot get that work because in order to be authorized to do the work, they first need an employer and a visa. However, because there is an agreement in which the employers go to the hiring hall to fill their labour demands, the workers needs to be cleared to work at the hall first, but until they are cleared at the hall they do not have an employer so they cannot apply for the visa and cannot be cleared at the hall until they have a visa. That is a legitimate labour mobility issue.

We could be working to address labour mobility issues in that way rather than encouraging the import of temporary foreign workers who then work only for that company and who are thus, frankly, under the dictatorship of that company, because if the company decides for whatever reason that those workers are complaining too much about their working conditions or if the company does not pay them what they were promised when they came over, the workers can be sent back by the company. That is not a fair arrangement for those workers. It is not a fair arrangement for Canadians who are expected to then compete against them. There are other ways to do that, but these do not come up when we are talking about these deals.

What the NDP is trying to do in this debate is to say that there are other ways of doing this and there are other important public policy goals that ought to be taken into consideration when we pursue trade agreements. However, successive Liberal and Conservative governments have failed to do this. That is the problem. That is what we are trying to zero in on. We are trying to show that, yes, trade deals and trade is important, but there is more than one way to do it. There are an infinite number of ways. This particular way, in which we take away the ability of democratically elected governments in Canada and elsewhere to make decisions about health, the environment, and working conditions within their own jurisdiction and to put them at the mercy of trade tribunals that are more concerned about whether transnational corporations are losing money than about the substance of those issues, is the wrong way to do it. That is not to say there is not a way to do it, but it means that we have to ask more of our governments here in Canada when it comes to negotiating a trade deal.

Conservatives and Liberals alike have shown that they are not up to the task. Although we have seen a change in government, we have yet to see a change in approach. We saw the same when David Emerson switched from being the Liberal international trade minister to being the Harper international trade minister, and we saw it when the current Minister of International Trade hugged the former international trade minister on the floor of the House of Commons the day CETA was signed. There is no difference between the two.

 

Elizabeth May Saanich—Gulf Islands, BC:

Mr. Speaker, I again thank my friend from Elmwood—Transcona for his opposition to the investor-state agreement.

Getting back to the core of this, we really do need to ask how we became so ensnared in so many of these agreements that only privilege the rights of foreign corporations. Canadian corporations cannot sue under such provisions if the Canadian government makes a decision that hurts their profits, but if we accept this agreement, companies from Germany, Poland, Belgium, or wherever, would be able to sue the Canadian government just how U.S. corporations can do now. The People’s Republic of China’s corporations can, and if the TPP goes through, another nine countries’ corporations can bring these private cases against Canada.

Would the member agree with me that we need to reopen the whole bundle of investor-state agreements and renegotiate them globally to ensure that they fairly balance the rights of corporations versus the sovereignty of governments?

 

Daniel Blaikie Elmwood—Transcona, MB:

Mr. Speaker, I would agree with the member for Saanich—Gulf Islands that there is something fundamentally broken at the conceptual level with the investor-state dispute settlement clauses. There absolutely is. Giving foreign companies the ability to intervene in areas of domestic policy-making, which we elect democratically governments to do, is just completely backward.

The idea that somehow in order for those companies to get fair treatment in Canada we need these investor-state provisions, when we have a whole body of common law and other international agreements that give reasonable assurances to those companies they will not be treated unfairly, is also wrong. Added to that is a mechanism by which these transnational corporations can use the threat of serious financial punishment of a government in order to direct its policy behaviour. That is what is wrong about this. It is not about fair treatment. That already exists under the law before we sign these agreements. This is about whether we are going to give these companies the hammer and the threat of it use to direct government policy. That obviously is wrong and should not be a component of deals going forward.

 

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