Elizabeth May: Mr. Speaker, I rise this evening in adjournment proceedings to follow up on a question I initially asked on November 30, 2012. That question related to the Canada-China investment treaty, but was much more specifically directed to the concerns that were growing not just in Canada, but around the world about the process of arbitration resolution to disputes that existed between so-called investors or transnational corporations and states, meaning governments around the world. Investor state agreements have proliferated since the first one, which was part of NAFTA, chapter 11.
What I tried to shine a light on in my question was unfortunately missed in the response that came from the hon. President of the Treasury Board. What I was trying to talk about was the problem of global ambulance chasers, an elite within global law firms that represent corporations in suits against nations and drum up the business. They go to countries and say that they think they can sue over a new environmental law that country X just brought in and they can help make that happen. Even if the country where it is based does not have investment business in the country where they could sue, they tell it open an office over there and then it can sue.
This was all brought to light as I referred in my question in a report called “Profiting from Injustice. How law firms, arbitrators and financiers are fuelling an investment arbitration boom”. This is a very important aspect of the pending Canada-China investment treaty. The cabinet of this country has the authority, without a vote in the House of Commons, to approve a treaty that would bind Canada for 31 years. Under the terms of that treaty, should a state-owned enterprise of the People’s Republic of China find one of our laws to be impinging on its expectation of profit, it can go to arbitrators. This is not a court, not a lawsuit in the typical sense. This is appealing to an arbitration in which three powerful lawyers from this elite group of global ambulance chasers will hear both sides and make a determination for which there is no appeal.
In the course of my question on November 30, I pointed out that this report from Europe blew a hole through the idea that arbitration was impartial and unbiased. In fact, these lawyers, who are working at $1,000 an hour, are part of the same law firms that encourage governments to enter into these treaties and then profit from the arbitrations.
Just to give a sense of this, 15 arbitrators from Europe, Canada and the U.S. have settled 55% of the cases. One of these arbitrators, Juan Fernández-Armesto, an arbitrator from Spain, said:
When I wake up at night and think about arbitration, it never ceases to amaze me that sovereign states have agreed to investment arbitration at all…Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.
In other words, this process of arbitration to which we will be binding ourselves in the Canada-China investment treaty puts us at the whim of three elite lawyers who are part of a club that is generating millions from legal fees. Countries like the Philippines have had to spend tens of millions of dollars to defend themselves from lawsuits from cigarette companies. We must stop our blind assurances that investment treaties hold no threats for us and really look at whether arbitrations are impartial.
David Anderson: Mr. Speaker, I am happy to respond to the question posed on November 30 by the hon. member for Saanich—Gulf Islands regarding foreign investment. While she has been talking to one very specific point, my answer is part of a much broader context.
First, I would like to reaffirm this government’s commitment to welcoming foreign investment that benefits Canada. The fact is that foreign investment is crucial to the Canadian economy and the prosperity of Canada. It introduces new technologies and practices that promote growth, employment and innovation here at home. Foreign investment brings some of the most productive and specialized firms in the world to Canada and results in some of the highest paying jobs for Canadians.
This government also recognizes that Canadian businesses must compete in a globalized economy, and we are committed to creating the right conditions for Canadian business to succeed internationally. Canada has signed foreign investment promotion and protection agreements, or FIPAs, with numerous countries, which helps connect our firms to the rest of the world and creates a stable, secure environment for two-way investment between Canada and other countries.
FIPAs accomplish their objectives by setting out the respective rights and obligations of the countries that are signatories to the treaty with respect to the treatment of foreign investment. FIPAs seek to ensure that foreign investors will not be treated worse than similarly situated domestic investors or other foreign investors. They will not have their investments expropriated without prompt and adequate compensation, and in any case, they will not be subject to treatment lower than the minimum standards established in customary international law. As well, in most circumstances, investors should be free to invest capital and repatriate their investments and returns.
We will continue our work to secure access to foreign markets in order to ensure the success of our own Canadian businesses abroad. Most recently, Canada entered into a FIPA with China. The agreement will be tabled in the House of Commons pursuant to the government’s treaty tabling policy. It will then come into force once the order in council has been approved by the Governor General of Canada and the ratification process in the People’s Republic of China has been completed.
With respect to foreign investments, our government has a sound process in place to ensure they benefit Canadians. We have made targeted amendments to the Investment Canada Act that provide greater transparency to the public, more flexibility in enforcement and an alternative to costly and time-consuming litigation. As well, in December, the Prime Minister announced clarifications related to state-owned enterprises to ensure our foreign investment review processes continue to carefully examine investments to ensure they are of benefit to Canada.
Elizabeth May: Mr. Speaker, I am grateful to my friend, the hon. Parliamentary Secretary to the Minister of Natural Resources. Let me just counter a few of the points that he made.
Not only are foreign investors treated as well as domestic investors under this particular type of perverse treaty, foreign investors are treated way better. There is not a domestic company that could sue the Parliament of Canada because we passed a law it did not like.
That is what Ethyl Corporation of Richmond, Virginia did when it did not like a law passed by the Parliament of Canada to restrict the exposure of Canadians to a manganese-based gasoline additive that causes neurotoxic health effects in people. If it had been manufactured in Canada, that particular company would have been out of luck. Because it was a foreign corporation and had benefit of chapter 11 of NAFTA, it could sue.
Not only that, we do not need investor state agreements to open markets or to get investment. Examine Australia, it is a perfect case. It has 10 times more investment from China than Canada. The Australians are at over $600 million in investments from China, but they have refused to sign an investment treaty because they have decided, with a cost-benefit analysis, that such a treaty could create more cost and more damages than benefits.
David Anderson: Mr. Speaker, often from the other side we hear of their opposition to these free trade agreements we are making. Under this government, Canada is open for business.
We will continue to provide an economic climate that allows Canadian firms to prosper. To that end, we welcome foreign investment that provides net benefit for Canadians and helps grow the economy. We will not go down the path of protectionism. Canada cannot afford to fall behind. Instead, this government will take a responsible approach to foreign investment.
The recent foreign investment promotion and protection agreement that was entered into with China will help protect Canadians investing in China, and lead to jobs and economic growth here in Canada.