Mr. Speaker, it is my honour to rise this evening in adjournment proceedings to pursue a question I asked in question period almost a month ago, on November 2. It relates to the comprehensive economic trade agreement between Europe and Canada and specifically to the thorniest part of that agreement, which has drawn attention around the world, and particularly objections at the last minute from the Walloons, and spreading objections throughout the European Union. It is the investor-state provision.

In my question in question period, I drew a link with a proposal for an open pit mine, within the legal boundaries of the community of Kamloops, called the Ajax mine. I picked that as a particular example because it is very controversial, being within the town limits and right near the school. This is a community that likes mining and has other mines, but it is very concerned about this one.

The reason it ties into CETA is that if CETA did not have investor-state provisions, there would be no particular risk with respect to the fact that the Ajax mine’s proponent is a Polish state-owned enterprise. If CETA goes through and is ratified by Poland and Canada, and should the British Columbia government do the right thing and say no to permitting the Ajax mine to go ahead, that company, being Polish, would have rights that a Canadian mining company would not have. It could sue Canada for damages in an arbitration court for a decision made with no trade motivation whatsoever.

Investor-state provisions are poorly understood in Canada, which is particularly ironic, given that we have been at the losing end of more cases than most countries, because the first investor-state agreement was invented as part of NAFTA. It is chapter 11 of NAFTA.

Canada has been brought for investor disputes and tried at arbitrations that are held in secret. Chapter 11 arbitrations are held entirely in secret, such as the dreadful decision that occurred on a split decision of two arbitrators out of three. Both the federal Conservatives and the provincial Nova Scotia Progressive Conservatives refused the most appalling project I have ever seen in my 17 years working at the Sierra Club, the open pit quarry that was proposed for Digby Neck, Nova Scotia, which threatened the survival of the most endangered whale species on the planet. It was a strong decision based on good environmental assessments. To have that challenged by a proponent from the United States, who was claiming $300 million in damages because it was turned down by John Baird, at the federal level, and by the provincial government in Nova Scotia, was truly outrageous.

That is just one example of chapter 11 of NAFTA. Canada has lost many of these cases and has had our laws overturned in Parliament.

The more we look at this, the more we wonder why we do not better understand the threats of allowing investor arbitrators to make these kinds of decisions.

I quote Juan Fernández-Armesto, a Spanish arbitrator, who was quoted in a report called “Profiting from Injustice”, which states:

…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.

I have very little time left. This is what I would like the parliamentary secretary to pursue with me. Let us get investor-state provisions out of CETA. They are better procedurally than the ones under chapter 11 of NAFTA, but they are not acceptable.

David Lametti: Parliamentary Secretary to the Minister of International Trade

Mr. Speaker, I thank the hon. member for bringing her unique voice to the House. CETA is clearly in Canada’s national interest and we feel it is time for all of us to rally around it. On top of delivering tangible growth for our economy and opportunities for the middle class, CETA will provide a strong foundation for Canada and the EU to demonstrate leadership on what is truly a progressive accord, a green accord, a health accord, and a labour accord.

It also enshrines the right to regulate. The ICS provisions are something that the trade committee has looked at over the last few sessions. We will continue to work with the committee, and with our European partners as well.

International investment flows are a key driver of economic growth. European investments in Canada create jobs for Canadians and vice versa. These investments also create new trade opportunities where none have existed before. A comprehensive agreement such as CETA cannot ignore this crucial aspect of the economic relationship between Canada and Europe.

CETA establishes a framework for Canada and the EU to build on our already substantial investment ties. CETA’s investment chapter is designed to give investors greater security, stability, certainty, and protection for their investments, and to secure access to each other’s respective markets.

There is no opt-out provision held by any party for any element of CETA, but CETA has been deemed a mixed agreement and, therefore, requires ratification, as a whole, by each individual EU member state for things falling within their jurisdiction. Only after all parties have ratified CETA will the ICS mechanism for the resolution of investment disputes become operational.

While we know that ratification by all 28 EU member states may require some time, we are confident that this will happen. Once ratified by Canada, the EU and all of its member states, CETA will provide Canadian and European investors with a predictable framework based on principles of non-discrimination, fairness, and transparency.

Under CETA, we created a permanent tribunal that is responsible for resolving investment disputes. It is made up of 15 members who are appointed by the European Union and Canada for fixed terms. The creation of this tribunal will make it possible to move away from the existing mechanism, which involves special arbitration tribunals. Hearings and any related documents will be completely accessible to the public. These improvements seek to assure citizens that the decisions rendered by the dispute settlement mechanism are fair and objective.

Nothing in CETA prevents governments from regulating in the public interest to protect or promote public health, social services, public education, or the environment. This principle, which is well recognized in international law, is clearly set out in the CETA text.

These improvements to CETA show our commitment to ensuring that this is a progressive agreement. All Canadians can consult the full, final version of the agreement, which has been available since July 2016, in order to better understand that this is a tremendous achievement in progressive trade policy.

To answer specifically the member’s question relating to the circumstances around the ISDS provisions and application, I would like to quote CETA chief negotiator, Steve Verheul, during his testimony to the House of Commons Standing Committee on International Trade, when he stated, “Given the investment dispute resolution process will not be in place until all member states approve, we will not be able to use that mechanism, and neither will the EU.”

Therefore, in the case of the Polish mine scenario, we need not worry.

Elizabeth May:

Mr. Speaker, I want to ask the parliamentary secretary to return to first principles. The whole idea of an investor-state dispute mechanism is to deal with countries that are relatively lawless, the idea that there might be a day when someone seizes power—indeed, we were debating Cuba all day today—and nationalizes the properties and the businesses placed there by other countries over the years.

This is a large agreement involving all industrialized countries, all bound by the rule of law, with no reasonable prospect of such a thing happening. In the European Union, the reason that so many individual states and regions continue to vociferously oppose this, and why it is being challenged in the European Court of Justice, is that the Europeans have never agreed to such a thing before in the European Parliament.

The question is why on earth do we think we need investor protection when dealing with Germany, France, and other countries that are industrialized and responsible, and not likely to seize our assets? This is ambulance chasing at its worst by a clique of global lawyers, done out of greed

David Lametti:

Mr. Speaker, I would like to point out that the European Union has a number of different bilateral and multilateral trade agreements, and ISDS provisions are a standard feature in all of them.

International investment is a key driver of economic growth. It creates more trade and more jobs. The government negotiated a progressive agreement that enhances economic opportunities while ensuring our ability to regulate in the public interest. CETA will deliver benefits for consumers through lower prices and more choice, for workers through more jobs and better jobs, and for businesses through reduced costs. Our government is committed to ensuring that these important benefits for Canadians are realized as soon as possible.

This is a landmark initiative, ensuring our country’s continued prosperity.

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It is my intention to focus on the investor-state provisions within CETA. I want the record to show that the Green Party shares the concerns of many that this will drive up pharmaceutical drug prices for Canadians. We really do need pharmacare and we do not need to give pharmaceutical companies more advantages than they now have in terms of patent protection. We do need to protect the rights of municipal governments to put out local bids for tender, and not take away their ability to have local procurement. There are impacts on various economic sectors in Canada, including the dairy industry, that need to be better examined.

I want to focus on why this agreement remains so controversial that it is not yet a done deal in Europe. I think Canadians have been somewhat bamboozled on this point.

Certainly, the Conservatives have made the case that all the Liberals had to do was open up a gift package and it was all ready to go. That is clearly not the case. Why is the comprehensive economic and trade agreement in the EU so very controversial to this day? It is because this is the first time, the first proposed agreement, in which the European Union will be accepting an investor-state clause. That is why it remains controversial. That is why it is still to be ruled on by the European Court of Justice. The provision within CETA that many European parliamentarians think is not legal is the investor-state provision. That is why the European Court of Justice will be ruling on it. If it rules that it is beyond the scope of the jurisdiction of the European Union to take away the rights of states and give foreign corporations superior rights, that will blow a hole through CETA.

The same thing will be true when this trade agreement goes to the whole European Parliament for a vote sometime between December and February. If it clears the European Parliament, it then goes to the various parliaments. There are 38 national and regional governments that will still have to vote on this, which is a process that could take two to five years.

Therefore, my first point is this. Why the rush to put through Bill C-30? Why are we not having proper consultations across Canada, and proper and lengthy efforts to hear witnesses, as the government of the day has done under the TPP? This is being rushed despite the deal not yet even existing on the European side. Certainly, the European commissioners have accepted it, but it is not a done deal, and that is because the next trade agreement Europe is looking at having is with the United States. If members can imagine the European governments at the local and national level having a problem with the idea that Canadian corporations can come and sue them in these phony courts, they can be sure they would be even more worried about that happening with U.S. corporations.

Therefore, the first reason, and the number one reason, this agreement is controversial in Europe is the investor-state provisions. I want to back up and explain what these are.

In debate today we heard them conflated with dispute resolutions systems. Everyone understands that when we have a trade deal, the two or three countries involved, in this case a large trading block like the EU, may end up having disputes on trade issues. We have had enough softwood lumber disputes between Canada and the U.S. to explain dispute resolution on the commercial aspects of trade quite well. This is not that. This is not a process to resolve disputes over trade.

What are investor-state provisions doing in a trade deal? That is a good question. They should not be there at all. They are provisions that initially came into the trade world, I would say, by stealth. In all of the national debate, in all of the concerns that Canadians expressed, no one talked about chapter 11 of NAFTA. It was basically hidden away. I have to say that I have spoken to the negotiators of NAFTA. Even they did not know how this provision would be used. Chapter 11 of NAFTA, they thought, merely said that if a foreign government expropriated the assets of a corporation, like a scenario in Cuba where Fidel Castro has the Government of Cuba nationalize all U.S. assets, it would then owe that corporation money for the expropriation of assets. Everyone understood that. It is common law internationally. What chapter 11 did was put in some language that appeared benign but turned out to be a disaster for domestic democratic governance. It put in the words “tantamount to…expropriation”.

Therefore, chapter 11 of NAFTA waltzed through without any controversy, and then very clever lawyers got hold of it. This has created a cadre, a term I will use later as well, of global ambulance chasers, lawyers who went out to find corporations.

The lawyers said that when our government passed the rule that we cannot use that toxic gasoline additive, they thought the corporation had a case against the government under this investor-state dispute. Therefore, Canada, under chapter 11 of NAFTA, was sued for getting rid of a gasoline additive. Under chapter 11, there was the Ethyl Corporation case, where we were sued for banning the export of PCB-contaminated waste. AbitibiBowater sued. However, Bilcon is the worst and most recent case. This is a U.S. corporation that opted not to go to Canadian courts to seek a domestic remedy, but went to the secret Chapter 11 tribunal to get a judgment against Canada to overturn a very strong, solid, defensible, reasonable assessment.

There are no trade aspects to any of these cases by the way. These are not trade disputes. These cases are saying that, as a foreign corporation, a domestic decision by democratic governance has cost it money and its expectation of profits, and so it is bringing a case.

Chapter 11 of NAFTA gave rise to a proliferation of bilateral investment treaties. Generally speaking, the larger economic power is doing business in a small developing country, like a Canadian mining company operating overseas, and the international collective of investment treaties has created real hardships on smaller developing countries. The pattern is clear, and it was put forward and documented by a European think tank. It put together a review called Profiting from Injustice. There is a pattern: the bigger economic power is going to win.

The arbitration process, in other words, is neither fair nor neutral. The global ambulance chasers are a small cadre of international lawyers who get paid $1,000 an hour to be an adjudicator or to be a lawyer for a foreign corporation that is suing a domestic government. The larger economic power is going to win. Therefore, if Canada is being sued by the U.S., we lose.

The worst of all of these agreements has to be the Canada-China investment treaty, which Harper brought in and pushed through with a cabinet vote. It was never debated in the House and never voted on in the House, but it will bind Canadian governments until the year 2045, and it is all completely in secret.

We can now look at chapter 11 secret tribunals and the Canada-China secret tribunals. If our yardstick is those regressive anti-democratic trade deals, and we compare them to the European Union’s efforts here with Canada to create an investment court, they are doing everything they can to try to take an inherently anti-democratic system of corporate rule over governments and dress it up to look more democratic, but they have not done the job. It is still an anti-democratic notion at its essence that foreign corporations have the right to sue governments for decisions that have been made with no trade motivation whatsoever but to protect health, safety, and environment within a country.

Why should we agree to these at all?

Earlier in the debate today, I said that CETA creates an investment court. It has adjudicators who are semi-permanent. In other words, they are not being paid for one case and the next day they can go out and be an advocate within the CETA process. The hon. member with whom I was discussing this made that point. I was not able to come back and explain that they can be both a judge in the investment court in the EU and a global ambulance-chasing lawyer on a NAFTA case, or on a Canada-China investment treaty case. They can actually be in the pocket of someone who has hired them, because there are corrupt lawyers who work for companies like Bilcon. These lawyers can be in the pocket of a company like that and then sit as an adjudicator at the investment court between the EU and Canada without having to disclose that they have already been working and are already a lawyer for the very corporation that they would rule over in the case at the investment court in the EU.

These provisions are toxic. As Steven Schreibman, a leading Canadian trade lawyer, said, investor-state agreements are “fundamentally corrosive of democracy”. They have nothing to do with trade.

If Canada wants to get this deal approved in Europe, and if the Liberals want the support of the Green Party in this place, they have to take the investor-state provisions out.

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