House of Commons Hansard #154 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was icsid.

Topics

Standing Committee on Official Languages
Privilege
Oral Questions

3:50 p.m.

Liberal

The Speaker Peter Milliken

There cannot be many more points on this one that I have not heard already. I will hear members very briefly but if it is repetitious, I will cut the members off. I warn them of that because I feel I have heard the arguments on this matter now. The hon. member for Laval—Les Îles.

Standing Committee on Official Languages
Privilege
Oral Questions

3:50 p.m.

Liberal

Raymonde Folco Laval—Les Îles, QC

Mr. Speaker, I would like to offer some clarification that is at the source of this debate; specifically, why we asked the chair of the Standing Committee on Official Languages to resign.

It was a majority decision. The three opposition parties agreed to do it. I must say that it is rare for the three opposition parties to agree, but in this case, they did. The chair of the Standing Committee on Official Languages cancelled the meeting last Tuesday without giving any reason or prior notice to the members. We found out exactly two minutes before 9 o’clock, when we should have been starting the meeting. He also cancelled the following meeting, which was scheduled for last Thursday. It is my understanding that only reason we had a meeting this morning is that I was able to put forward a motion to have a meeting.

We asked the chair to resign because he did not have the confidence of the members of the committee. The members of the committee elected that chair because the members form a unit and they work together, as a team. That means that the work of the committee must be done together. What happened is that the chair made a decision last Tuesday without consulting the members of the committee and without advising them. The chair is elected by the members and is accountable to the members. In my view, what happens in Parliament—and I include the House and the committees of the House--must, at all times, be democratic. I apologize for the cliché, but the eyes of the nation are upon us. What happens here must be as democratic as possible.

On one hand, the chair first decided to cancel two meetings without informing the members; without giving them any reason for the cancellation. On the other hand, this morning’s meeting was divided in two; there was a change in the agenda for the second part. It was cancelled once again without informing the members and without asking for their views.

I believe this clarification was important. It is not because we wanted to take down the chair. It was not because we were angry over anything; it is because, in our opinion, the partisan strategies of the chair could not be considered acceptable in a committee that calls itself democratic

Standing Committee on Official Languages
Privilege
Oral Questions

3:55 p.m.

Bloc

Michel Guimond Montmorency—Charlevoix—Haute-Côte-Nord, QC

Mr. Speaker, I want to mention a point that has not yet been raised. I am simply reacting to the comments made earlier by the member for Regina—Lumsden—Lake Centre, who seemed upset at the partisan nature of this place.

I do not know whether the hon. member is aware of that, but this is not a bridge club: this is the House of Commons. If the hon. member is not partisan, then for heaven's sake he should sit as an independent member, or else hold his meetings elsewhere. Politics is the essence of our work here. It is partisan work by definition. When I rise on behalf of my party, I do not want to adversely affect it, so my remarks are partisan by nature.

I will conclude by saying that we should not forget that the fundamental issue was that we were supposed to hear witnesses on the court challenges program, which the government abolished. We wanted to know what ordinary citizens thought of that decision. Abolishing the court challenges program was a partisan decision. That is why the committee's partisan members wanted to hear these witnesses.

Standing Committee on Official Languages
Privilege
Oral Questions

3:55 p.m.

Liberal

Mauril Bélanger Ottawa—Vanier, ON

Mr. Speaker, I would like to add a new element, in reaction to the comments of the member for Regina—Lumsden—Lake Centre, who said that there seems to be an endless number of such motions. He mentioned two.

I personally sat on two committees of this Parliament. The first one is the Standing Committee on Transport, Infrastructure and Communities—on which I am still sitting—chaired by the member for Brandon—Souris, in whom I have total confidence. I also sat on the Standing Committee on Canadian Heritage, chaired by the member for Perth—Wellington. Incidentally, this is the committee that reviewed the issue of the court challenges program. Again, I have full confidence in this member as chair of that committee.

Therefore, the government should not say that the official opposition is systematically opposed to all committee chairs, because that is not the case.

Standing Committee on Official Languages
Privilege
Oral Questions

3:55 p.m.

Liberal

The Speaker Peter Milliken

I believe I have heard enough about this point. I see, however, that the hon. member for Beauport—Limoilou wants to speak.

Standing Committee on Official Languages
Privilege
Oral Questions

3:55 p.m.

Beauport—Limoilou
Québec

Conservative

Sylvie Boucher Parliamentary Secretary to the Prime Minister and Minister for la Francophonie and Official Languages

Mr. Speaker, we are talking about democracy here. I hope that as a Conservative, I have the right to have confidence in my chair and I also have the right to vote as I wish.

Standing Committee on Official Languages
Privilege
Oral Questions

3:55 p.m.

An hon. member

Yes, that's right.

Standing Committee on Official Languages
Privilege
Oral Questions

3:55 p.m.

Liberal

The Speaker Peter Milliken

I have heard enough about this point.

I will take the matter under advisement and come back to the House in due course with a ruling on this point.

The House resumed consideration of the motion that Bill C-53, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention), be read the second time and referred to a committee.

Settlement of International Investment Disputes Act
Government Orders

3:55 p.m.

NDP

Charlie Angus Timmins—James Bay, ON

Mr. Speaker, I am pleased to rise to speak to Bill C-53, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention).

One of my colleagues from the Liberal Party in the previous intervention talked about the lack of confidence in the chair and said that the eyes of the nation are upon us. I certainly believe that is the situation in the House.

People watching back home must have been wondering about the cluster of Reform Party members in the previous debate licking their wounds in outraged indignation. It reminded me of when I was a kid and Gilles “The Fish” Poisson once lost a Texas cage match to “Killer” Kowalski and he talked about how he had been hard done by.

As serious as the issues are, they are sometimes somewhat surreal. I think people back home wonder exactly what we are debating here because we seem to be in a bubble sometimes, separated from the reality of working people and their workplace.

I want to speak to this bill in terms of concrete examples. I am going to focus specifically on how a bill like this would be enacted. It is all very well to talk about the need for an international convention on the settlement of investment disputes because these happen all over the place and we need to set some high standards.

In recent years, and particularly with the chapter 11 case with NAFTA, we have seen some very disturbing trends emerging. The New Democratic Party members will certainly be voting against this bill because we have concerns about the lack of transparency, the lack of accessibility, and the lack of accountability.

When we talk about protecting investments overseas and in Canada, we are talking about how it needs to be based on the rule of law. We certainly believe that law is a guiding principle, but there are a number of principles about law that have to be applied. A number of the dispute mechanisms seem to be basically circumventing some of the basic principles of law.

If there were to be a dispute in court, the interested parties should be able to speak to it. That is a fundamental principle of law. We do not see that, for example, in chapter 11 of NAFTA. We did not see that in what was laid out in the multi-lateral investment agreement that came out in 1997. There needs to be a transparency of judgments, and yet with this ICSID bill that is before us there is no obligation to even publish the evidence and the awards.

One of the most fundamental issues in terms of legal jurisprudence is the need for transparency and full disclosure of evidence, so that evidence can be weighed publicly, not behind closed doors. There is a fundamental difference between being judged by a jury of peers in one's community and being judged by a couple of buddies in a backroom.

I am going to speak about a specific case and how I see it unfolding under chapter 11 because I believe it resonates the application for applying the principles on a larger scale. That case is the $350 million claim against the Government of Canada by one Vito G. Gallo. I have his request for arbitration under chapter 11 of the free trade agreement. I have read Mr. Gallo's claim from start to finish and it is very interesting. I know most of the case fairly well.

He says he is the sole owner of 1532382 Ontario Inc., a company incorporated under the laws of the province of Ontario. I would agree that this company is incorporated in Ontario. I would also agree with him that the Adams Mine, a former iron ore mine, is located 10 kilometres southeast of the town of Kirkland Lake. That is in my riding. Other than that I would question most of the evidence that he has brought forward to the arbitration dispute panel.

That gets back to the issue under Bill C-53 about the need to fully disclose evidence. For example, in Mr. Gallo's claim, he states that he owns and controls the enterprise, meaning the Adams Mine as a possible site for landfill.

I find that very interesting. We have to go back a bit into the history of this site. In 1990 Dofasco shut down the Adams Mine. It was an iron ore operation in my riding which lost a number of good paying jobs. The issue then became its possible use as a landfill, but the landfill was fairly challenged because we had 360 million litres of groundwater flowing through it every year.

At that time the owners were Notre Development, a small company out of North Bay, and the City of Toronto, which was a partner. The city of Toronto paid for most of the initial costs. It was the taxpayers in Toronto, not investors, who paid for the studies.

The studies were based on an unproven concept called hydraulic containment. It stated that 360 million litres of groundwater, which people in my riding contended fed the entire agricultural belt in the valley below, flowed through the pits every year. The theory was that pipes would be installed and for 1,000 years the groundwater of northern Ontario would be used to wash 20 years worth of garbage. It was seen then as somewhat of a cockamamie plan, but the city of Toronto paid for the studies to get this to ground level.

In 1997 it went before an environmental assessment board in Ontario at a time when Premier Mike Harris, who was considered a very close supporter of the dump, changed the environmental assessment act in Ontario, and changed it dramatically.

We suddenly had a scoped EA for what would be the single largest dump project in Canadian and possibly North American history. It was subject to a very narrowly scoped EA, which looked at only the question of whether the computer models supplied by the proponent were feasible. At that time all the other issues of groundwater contamination and the potential threat in the surrounding environment were ignored.

It was actually passed at that time in a very narrowly focused area, but there were issues with 2 of the 12 or 13 drill holes. There were two serious questions about whether those proved the theory of this dump or they did not. I am explaining this just as background so everyone has the full sense of what I am talking about in terms of this multilateral investment agreement that we are looking at now.

The city of Toronto stepped back and decided it was no longer going to be a proponent. Therefore, it was no longer the key proponent, but it was possibly a customer for this site. Throughout this, it was an Ontario company bidding on a municipal contract. There was no discussion at any point that this was in any way an international project.

In 2000 the city of Toronto walked away from this proposal because of the dangerous issues of liability. Nobody wanted to accept the liability for having to guarantee that pumps on a theoretically unproven site could run for 1,000 years. It also stepped aside because it was probably the largest civil disobedience action in Ontario history at that point.

The federal and provincial governments were very cognizant of the fact that the Algonquin nation had brought forward a very serious prima facie case for unextinguished aboriginal title at that site. There were numerous questions, as well as the potential groundwater threat from this unproven site.

The city of Toronto was not willing to accept the liability. Canadian Waste Services at that time, which was the new partner, also walked away, so the site was left without a customer. If we check the records for the last seven years, regardless of what happened with Michigan, the city of Toronto said time and time again, “We will never go back to this site. No matter what, we will never go back there”. It was a site without a customer.

Then in 2002-03 a new company was formed, which was 1532382 Ontario Inc. It set itself up as the new proponent. What is this company? We do not really know.

I have a corporation profile report. What is the jurisdiction for 1532382 Ontario Inc.? It is Ontario. What is the former jurisdiction? It is not applicable. The corporation type is an Ontario business corporation. What is its registered address? It is Suite 101, Don Mills, Ontario. Its mailing address is 225 Duncan Mill Road, Suite 101, Don Mills, Ontario. If you are not seeing much of an international investor angle here, you are like me, Mr. Speaker.

Page 2 of this very paltry corporate report says that the administrator is Brent W. Swanick. His address is 104 Yorkminster Road, North York, Ontario. The first director is not applicable. The officer type is president. The resident is Canadian.

We do not see anything on this paltry two page report of any connection as to who is behind this Ontario numbered company, a company that picked up a site that was derelict, that had no customers and no possibility of a customer. Then it decided to go into business to bid on a municipal contract. We have an Ontario numbered company bidding under the province of Ontario for a municipal contract. The only contract it could get from the city of Toronto was that it would not deal with the company.

The deal was contingent upon two key issues, and they are raised in NAFTA chapter 11 challenge. First was the fact that it applied for a take water permit in 2003. The second issue was that it applied through the MNR to purchase 2,000 acres of Crown land at what we thought was the outrageously low price of $22 an acre. In fact, I helped initiate a local bidding campaign that said we would spend $5 to $10 more an acre and we would outbid it. There is a fundamental principle. If we are to dispose of Crown land assets in the province of Ontario, we have to go through due diligence and bring this out into the public. We cannot simply do this behind the scenes.

The other issue with this 2,000 acres was it was subject to a land claim issue with the Algonquin nation. It came forward very clearly with its prima facie evidence that said that there had been no consultation with the nation. It said that it had be consulted. Therefore, it was an obligation of the Ontario government to hold up the disposal of the Crown land until that was addressed.

The other issue that was very pertinent at the time was whether the take water permit at the site should have been allowed. On August 12, 2003, Dr. Ken Howard, who has been recognized as the key hydrogeologist in the province of Ontario, was brought in to review the information. Dr. Ken Howard was also brought in to deal with Walkerton and was the key provincial guy for bringing forward all the recommendations for provincial legislation out of the Walkerton report.

He studied the Adams Mine environmental assessment process. He said that the decision to issue the certificate at that site specifically was based on the results of drill holes 98-1 and 98-2. He concluded that the drill hole results were “seriously deficient” and that the director of approvals branch approved the dump on evidence that “had virtually no scientific merit” and were “effectively worthless”.

We will not find that in my mysterious friend Vito Gallo's submission. Neither will we find any of the issues before the NAFTA tribunal about this first nations land issue or the fact that there was widespread opposition to this plan or the fact that there was no customer. However, that might not matter. Under chapter 11, a mysterious numbered company is going before a tribunal and saying it wants a dispute mechanism where all this evidence does not come through and the public interest does not get to be heard.

The other question I find really interesting in this is I have never heard of Vito Gallo. Now maybe that is not an uncommon thing. There are lots of people of whom have not heard, but I have heard of many of the people who have been involved in the Adams Mine over the years because I have paid very close attention to it.

For example, I was very aware of the Cortellucci group of companies out of southern Ontario. In the May 9, 2003 issue of the Toronto Star they were identified as key owners of this Adams Mine proposal. In fact, Mr. Mario Cortellucci has given serious amounts of money through clan Cortellucci to the Conservative government. However, I am not bringing that up here because I am not being partisan. I am just pointing that out as a side issue. When Mr. Cortellucci was asked by the Toronto Star if he was in fact the owner of the Adams Mine at that point, he said he was just one of a dozen or so investors.

Now we have a situation where we have this numbered company. We do not know what it is except we know it is an Ontario company run by an Ontario administrator. Maybe we have no I.D. to prove this, but this man is purporting to be an American who has international rights to come in because he has been circumvented in all his other points. There are questions about who else is involved in this.

We know the Cortellucci Group of Companies was identified. In 2003 a lawsuit was launched by Canada Waste Services over the ownership of the site. It never mentioned Vito Gallo, but it mentioned the Notre Development Corporation and the Cortellucci Group of Companies. In fact, it referred to the Cortellucci agreement.

We would think it would be incumbent upon the Government of Canada, before we fork out $350 million to Vito, my friend, to find out who is behind this numbered company.

We do not know if any of the due diligence has been done. All we know is this numbered company tried to sue the Ontario government in 2003-04, after it was shut down when the provincial Liberal government revoked the permit based on a number of key issues. The first was new evidence. The second was as a result of the Walkerton inquiry. It was the idea that in Ontario in the 21st century we did not use groundwater to wash garbage. It is kind of an odious thought. Ontario decided that is not even a 20th century idea and it is not even a 19th century idea. We do not use groundwater to wash garbage. Therefore, it suspended the permit, not just for that site, but for any site in Ontario on the bases that we do not use a lake full of fresh groundwater in which to throw our garbage.

At that point this numbered company, 1532382 Ontario Inc., sued the Ontario government, which is fair. They are investors. They took their case of $300 million and they went against the Ontario government. However, we did not see that case go anywhere. Nothing seemed to happen.

We know there were some negotiations with some of the investors about whether to accept a payout. Then, lo and behold, just a few months ago, Vito G. Gallo said that he owned the mine, that he was the direct beneficiary of all the possible benefits that should have accrued, going back to when Toronto was paying for the cost.

We had no evidence to know at what point Vito Gallo stepped into the Adams Mine. We do not know if Vito Gallo is the only investor. We do not know if Vito Gallo is one of a hundred investors, one of ten investors, or one of five investors. We do know this company that he says he owned as an American investor is an Ontario numbered company. It was an Ontario numbered company bidding under provincial rules for a municipal waste contract in the province of Ontario. There was nothing international about this whatsoever. Yet he is now before a NAFTA tribunal, asking for $350 million, and the Canadian taxpayers will not have our lawyers there bringing forward witnesses.

One would think that if we are going to talk about international trade law that has jurisprudence on its side and accountability and fairness, then fairness would include the right of a domestic government to bring forward legislation that is fair. If it does affect business, there is a process. However, the government might have compelling reasons, such as Dr. Howard's evidence, to act on this.

Another doctor I would like to mention is Dr. Larry Jensen. He is the provincial geologist for the Kirkland Lake region. He spent 40 years studying the faults of the Adams Mine.

I found it absolutely strange when I was at the environmental assessment hearing and I looked at the maps of the experts which showed all the fault lines. They were very vague. There was hardly anything there. In fact, they were not Dr. Jensen's maps; they were maps from the 1950s.

I will conclude on this. Dr. Larry Jensen was a the provincial geologist in the Kirkland Lake region for 40 years. He studied the Adams Mine every day. He said that the Adams Mine proposal was,

—a disaster for the not too distant future, perhaps not for the residents of Kirkland Lake itself, but for all those people and the wild life to the south and southeast in the Timiskaming region and beyond, as far as to the mouth of the Ottawa River—an area hundreds of times larger than Toronto itself.

When we have evidence like that, jurisprudence says all the evidence has to be brought out. The first piece of evidence that has to be brought out in any international dispute mechanism is who are these people behind this numbered company who are going after the Canadian taxpayer for a hit of $350 million?

Until we see how the new international convention protection that ensures these kind of operations cannot put the hit on Canadian law will be merged with investor relations, we will not support any bill like this. We are doing our job in this House and in our provincial legislation to protect the public interest.

Settlement of International Investment Disputes Act
Government Orders

4:20 p.m.

Bloc

Serge Cardin Sherbrooke, QC

Mr. Speaker, the NDP member told us he would vote against Bill C-53 concerning the ICSID. In the end, it is just a tribunal. In my opinion, it is not necessarily the tribunal that presents a problem, but the poor investment protection treaties Canada negotiates and signs without the House's approval.

Consequently, does he not believe that this convention, which could be signed with the adoption of Bill C-53, could protect Canadian investments abroad and also protect Canada and other countries against investments? As I said, the centre is just a tribunal. The treaties Canada signs are not necessarily the best and should have tougher conditions with more bite. Because if necessary, the tribunal could put things right again.

Settlement of International Investment Disputes Act
Government Orders

4:20 p.m.

NDP

Charlie Angus Timmins—James Bay, ON

Mr. Speaker, the issue for us is the tribunal process is not substantive in itself, but it has the potential, and I think a very bad potential, to lock in bad financial agreements and make them worse. That is why we oppose this. The example we use is NAFTA. We believe that NAFTA was put in place to give us a rules based sense of trade. If we are to have international trade, there has to be rules based trade.

We have seen how chapter 11 has been used and how it takes away the legitimate ability of a government to bring forth evidence as to why it has made decisions. If it is being used to simply penalize one company and to go after it, fair enough. Under the rule of law the evidence could be brought forward to substantiate that. However, what was to be the multilateral investment agreement was very similar to chapter 11. We believe the tribunal process is a continuation of basically a bad principle of reporting investor rights above the notion that investor rights are part of a larger common framework of rights in any functioning democracy.

Settlement of International Investment Disputes Act
Government Orders

4:20 p.m.

NDP

Pat Martin Winnipeg Centre, MB

Mr. Speaker, the story we have heard from the member for Timmins—James Bay is one of the most incredible tales I have ever heard in my life. I was spellbound by it. It is like an epic saga. My colleague has a background in the arts. I think he should write an epic poem about the saga of the Adams mine along the lines Beowulf or something like that. This is unbelievable.

I want to ask my colleague if I understood this correctly, because it is almost an unbelievable story. Does the member mean to say that we have a Canadian businessman, given investor state status through NAFTA, suing the nation state of Canada, or Ontario, for lost opportunity because he cannot do what he wants to do in this mine that he says he owns? Is that how convoluted our international trade agreements are?

First, do I understand that he is not even an American, that he is not an out of country businessman who has lost opportunity in this country, but rather a Canadian who somehow calls himself an American and says he has been inconvenienced and has lost $350 million worth of lost opportunity? Is that how twisted this story really is?

Settlement of International Investment Disputes Act
Government Orders

4:20 p.m.

NDP

Charlie Angus Timmins—James Bay, ON

Mr. Speaker, just to clarify this, Vito Gallo, the mysterious Vito, is an American as far as we know, but we do not know anything about him. We do not know any details.

He is claiming to be the sole owner of a derelict site through a numbered company registered in Ontario. There is nothing about this company that shows any kind of American investments at all. In fact, there is only one investment I have seen that it has made, other than apparently buying into the Adams Mine, which is that the 1532382 company gave political donations to the Conservative leadership in Ontario through this numbered company that is now being claimed as an American investment.

So there is certainly the question of what it was doing giving political donations through this group of companies, but through this dispute mechanism how do we even know who the owners are? There is no obligation under international trade to reveal this to the public or to bring forward evidence.

Therefore, we have a situation where there could be one, two or a dozen investors. We do not know if he is a small investor or the sole investor. He is claiming to be the sole investor right now. Again, the Toronto Star of May 9, 2003, said that Mario Cortellucci from Vaughan township was one of the key owners of that site.

We certainly think that basic jurisprudence would call for a forensic audit of this company to be made public before we would agree to submit to any kind of international dispute tribunal.

There is one final point on this question. Under this consent to arbitration, the plaintiff gets to ask for his own arbiter. He has asked for Professor Jean-Gabriel Castel from Orangeville, Ontario, so I find this situation even stranger. We do not even have a full court of law with full evidence so we do not know much. We know there is a numbered company in Ontario that is asking to have one out of the two or one out of the three arbiters picked by the company, this for $350 million of taxpayers' money.

It is an incredible tale. As for the government sitting back and allowing that to happen, when we think of this money that could be spent on Kelowna or on public transit but that might be going out the window and through a back door process under NAFTA to a donor to the Conservative Party, it is an incredible story. I agree. It is an incredible story.

Settlement of International Investment Disputes Act
Government Orders

4:25 p.m.

Liberal

Paul Szabo Mississauga South, ON

Mr. Speaker, I found the specific case very interesting, but the member has raised a point about chapter 11. I guess the rhetorical question is whether or not there is any confidence that the NAFTA dispute resolution mechanism works.

I do note that the ICSID option is already available and exists under NAFTA, but it is only available where the state making the investment and the state in which the investment is located both are parties to ICSID and to NAFTA. The only NAFTA partner that is a member of ICSID right now happens to be the United States, so that is not applicable.

Should Canada become a member, even under NAFTA the ICSID option would then be available, which is kind of interesting, because it basically provides that in countries where Canadian investors might lack confidence in the court system, which is part of the story the member has raised, there is ICSID's prohibition on court review, which, with its links to the World Bank as well, actually would appear to significantly improve the prospects of any arbitral award to be enforced.

I am not sure how the member feels about that, but it would appear that it means options for Canada.