Bill C-53 (Historical)

Settlement of International Investment Disputes Act

An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention)

This enactment implements the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, opened for signature in Washington on March 18, 1965.

Settlement of International Investment Disputes Act

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, I would like my colleague from Lévis—Bellechasse to elaborate.

As I mentioned earlier, the Bloc Québécois supports Bill C-53 because it is a good thing to have recourse to the International Centre for Settlement of Investment Disputes when dealing with international treaties between governments or agreements between corporations and foreign governments. We are pleased with this and we will support Bill C-53.

However, there is a problem. Treaties signed by the Government of Canada with other countries are not submitted to this House for review. I would like my colleague for Lévis—Bellechasse to elaborate on this and tell us if he is prepared to undertake that, in future, the Conservative government will not sign an international treaty with any country without submitting it to Parliament for examination. This will avoid potential errors. In fact, 308 individuals are better than 100.

This will allow us to ask all the necessary questions in order to avoid making mistakes and finding ourselves before the International Centre for Settlement of Investment Disputes.

Will my colleague from Lévis—Bellechasse show us the authority he is capable of and assure this House today, on behalf of his party, that, in future, no international treaty will be signed without being submitted for review to this chamber of Parliament?

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Mr. Speaker, I want to thank the hon. member for his question. That is precisely what we are doing in the parliamentary debate today. In order for Bill C-53 to come into force it has to be passed by the House of Commons and then go through the parliamentary process at the Senate, during which time all parliamentarians have the opportunity to speak to the bill. If the hon. member wants to make constructive comments on the bill, I invite him to do so now.

Nearly 153 countries have signed this convention that will allow numerous foreign companies that do business abroad to get better legal assurances that the contracts they sign with other parties in other countries are respected.

In Quebec, this has even more significance because in 2008 there will be a conference of the leading experts on the matter in order to continue to improve the arbitration process. We have to recognize that in many cases this is better than having lengthy, expensive legal disputes in foreign courts.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, as the member knows, only five of the provinces have signed on at this point. The representation thus far has been that there has been an expression of interest on behalf of the provinces that have not considered the matter fully as yet. I wonder if the member could give the House an idea of some sort of timeline or at least rationale for the delay on behalf of the provinces that have not yet signed on.

My second question has to do with the discussion that came up earlier with regard to NAFTA and whether or not the dispute settlement mechanisms, et cetera were adequate. We have had some difficulty. Why are we ratifying another international agreement related to NAFTA? Does this demonstrate that the existing agreement in NAFTA does not work?

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Mr. Speaker, I want to thank the hon. member opposite for his question. Indeed, as he mentioned, some provinces and territories—Ontario, British Columbia, Saskatchewan, Newfoundland and Labrador and Nunavut—as well as the federal government, have already agreed that measures should be taken to pass legislation to implement the convention. The other provinces have the luxury of being designated “constituent subdivisions”—as they are called—and talks are ongoing with the government to ensure that other constituent subdivisions can join the process.

As far as my colleague's second question is concerned, the convention is really a specific arbitration process that affects trade agreements. The convention will complete existing international agreements and—I am sure my colleague will agree—improve them to provide our Canadian companies with a level playing field when they compete in other countries with foreign companies that do business in the host country.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Mr. Speaker, I am honoured to speak in support of Bill C-53, the settlement of international investment disputes act.

The International Convention on the Settlement of Investment Disputes between States and Nationals of Other States, the ICSID convention, is an international instrument sponsored by the World Bank to facilitate and increase the flow of cross-border investment. The convention establishes a mechanism to resolve investment disputes between foreign investors and the host state in which they have made their investment.

The convention entered into force on October 14, 1966. As of January 2007, as the previous speaker mentioned, 143 states had ratified the convention, making it one of the most ratified instruments in the world. The majority of Canada's trading partners are party to this convention.

Once ratified, the convention will provide additional protection to Canadian investors abroad by allowing them to include in the contracts with foreign states the option of arbitration under the convention. In addition, Canadian investors doing business in a country with which Canada has a foreign investment promotion and protection agreement will have recourse to arbitration for violations of the agreement. Becoming a party to this convention will also make Canada a more attractive destination for international investors.

As a small businessman and entrepreneur myself, I recognize that these sorts of multilateral agreements promote stability, the rule of law and confidence in the local economy.

With hugely increased trade with emerging giants such as India, Brazil, China and other countries with governance structures different from our own, it is important that Canada be part of this international convention.

I have travelled extensively to China, India, eastern Europe and elsewhere in Europe. I can see that the developing countries still have a lot of work to do when it comes to honouring those agreements. That is where this is going to be of real importance and an essential tool for Canadians who want to invest in those countries.

This is also true for Canadian investors abroad and for those international investors who choose to invest their money in Canada. I am glad that the government is moving forward with this bill.

However, the government is introducing a bill to promote cross-border investment, while at the same time it is demonstrating its complete lack of competence on this very issue. Let me summarize the government's failure to manage our economy.

There is the betrayal on income trusts. Since April 18, 2007 there have been 16 income trust takeovers, many of which have been bought by large U.S. private equity firms. Private companies will ensure that not only are these businesses no longer paying Canadian taxes, but Canadian investors will no longer receive distributions on which they are taxed.

This is of particular shame in the energy trust sector. One of the most effective investment vehicles in this country was the income trust. Over the past 20 years Canadian energy trusts have been active in buying foreign interests and repatriating foreign capital to Canada. This trend has now been reversed.

Even worse is the impact it has had on ordinary working Canadians. When we talk about ordinary working Canadians we are talking about $35 billion lost, an average of $25,000 per Canadian. My heart goes out to those seniors who are past their prime earning years, and those working families who saw their investments reduced by a staggering 25% overnight. I think people will not make their decisions based on the Conservative leader's word ever again.

The flip-flop on deductibility of interest incurred on loans used to invest overseas is another major example of how lost the Conservative Party is when it comes to managing the economy of our country.

On April 16, 2007 our Liberal Party leader along with our finance critic, the member for Markham—Unionville, called on the Conservatives to reverse these disastrous policies before more Canadian companies and jobs were lost and long term damage was caused to Canada's competitiveness in the global marketplace. The Conservatives pretended that their interest deductibility proposal was about eliminating tax havens but that is false. It was too late for the finance minister to realize it.

This policy is taking away a legitimate tool from Canadian industries that increases their competitiveness on the world stage. The Minister of Finance tried to ignore the calls from the Liberal Party to reverse this disastrous policy but he ignored us. However, he was unable to ignore his unhappy friends on Bay Street who made it clear that the Liberal Party was right and that the Conservatives should reverse the decision.

At least the Minister of Finance is demonstrating some judgment by flip-flopping for the good of the Canadian economy. I suppose the people of Canada have not discovered what the people of Ontario already knew when it comes to the minister's stewardship of the economy. We all remember that it was the Minister of Finance's provincial--

[The Deputy Speaker, Bill Blaikie]

Order. I have listened to the hon. member for some time now and he has made absolutely no reference to the legislation on the floor or the bill that is before the House. I tend to be somewhat lax in these matters, but if the member cannot at least return to the subject at hand from time to time and demonstrate some connection between what he is saying, then I will have to make some kind of ruling as to relevance.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Mr. Speaker, I certainly am honoured that you give me direction. I am getting there. When talking about agreements such as these, the government's credibility, integrity and competency are three factors that are also important to Canadians when they make their investments, which is why I was talking about that.

I can leave aside the Conservatives' mismanagement of the economy and talk about the scrapping of the visitor's tax rebate. It is totally related to these kinds of agreements. I cannot even begin to talk about how many small businesses have been hurt by this change. The tourism industry depended on that rebate. Because my riding of Newton—North Delta is so close to the border and has the closest port in British Columbia to southeast Asia--

[Helena Guergis, Conservative, Simcoe—Grey, ON]

Mr. Speaker, on a point of order, just to follow up on your request for relevance, if the hon. member could refer to foreign investment and Canadian investors abroad just the odd time throughout his speech, it might be helpful.

[The Deputy Speaker, Bill Blaikie]

I think that is probably good advice and I hope the hon. member takes it.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Again, Mr. Speaker, we have to look at this as a whole. We cannot look at it piecemeal. We cannot look at one situation and forget about the others. As I mentioned in regard to the tourist agreement and the rebate on the GST, I am involved with all of that.

When it comes to agreements like this, I note that the Chamber of Commerce from my riding recently travelled to China. It is planning a trip to India. Agreements like this, as I mentioned, are very important to the people of my riding, but on the other hand, we have to make sure of their issues that have to do with foreign trade.

The Pacific gateway project is another example. On one side of it, we are trying to put these documents in place to encourage investors to invest overseas and the overseas investors to invest here, and we have to provide an infrastructure for these kinds of agreements. I can look at the Pacific gateway project in my own riding. The government has to listen to ordinary Canadians, including one of is own members, and I am happy to have him as my constituent. He is also opposed to the way the government is throwing projects like the Pacific gateway through my riding, which is sacrificing the quality of life and the environmental protection of my own constituency.

Coming back to this issue, I personally believe that we should have these agreements in place, because it will be very easy for the investors going out there, not only for today but for many years to come. The Liberal government worked very hard in the last 13 years to restore the trust of Canadians in the economy, both here and overseas. I would say that the Conservatives should not play politics with the prosperity of Canadians when it comes to decision making.

[Helena Guergis, Conservative, Secretary of State (Foreign Affairs and International Trade) (Sport)]

Mr. Speaker, so far in this debate I often have heard these questions. Why now? Why proceed with this after over 40 years? We had the opportunity then and did not, so why now? I want to attempt to answer some of those questions.

I think the hon. member and most members in the House recognize that foreign investment 40 years ago was not what it is today. It has increased substantially. I would also like to point out that in regard to the 143 countries that have signed on to ICSID, there have been 100 disputes, and the majority of those disputes have been just in the last five years. We are seeing a lot of uptake on ICSID and the opportunity that it provides for business and arbitration.

The hon. members in the House, particularly the member for Newton—North Delta, talked a little about business in their communities. I think it would be interesting for him to know that the Canadian Chamber of Commerce and the business community very much want to see this go forward because it is a benefit for them.

Because foreign investment has increased substantially in the last 40 years, and of course the uptake on ICSID and the arbitration process would ensure and confirm it for the House, would he agree that this is something Canada should be going forward with at this stage?

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Mr. Speaker, I am in support of the bill because this is the type of decision we have to make. The secretary of state asks why now, after over 40 years. The ICSID convention was negotiated in the 1960s prior to the general inclusion of federal state clauses, provisions commonly found in international treaties that allow a state a position of ratifying a given convention in respect of some of its sub-entities.

Globalization is a reality as well. We are going through globalization today. Demographics play a key role. Canada being the most diverse country in terms of demographics, we have opportunities to invest overseas. I am very pleased to see that five of the provinces and territories have already ratified this and that the others remaining want to come to the table to make it easier for Canadians to compete in the global market today.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, my question for the Liberal member is similar to the one I asked the Conservative members. The Bloc Québécois supports the bill concerning the International Centre for Settlement of Investment Disputes.

Does my colleague agree that it is good to have a centre that will resolve disputes and act as a tribunal, but that it would be even better for international treaties to be subject to a vote in Parliament?

Earlier, I put the question to two Conservative members, and they were clearly avoiding answering the question. They did not want to commit to this in the House.

Today we will vote on this bill in order to use the convention and to be able to call on ICSID. But signed treaties should first be subject to a vote in Parliament. Does my colleague agree with me on this?

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Mr. Speaker, we have this convention right here in the front of the House. We are debating it and all members of Parliament are supporting it. My Liberal colleagues and I are supporting this convention. These are the types of agreements that, once put in place, are good for years to come.

As we said earlier, decisions made by arbitration under a convention like this are not even prone to be judged by other countries, because the decisions are final. These agreements are final and they are pretty solid. We probably will see this working for many years to come.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I thank the member for his efforts to bring some clarity to the debate on this bill.

Ostensibly it has to do with establishing an agreement that would provide mutually agreeable arrangements for arbitration where there are disputes. The member has made a valiant effort to paint a picture that shows this is not a simple solution to enhancing and promoting Canadian competitiveness and our ability to have bilateral investment with our trading partners, et cetera.

I wonder if the member would care to summarize the importance of having our fiscal house in order, of having stable rules, and of government's responsibility on key issues relating to investment that have related impacts on the quality of our relationships with foreign countries in terms of investment.