Bill C-9 (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

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, I was very clear: we support Bill C-9. This bill has nothing to do with all the recriminations between the NDP and me. We must not mix apples and oranges. Canada can join a dispute resolution tribunal. That is what Bill C-9 is about. All the problems with bad agreements and NAFTA chapter 11 have nothing to do with Bill C-9. We are doing what 155 or 156 other countries who belong to this dispute resolution tribunal have done. Are we making a great improvement in our situation? I do not know, but it is still not a bad thing. That is why we support this bill.

All the other recriminations show that democracy is being denied when it comes to international agreements. This is not at all the same thing, and that is why we support this bill. That does not mean we believe that everything the government is doing with respect to international agreements is perfect.

On the contrary, I showed at the end of my speech that it is time to raise this issue again and introduce a bill ensuring that international treaties are voted on here in this House.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, it is a pleasure to see you and the other members again. Now, the question is how much longer we will be together here for this session. Because of the Conservative government's insensitivity towards the crisis in the manufacturing and forestry industries, which we will debate during the late show this evening, as you said, Quebeckers are becoming more and more outraged with this government. Obviously, when the time comes to make important decisions, we will be here to defend the interests of Quebec, as we always have.

The Bloc Québécois supports passing Bill C-9. Passing this bill will finally enable Canada to ratify the convention on the settlement of investment disputes between states and nationals of other states, and also to become a member of the International Centre for the Settlement of Investment Disputes, or ICSID.

Bill C-9 integrates the requirements of the international convention in the laws of a country, in particular to ensure that arbitral awards are respected and to provide for the immunities required by the centre and its staff. ICSID is responsible for arbitrating disputes between States and foreign investors. There may be two types of disputes: disputes related to compliance with bilateral foreign investment protection agreements and disputes related to agreements between governments and foreign investors. The Government of Quebec regularly signs the latter type of agreement when eliciting foreign investment with the promise, for example, of providing electricity at an agreed price.

Canada's membership will not have any impact on the provinces, except that they too may have recourse to the ICSID when they conclude agreements with investors. The only thing that Canada's membership in the centre will change is that Canada will be able to intervene in negotiations to amend the convention or the rules of the centre and it will enjoy the assurance of being able to join in the appointment of arbitration tribunals.

Ultimately, the ICSID is a tribunal. The problem is not the tribunal or membership in the tribunal. The NDP member asked earlier how the Bloc Québécois could support Bill C-9. Fifty-six countries are now part of that agreement. That is not the problem. Rather, the problem lies in the poor investment protection treaties that Canada concludes and continues to conclude despite the bad examples we have seen, particularly—and I will come back to this later in my speech—concerning chapter 11 of NAFTA.

The Bloc Québécois supports the conclusion of investment protection agreements, as long as they are good agreements. It is completely natural for investors, before making an investment, to try and make sure they will not be divested of their property or that they will not become victims of discrimination. This is the sort of situation that foreign investment protection agreements are meant to cover.

In most cases, investors themselves can submit disputes to an international tribunal, but only once they have obtained the state's consent. However, in the investment protection agreements they have signed, only two countries, Canada and—guess which other country—our friend, the United States, systematically give investors the right to apply directly to the international tribunals. That is a problem, I would even call it a deviation from the norm. By allowing a company to operate outside government control, it is being given the status of a subject of international law, a status that ordinarily belongs only to governments or states.

The agreements that Canada signs contain a number of similar deviations that give multinationals rights they should not have and that limit the power of the state to legislate and take action for the common good. I was speaking about chapter 11 of NAFTA, which unfortunately is now well known. This chapter of NAFTA on investments provides that a dispute can go to ICSID. That chapter is a bad agreement in several respects. I will give you some examples.

The definition of expropriation is so vague that the slightest government action, other than a general tax provision, can be challenged by a foreign investor if it reduces its profits from its investment. Take, for example, the plan to implement the Kyoto accord, which would heavily penalize big polluters and oil companies and could be challenged under chapter 11 and result in the government paying compensation. The Alberta oil companies are in fact mainly owned by American interests. Chapter 11 opens the door to the most abusive proceedings.

Furthermore, the definition of investor is itself so broad that it includes any shareholder.

Therefore anyone could take the state to court and attempt to obtain compensation for a government measure that allegedly reduced a company's profits.

As for the definition of investment, it too is so broad that it even includes the future profits that an investor hopes to earn, even though this is only a projection. In the case of expropriation, not only does the state find itself forced to pay fair market value, but it must also include revenues that the investor expects to earn in future. It would no longer be possible to nationalize electricity, as Quebec did in the 1960s.

We can look at situations that have occurred over the years. For example, SunBelt, a corporation with a Canadian shareholder and a Californian shareholder, closed its doors when the Government of British Columbia withdrew the right it had granted for the bulk export of water. The Canadian shareholder, based on Canadian laws, received compensation equivalent to the value of his investment, or $300,000. The American shareholder, based on NAFTA chapter 11, included potential future revenue from the sale of water in its claim: $100 million. We do not know the full story, because the case was settled out of court for an undisclosed amount, but we can see just where abuse can lead.

As an aside, that is what prompted the Bloc Québécois to present a motion to ensure that, in light of NAFTA, water is not considered a commodity and that it cannot be sold in bulk, as the Americans would like. We do not want to lose this great wealth of Quebec and we do not want this to become a shameless object of trade.

Given the amounts of money at issue, chapter 11 discourages any governmental measure, when it comes to the environment in particular, that would decrease the profits of a foreign owned company.

The dispute settlement mechanism currently allows companies to turn directly to international tribunals to seek compensation without the need for the state's consent. I was talking about that earlier. This is a serious problem. A multinational could, on its own authority, be behind a trade dispute between two countries. That could happen the way things stand now. It is that type of absurd situation that chapter 11 of NAFTA on investment allows.

The government must enter quickly into discussions with its U.S. and Mexican counterparts to amend chapter 11 of NAFTA. The Bloc Québécois has been calling for that for a very long time now. We have seen the abuses that have resulted from this. Instead, the government is adding more agreements and, in those agreements, we find a carbon copy of chapter 11 of NAFTA.

In addition to chapter 11 of NAFTA and despite the fact that everyone has criticized its abusive nature, the government has concluded no less than 16 other bilateral foreign investment protection agreements that, as I was saying, are carbon copies of chapter 11 of NAFTA. All these foreign investment protection agreements are bad and should be renegotiated.

The Bloc Québécois is calling for more transparency, more democracy. The government must submit to the House all international treaties and agreements before ratifying them. That is another problem that should be discussed more broadly here, in this House. We must also ensure that the public realizes that many international agreements can be concluded in secret.

For example, earlier this year, the government announced in a news release that it had signed a new investment protection agreement with Peru. That was how we found out about the agreement. Parliamentarians and the general public knew nothing about the agreement until they read the news release. Moreover, not many members of the media gave this story a very high profile. Parliament was never informed, nor did Parliament approve it. This is totally undemocratic. The strange thing is that we have before us a government that boasts about keeping its promises. It says that it follows through on the promises it makes. I would like to remind members of this House, the general public, and especially the government that that is not true. The government does not always do as it says it will. It does not always keep its promises. The Conservatives' election platform during the last campaign was very clear. The Conservatives promised to submit for approval all international treaties and agreements before signing them. That is not what has been happening. Since the Conservatives came to power, Canada has signed no fewer than 24 international treaties.

With the exception of one single amendment to the NATO treaty that was the subject of a last-minute debate and vote here, none of these treaties were brought before the House. So much for that promise, which the government casually dismissed.

These days, international agreements can have as great an impact on our lives as laws. Nothing can possibly justify the secretive, unilateral ratification of these agreements by this government or any government without the participation of the representatives of the people.

People do not send us here for nothing. We often have to explain what the federal government is up to, a government that, it must be said, seems more remote than municipal governments or the National Assembly and other provincial governments. We explain what we do, the bills we pass and so on.

People understand that international trade and foreign affairs fall largely under the jurisdiction of the federal government. It is our job to take care of such things here. Yet, as I just explained, the government has been signing most of its international agreements without giving us a chance to vote on them.

As usual, we Bloc Québécois members are taking action. Some claim that we merely talk, but the fact is that we also act. We have introduced bills to restore democracy and ensure the respect of Quebec and provincial jurisdictions in international treaties. I will get back to this later on. We presented a bill on this issue on three different occasions.

Today, we can see that the Conservatives' word is not worth much. It is not worth anything, particularly in this area. This is why the Bloc Québécois will raise this issue again and will bring forward proposals to restore democracy in the conclusion of international treaties.

We want the government to be required to present to the House all international treaties and agreements it has signed, before ratifying them; to publish all international agreements by which it is bound; to allow the House to vote on and approve such agreements, following an analysis by a special committee tasked with examining international agreements and major treaties, before the government may ratify them; and, of course, to respect Quebec and provincial jurisdictions in the entire process of concluding treaties, that is at the negotiation, signing and ratification stages.

While the provinces are usually informed of negotiations relating to trade agreements, in reality they have little say in the process, except on rare occasions; they are completely excluded from the decision-making process.

Now, democracy is totally absent when it comes to international treaties. There is no complete list of treaties. The government releases them sporadically. We do not know when it will release them, or even if it will release all of them, because it is not bound to do so. Even the Department of Foreign Affairs' treaty branch does not have a list or report that we could consult to find out with whom, when and why the government signed this or that treaty.

Nor is the government required to table these documents in the House. In fact, it is not even required to inform the House or the public when it signs or ratifies treaties.

The House does not approve them. As we mentioned earlier, the government can sign and ratify treaties, it can do anything it wants without consulting the public's representatives. At best, if ratification of a treaty requires changes to the legislation, Parliament will be asked to vote on such legislation. Incidentally, since 2002, in Quebec, the National Assembly must vote on these measures.

Since the House is in no way involved in the process for concluding treaties, it cannot consult the public. This is really pushing the denial of democracy, especially since, as some colleagues mentioned, these types of treaties affect everyone in their everyday lives.

The government is not required to consult the provinces either. The government prevents the provinces from acting internationally by controlling their international relations and not permitting them to conclude agreements that are considered treaties.

This is what is going on now. What is ironic is that Canada is less democratic than it was in the 1920s. In fact, in June 1926, Prime Minister King moved a motion, which was unanimously adopted by the House of Commons, which stated:

—before Her Majesty's Canadian ministers recommend ratification of a treaty or convention involving Canada...Canada's approval must be obtained—

That was 1926. This is 2008.

In 1941, Mackenzie King reiterated his commitment to this formula. To quote him once again:

With the exception of treaties of lesser importance or in cases of extreme urgency, the Senate and the House of Commons are invited to approve treaties, conventions and formal agreements before ratification by or on behalf of Canada—

Over the years, we have resorted less and less to approval by resolution. For example, during the cold war, the practice of obtaining Parliament's approval for signing treaties or for military intervention abroad was definitely abandoned. We even stopped tabling treaties in Parliament, with the exception of the Kyoto accord, which is more recent. No treaty has been approved by resolution since the 1966 Auto Pact, more than 40 years ago.

In the case of Kyoto, the government is refusing to respect what was voted in Parliament. I am laughing and sometimes we laugh about things that are not funny. That is the case here. It is the irony of the situation. Once again we could call this a denial of democracy.

In addition, if we compare ourselves to other countries, Canada is less democratic than the rest of the industrialized world. Parliamentarians in most of the other major industrialized democracies participate more fully in the approval of treaties. I will give a few examples: France, Germany, Denmark, Italy and even the United States are required, by their constitutions, to obtain legislative approval for at least certain types of international agreements before they are ratified. We still have a fair amount of work to do to establish a democracy that can deal properly with international agreements.

I referred earlier to bills introduced by the Bloc Québécois on three different occasions. And we will do it again. We have introduced a bill on treaties to modernize the whole process of entering into international treaties. The Bloc Québécois' bill on treaties was designed to enhance transparency and democracy when international treaties are negotiated and signed. Given that such treaties occupy an increasingly important place in the lives of our fellow citizens, a change in established practices was more important than ever.

In addition, the bill ensured that the legislative jurisdiction of the provinces was respected by the federal government. Understandably, we feel very strongly about that. The bill included five changes: the systematic tabling of treaties before the House of Commons, seeking the approval of the House for important treaties, consultation of civil society by a parliamentary committee before Parliament makes a decision on an important treaty, the publication of treaties in the Canada Gazette and on the Internet site of the Department of Foreign Affairs and, finally, the compulsory consultation of the provinces before any treaty on matters within provincial jurisdiction can be negotiated.

The bill on treaties made it to a vote only once, on September 28, 2005, but all federalist parties voted against it. Why? I will get to that. Never short of contradictions, the Conservatives made two promises with respect to international treaties in the last campaign. They promised to put international treaties to a vote in the House before ratifying them and to involve the provinces in the treaty process whenever treaties affected their jurisdictions. Both of these promises have been broken. Since they were elected, the Conservatives have amended NAFTA, signed two investment protection agreements modelled on chapter 11 of NAFTA, one of which was ratified, and entered into a military cooperation agreement allowing British soldiers to train in Canada. They have also signed cooperation agreements in the area of higher education, even though Ottawa does not have jurisdiction over higher education, entered into an agreement to facilitate technological transfers from Canada to China and amended the free trade agreement with Chile. With the exception of the amendment of the NATO treaty, on which we had a mini-debate and a vote at the last minute, none of these international treaties were submitted to this House.

I was saying earlier that the federalist parties had rejected the Bloc Québécois bill because of two clauses in particular, including clause 4, which established a mechanism for consulting the provinces. It would appear that when one belongs to a federalist party, even if they claim to be full of good intentions and that they want to remain open, and even if this is presented in an election campaign to the provinces and, more particularly, to Quebec, they seem to forget it all very quickly when the time comes to take action and to vote. Furthermore, clause 6 did not suit them. That clause recognized the validity of the Gérin-Lajoie doctrine.

In closing, the federalist parties rejected more than just a Bloc Québécois bill; they rejected a piece of Quebec legislation. In fact, section 22.1 of the Act respecting the Ministère des Relations internationales requires the Government of Quebec's consent, both at the signing and the ratification or adhesion of the Government of Canada, before the latter may act on the international scene in relation to any agreement that has to do with areas of Quebec jurisdiction accorded under the Constitution.

It should therefore come as no surprise that, with the federalist parties' rejection of this bill, more and more Quebeckers are becoming sovereignists and that we would tackle this issue again by presenting this kind of bill, which, unfortunately, clearly demonstrates to everyone that those parties are not at all open to Quebec.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

Mr. Speaker, I am pleased to speak to Bill C-9. It is interesting that the government introduced the bill to promote cross-border investment at a time when it has shown a complete lack of understanding and, indeed, incompetence when it comes to this very issue. Nevertheless, the bill would create a set of rules for mutually agreed upon arbitration, which is important, for hearings between investors and foreign governments.

There is no question that 156 countries have signed on to this and over 144 now have ratified this agreement. Therefore, it is important that Canada be one of those, considering some of our major trading partners, including the United States and Japan, have signed on to it.

There is no question, though, that the government, in doing this, has nevertheless mishandled parts of the economy, as we have seen. We look at the forestry industry as a good example. We look at the manufacturing sector. Clearly, we need to be aggressive in international markets. It is important that our investors have certainty in terms of the investment climate, the investment regime when they are investing abroad. The vast majority of countries, as I said, have signed the ICSID. Therefore, it is incumbent upon Canada to do so.

There is no question that increased trade with countries such as China is important and that we have a governing structure that meets the demands and the needs of Canadian investors abroad. They need to have that assurance with regard to an arbitration mechanism. There is no question it is important that we protect and enhance the rights of Canadian investors.

The ICSID convention is an international instrument sponsored by the World Bank. There may be some members who have concerns about that. I do not. In 2006 the transparency aspects of the governance procedures were toughened. It is important to facilitate the increased flow of cross-border investment, something that we know all too much about in this country.

The convention certainly establishes a mechanism which gives that assurance to Canadian investors, something the investment community has demanded for a while. They believe it is important for them in order to do business, and on this side of the House we agree.

It is also important that we have dispute mechanisms because of problems we have seen in the past. Some countries want investment but are not prepared to provide the kind of investment regime that is stable and that provides the rules of the game for investors.

We cannot encourage people to invest abroad in a particular sector if we are not sure if that investment is protected. We have seen cases of nationalization. These are concerns. We have seen problems in Indonesia when we had the situation with Manulife. To deal with that, it was taken to the supreme court in Indonesia.

Having a stable investment regime is important. Having a mechanism to deal with arbitration is critical.

This has been around since 1966. It is interesting that of the 143 countries that have ratified those instruments, many of them are our major trading partners. We need to be in lockstep with them to ensure we are on the same playing field.

Investment disputes are brought under the convention and are administered by the International Centre for the Settlement of Investment Disputes in Washington, D.C. Its activity has increased over the last number of years. At one time it only handled 110 arbitrations in total for 40 years, but as more and more countries have come on board, it is currently dealing with about 105 disputes at the present time. It is obviously a mechanism that people are using. It is a mechanism in which people believe. It is a mechanism that this side of the House supports.

Obviously the centre was established in the very beginning to provide a reliable and effective instrument for resolving investment disputes. I think that is the one thing that we heard at committee. That is the one thing we continually hear: that this gives certainty and that it is the kind of thing the investment community certainly wants to see.

Once this is ratified, it will allow Canadian investors abroad to go out and make contracts with foreign states. They have that option. If they want to go to the ICSID convention, they can do that. It is an option they will have under this agreement.

As well, Canadian investors doing business in a country in which Canada has a foreign investment protection and promotion agreement will have recourse to this arbitration for violators of the agreement. Again, this is providing assistance in that regard.

I think probably the most important advantage is the enforcement of arbitrary awards. Again, this is something that the committee heard about. Again, it is something that we believe is important. Unlike awards issued by other arbitrary institutions, domestic courts cannot refuse to enforce these decisions that are issued under the ICSID. That is important.

Such awards are enforceable in any country, which is important to underline. It can be enforced in any country that has ratified the convention. I think that makes it extremely important for investors and it is why we need to be part of this. When the final judgments are made, they are enforced.

Canada signed this convention in December 2006. In our federation, British Columbia, Newfoundland and Labrador, Nunavut, Ontario and Saskatchewan have already adopted their own implementing legislation. I think it is important that, again in concert with the provinces and the territories, we move forward on this legislation.

When it comes to investment, the international community is very competitive. If a company is going to make a major decision to invest abroad, it needs to have that certainty. As a country, I think we certainly want to encourage good investment. We want to make sure that when our investors are abroad they are not going to be held to ransom or made hostage to arbitrary changes in government policy abroad.

That is why so many countries have signed on. They believe this is an effective way to go and that it does provide the kind of assurance we need. Certainly on the issues of transparency, the committee heard how that was strengthened. At times, I think, it is important to be part of these international conventions, these international covenants, in order to provide the kind of security we need.

Clearly when countries like the United States, the United Kingdom, and Japan sign on, it is important. Japan has the second largest economy in the world. The Japanese are signators. Japan is a very important market for Canadian business. We often overlook Japan and think about China, but Japan has an economy greater than that all of Asia combined, including China. Again, we have tremendous opportunities in Japan.

There may an opportunity down the road to look at a free trade agreement with the Japanese. The Japanese have become very aggressive lately in signing deals with the Philippines and Mexico, countries with large agricultural sectors. For the Japanese, the agricultural sector is very sacred, yet they have been able to come to agreements with those two countries.

The Japanese are watching Canada's negotiations with South Korea very carefully. Obviously we have issues to deal with, not only in the agricultural sector, and certainly in the automotive sector. Of course, our party has made it very clear that we do not want a deal at any price. We want to make sure that our automotive sector has the kind of ability to go into the South Korean market that we see others enjoy, certainly in terms of what the Japanese are doing here. The Japanese are investing in Canada in the automotive sector and the South Koreans are not. Therefore, we cannot do that.

It is important that the Japanese have signed on. The Germans have signed on. The French have signed on. Again, all of these countries have signed on because they realize how important this convention is. For those of us who understand those market conditions, it clearly is important that we are part of this, so we will support the government on Bill C-9 when it comes to passage of this legislation.

Obviously we are concerned that Mexico, India and Brazil have not yet signed on. Again, the need to continue to encourage them to be part of this international convention is important. It is important to look at the benefits for their investors, as well as ours, as we move forward in this regard.

In terms of its international participation in promoting Canadian companies, the government has had a checkered past, but at least this bill will provide rights for our investors in other jurisdictions. At least on this issue, the government has it right.

Unfortunately, the government still does not understand the problems that our own domestic sectors are having, particularly in the forestry, the manufacturing and the auto sectors. These are issues that this party, the Liberal Party, has articulated for a long time.

Clearly because of the good management of previous Liberal governments, we were able to leave an impressive cupboard in terms of the economic tools that the government has been able to use over the last couple of years. The Conservatives did not do it. It was the Liberal government, working with Canadians, that was able to eliminate the $42.5 billion deficit it inherited from the Conservatives and that was able to make us the only G-7 state paying off our national debt. That is a very impressive record.

When the Conservatives talk about the last 13 years, the last thing they want to talk about is the last 13 years of good Liberal economic management. That is okay, because we know and Canadians know the economic record of this country.

We know what is important in terms of dealing with the business community abroad. That is why we will support this legislation. We believe very strongly that good fiscal tools at home and good investment tools abroad obviously are good for Canadians. They will promote jobs and they will secure jobs. We believe very strongly that this is the way to go.

I would suggest that at the end of the day, when presumably this legislation is adopted, the rules of the game will be very clear. They will be helpful. We should see an increase in people wanting to invest and also of course in encouraging other countries to invest here, because the rules work both ways for those who have signed on. Again, we are looking at 144 countries that have ratified this particular convention so it is something that we see as important.

Of course on this side of the House we believe in sound economic principles and obviously we are prepared, when we see good legislation come forward, to work with the government on it. Obviously if there is bad legislation we are not going to support it, but there is no question that in the standing committee we heard very clearly the need for this legislation and the rationale for it. Again, we will support this legislation as we move forward.

I take it that there will not be support from some of the parties in the House, but nevertheless I think that at the end of the day Canadians will be supportive and appreciative of the fact that the right thing was done and the rules have been made very clear on arbitrational issues. I think that is what is needed and we support it.

[Deepak Obhrai, Conservative, Parliamentary Secretary to the Minister of Foreign Affairs]

Mr. Speaker, I am pleased to speak today in support of Bill C-9, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention), which I will refer to as “the convention”.

The convention was sponsored by the World Bank to facilitate and increase the flow of international investment. It establishes rules under which investment disputes between states and nationals of other states may be resolved by means of conciliation or arbitration. It also creates the international centre for the settlement of investment disputes, known as ICSID.

Bill C-9 implements the ICSID convention for Canada. It deals with enforcement of ICSID awards for or against the federal government and foreign governments, including the constituent subdivisions designated by foreign governments.

The convention deals with what is commonly called the resolution of investor-state disputes. Such disputes arise in a variety of situations. For example, they can arise when a state where a foreign investor has invested adopts laws affecting the activities of the investor in a discriminatory manner or nationalizes the investment.

International arbitration is a recognized method for resolving disputes. It provides a way of resolving legal issues without resort to the domestic judicial process.

It has long been recognized that when parties to a dispute have recourse to arbitration, the result of the arbitral process ought to be recognized by the courts. Thus, for example, the awards resulting from commercial arbitration, in other words from arbitrations between business enterprises, are recognized and enforced by courts.

The decision as to whether to have recourse to arbitration or the judicial process is a decision for the parties to dispute. This flexibility is welcomed in many types of situations.

In the case of the convention being implemented by Bill C-9, one of the big advantages of having recourse to arbitration is that it “denationalizes” the process. Let me explain.

When a dispute arises between a foreign investor and the host country, one of the options is for the investor to pursue the case before the courts of that host country. In most cases, as would be the case in Canada, the foreign investor would benefit from a fair and equitable process; the national court would not prejudge the matter and would render a decision in conformity with the law.

However, in some situations this might not happen. The tribunal might favour its government to the detriment of the foreign investor.

The fact that the parties to an arbitration can select the arbitrators who will hear and decide the case is another advantage of the arbitral process. If the dispute involves a specialized matter, for example, petroleum exploration, or maritime issues, the ability to choose arbitrators with specialized knowledge on the subject matter of the dispute can make the entire process work much better and can lead to better decisions.

The arbitration mechanism established by the ICSID convention is one that is used for disputes between investors and states. The convention has been ratified by 143 states, making it one of the most widely ratified of all international instruments.

The distinguishing feature of ICSID, what makes it uniquely valuable, is the enforcement mechanism which this legislation will implement for Canada. The ICSID enforcement mechanism is very effective. This effectiveness contributes to the protection of the investor. ICSID's enforcement mechanism lies at the heart of the effectiveness of the ICSID convention.

An arbitral award from any other arbitral body is subject to review by a domestic court before it can be enforced, but an ICSID award merely has to be presented to a domestic court with a request that the court enforce it. Under Bill C-9 the award must be recognized and, with this recognition, enforcement mechanisms become available immediately. Enforcement could include payments seized by officers of the court.

In the great majority of cases the losing party in an arbitration will pay the award of an arbitral tribunal without the need for the successful party to take any enforcement proceedings. The same is true for investor-state arbitration.

In Canada, arbitral awards, including investor-state arbitral awards, are currently enforced pursuant to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

The New York convention permits a limited review of an arbitral award by domestic courts. It allows a court to refuse to enforce an award if to do so would be contrary to the public policy. In addition, it permits a state to exclude certain subjects from the application of the convention and thus from enforcement.

The ICSID provides a better enforcement mechanism. It does not permit a state to exclude from dispute settlement any matter which the state has consented to submit to arbitration. The ICSID awards are enforceable as if they were final decisions of a local court. This simple, efficient mechanism guarantees better protection for Canadian investors abroad.

Clause 8 of the bill authorizes any superior court in Canada to recognize and enforce awards as described in the bill. The Federal Court is a superior court. The Federal Court would have jurisdiction over awards involving the Government of Canada and awards involving foreign governments or their constituent subdivisions designated under the convention.

In addition, the ICSID convention provides explicitly that the ICSID awards are binding between the parties and once parties have agreed to arbitration they cannot seek remedy before another body, such as courts of justice.

Therefore, it is not open to a foreign tribunal to refuse to enforce an award on the basis that the ICSID arbitration tribunal has exceeded its jurisdiction or was not validly constituted. These kinds of issues can affect enforcement of awards other than ICSID awards, thereby delaying resolution of the dispute. The ICSID does not permit such dilatory tactics.

Section 7 of the bill provides that an ICSID award is not subject to any remedy by a Canadian court. Remedies thus prohibited would include appeal, review and nullification. The decision to have recourse to arbitration is entirely voluntary, but once the parties have consented to ICSID arbitration they cannot seek review in another forum, such as the courts.

The only review of an ICSID award, if a party to a dispute considers it contains errors, is the review process provided by the convention itself. It provides that a request for revision, interpretation or annulment of an award must be made to the secretary-general of the ICSID. This procedure allows the parties to avoid having national courts involved in assessing allegations that claim there is something wrong with an award, while at the same time ensuring the awards which are erroneous can be corrected.

There are numerous reasons to support Canada's adherence to the convention. It would provide additional protection for Canadian investors abroad by allowing them to have recourse to the ICSID arbitration in their contracts with foreign states.

It would also allow investors of Canada and foreign investors in Canada to bring investment claims under the ICSID arbitral rules where such clauses are contained in our foreign investment protection agreements and free trade agreements.

To date, 143 states have ratified the ICSID convention. The majority of our trading partners are parties to it, except for Mexico, India and Brazil. Ratifying the ICSID would bring Canadian policy into line with our OECD partners. In a survey conducted by the ICSID center in 2004, 79% of the respondents said that the ICSID played a vital role in their country's legal framework and 61% said that the ICSID membership had contributed to a positive investment climate.

We know, anecdotally, that Canadian investors are trying to find ways to benefit from the ICSID, even though Canada is not party to the convention. Firms have, for example, arranged investments through a third country that is party to the ICSID. However, such convoluted financing is not possible for all investments by Canadian investors.

International investment arbitration is growing in importance. The stock of Canadian direct investment abroad in 2005 increased to a record $469 billion. As a result of the globalization of investment, the number of investment disputes has greatly increased in the last five years.

ICSID arbitration has soared: only 110 ICSID arbitrations have been completed over the past 40 years but 105 proceedings are now under way. The NAFTA parties alone have faced over 40 investor-state arbitration claims since NAFTA entered into force.

The tremendous growth in investment and investor-state disputes has made Canada's failure to ratify the ICSID the focus of attention by Canadian businesses, the Canadian legal community and our trading partners.

The ICSID regime provides several important advantages. Compared to other arbitration mechanisms, the ICSID regime provides better guarantees regarding enforcement of awards and more limited local court intervention.

Any arbitral award rendered under the auspices of ICSID is binding and any resulting obligation must be enforced as if the award were a final domestic court judgment. Moreover, all ICSID contracting states, whether or not parties to the dispute, are required by the convention to recognize and enforce the ICSID arbitral awards.

Investors often prefer to rely on such arbitrations rather than on the local courts of the country whose measures are in dispute to ensure an independent resolution of the dispute.

The ICSID's relationship with the World Bank assists investors in obtaining compliance with the ICSID award and its roster of arbitrators gives investors access to well-qualified arbitrators at ICSID controlled rates, with extensive experience in international investment arbitration.

The ICSID also provides important institutional support for litigants. The ICSID convention is a well known tool for settlement of investment disputes. Therefore, the interpretation of the convention and its usefulness are predictable.

Canada already has numerous links with the ICSID. Provisions consenting to ICSID arbitration are commonly found in contracts between governments of other countries and Canadian investors. The NAFTA in chapter 11, the Canada-Chile FTA and most of our bilateral foreign investment protection agreements known as FIPAs all provide for the ICSID as a dispute settlement option that can be chosen by an investor if both the state of the investor and the host state for the investment are party to the ICSID.

However, Canada and Canadian investors cannot benefit from this choice if Canada is not a member.

It is important that Bill C-9 be passed in order to facilitate adherence by Canada to the ICSID convention as soon as possible.

The House proceeded to the consideration of Bill C-9, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention), as reported (without amendment) from the committee.

[Robert Pratt]

I think I can answer your question.

The reason Quebec and Canada and the Inuit have excluded the Naskapi is that all parties claim the treaty rights under the Northeastern Quebec Agreement and the James Bay and Northern Quebec Agreement of the Naskapi are not being affected by the expansion of powers to be given to the Nunavut government. In other words, the hunting, fishing, and trapping rights, and the other treaty rights are not being affected, the argument being that there was a secession of all aboriginal rights in the territory by all parties and an expropriation by Bill C-9 in northern Quebec, and that these are new powers.

The Naskapi argument is not that their treaty rights as such are being affected; it's that they wish not to be dominated in a jurisdictional manner by another ethnic group, which is the Inuit. With regard to their traditional territory, they would like the legislated powers to remain with Quebec. They feel they would be protected by Quebec, but once these powers over resources and other sensitive matters are given to the Inuit, they feel they'd be discriminated against. That's the reason.

In terms of consultation, as I say, the attitude of Quebec and Canada is that consultation is not required because the treaty rights as such are not being affected. We're talking here, broadly, about something else called interests. It's a matter of governance, and these are new powers.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, 2007 has been a great year for Canada and a great year for the House of Commons.

Next week is the last week of the fall sitting and the last week before the new year. The sitting and the year have been extremely successful for the federal government, as we have introduced legislation in all of our priority areas and have delivered results for Canadians.

However, since we have only a few sitting days remaining this year to address important tax cuts, security issues and other priority bills still pending, Canadians are expecting us to work very hard in the coming days to produce results for them.

We want to see our priority bills passed in this House and sent to the Senate so that they may become law before Christmas. As a result, next week will be 2007, a year of results week.

We plan to build on our past achievements by debating and passing the budget implementation bill, which would lower taxes for all Canadians by reducing the GST to 5%, as well as by bringing in tax cuts for individuals and corporations.

We will debate Bill S-2, An Act to amend the Canada-United States Tax Convention Act, 1984, which must be passed by Parliament before January 1 to ensure that it is implemented and we can benefit from that.

We will also debate our railway transportation bill, Bill C-8, and our bill on the settlement of international investment disputes, Bill C-9. Both bills will help create jobs and provide economic certainty for Canadians.

Our government will continue to show Canadians that we are serious about tackling crime and strengthening the security of Canadians. Next week, we expect that our security certificates bill, Bill C-3, will be reported back from committee. The bill will then be debated at report stage and third reading. We hope the hon. members of the House understand the importance of passing this legislation so that it may be considered and passed by the Senate before the deadline imposed by the Supreme Court.

We will debate any amendments made to our Bill C-13 on criminal procedure, currently being examined by the Senate.

Speaking of the Senate, the government hopes that the tackling violent crime act will pass the Senate so Canadians can feel safer over the Christmas holidays knowing that the bill has been enacted into law.

Canadians also expect their institutions to be more accountable and democratic. We have built a record of results on this file as well, with the passage of the Federal Accountability Act and Bill C-31 to improve the integrity of the voting process. Next week we will continue with our plans in this area by debating Bill C-29, which closes a loophole in our campaign financing laws that Liberal leadership candidates used to bypass campaign contribution limits last year.

We would also like Bill C-6, on the visual identification of voters, and Bill C-18, on the verification of residence, to be sent back by committee. It is important for these bills to become law, so that they can be implemented in time for the next byelections.

Tomorrow I will also seek consent to send Bill C-30, the specific land claims bill, to committee. This bill to create certainty and allow land claims to be resolved more quickly is a welcome addition and the country will be better off the sooner its process is put in place.

This year, 2007, has been an excellent year for Canada. Our economy is booming, the country is united and there is integrity in government.

We have achieved a lot this year. Our government has delivered real results for Canadians in 2007 and will continue to do so next week and in the new year.

[Rick Dykstra, Conservative, St. Catharines, ON]

Mr. Mauser testified on Bill C-9, and I don't know why he would be excluded from being someone very capable of speaking to those issues.

Foreign Affairs and International Development

[Kevin Sorenson, Conservative, Crowfoot, AB]

Mr. Speaker, I have the honour to present, in both official languages, the first report of the Standing Committee on Foreign Affairs and International Development.

In accordance with its order of reference of Tuesday, October 30, 2007, your committee has considered the supplementary estimates 2007-08, Votes 1a, 5a, 10a, 20a, 25a, L40a, 45a and 50a under Foreign Affairs and International Trade and agreed on Tuesday, November 27, 2007 to report them without amendment.

Mr. Speaker, I also have the honour to present, in both official languages, the second report of the Standing Committee on Foreign Affairs and International Development.

In accordance with its order of reference of Monday, October 29, 2007, your committee has considered Bill C-9, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention), and agreed on Tuesday, November 27, 2007 to report it without amendment.

[The Chair, Conservative, Kevin Sorenson]

We'll call this meeting back to order.

In our second hour here, we'll be a little pressed for time, but I don't anticipate taking a long time considering Bill C-9, an act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States.

We're going to commence our clause-by-clause consideration of the bill. Pursuant to Standing Order 75(1), our consideration of clause 1 is postponed. So the chair will call clause 2. Because there have been no amendments brought forward, we'll just go through this quickly.

Madame Barbot, did you have a question?

[The Chair, Conservative, Kevin Sorenson]

We will suspend for a few minutes and come back on Bill C-9.

[The Chair, Conservative, Kevin Sorenson]

Good morning, colleagues.

Welcome. This is meeting number 4 of the Standing Committee on Foreign Affairs and International Development, on Tuesday, November 27, 2007.

Our orders of the day begin with the supplementary estimates. You will take note in your agenda of the votes and different areas that we're going to look at under Foreign Affairs and International Trade.

Our witnesses today are from the Canadian International Development Agency. We welcome the president, Robert Greenhill. As well, we have Gregory Graham with us today, who is the acting vice-president, human resources and corporate services branch. We also welcome, from the Department of Foreign Affairs and International Trade, the deputy minister, Leonard Edwards; and Doreen Steidle, the assistant deputy minister of corporate services.

As you know, in our second hour we are going to move to Bill C-9, which I don't think is going to take a lot of time. Because of starting late, if it suits with our guests here today, we may go over the twelve o'clock cut-off, if that's all right. It's just depending on how many questions we have.

Again, we welcome you.

I'm not certain of the order in which you want to go on. I see on our agenda we have Mr. Greenhill first, and maybe we would ask him to begin.

Go ahead, Mr. Greenhill.

Tackling Violent Crime Act

[Rob Nicholson, Conservative, Minister of Justice and Attorney General of Canada]

Mr. Speaker, the hon. member talked about priorities and the truth.

Is it not the truth that when Bill C-9, the bill that would limit conditional or house arrest, was before Parliament, it was the Liberal Party that gutted it and made it possible for arsonists who burn down people's houses to still be eligible to go back to their own houses after sentencing? Those members made sure that clause was in there. Was that not part of it?

Is it not the truth that when the Conservatives brought in a bill for mandatory jail terms for people who commit serious firearms offences and the Liberal Party voted against it in the House of Commons, five Liberals could not stomach the official Liberal position on it and voted against their own party?

Is it not also the truth that when Liberals came forward with their so-called fast tracking they knew it needed the unanimous consent of the House, they already knew that the NDP and the Bloc did not support it, and they also knew that it was procedurally out of order, which was confirmed by the Speaker on two different occasions? Is that not the truth?

Finally, I would like to know from the hon. member how surprised she is that every single time the Leader of the Opposition has been asked about his priorities since June, he has never once mentioned criminal justice, fighting crime in this country or making our streets safer. When he put out his pseudo speech from the throne, there was not one single word about fighting crime. How surprised was she about that?

I bet none of those members were surprised, because it is not a priority for the Liberal Party of Canada.

[The Chair, Conservative, Kevin Sorenson]

Members, we now have an opportunity to hear from the Canadian Chamber of Commerce. Testifying we have Milos Barutciski, vice-chair of the international affairs committee, and Brian Zeiler-Kligman, international policy analyst.

Recently the Honourable Perrin Beatty, president and CEO of the Canadian Chamber of Commerce, extended to me the opportunity to send a congratulatory message to Donald Stewart, president and CEO of Sun Life Financial on the occasion of his being honoured as the 2007 recipient of the Canadian International Executive of the Year Award. So the committee may want to take a look at the message that was forwarded.

We certainly do appreciate the work of the Canadian Chamber of Commerce, and we look forward to hearing from them.

To our two guests today, we look forward to hearing what you have to say in our deliberations on Bill C-9. I know that some of you were here for the testimony we heard earlier.

Welcome here. The time is yours.

[The Chair, Conservative, Kevin Sorenson]

All right.

We want to thank you for coming to help our committee understand some of these conventions a little better. We appreciate your input on Bill C-9.

We're going to suspend for just a few moments.

Mr. Dewar mentioned earlier that he's never seen a free lunch. Well, there is lunch here. As we do the exchange between the guests and the next group that we're going to hear from, I would ask committee members to avail themselves of that lunch. It's one of the few perks of meeting in this time slot, through the lunch hour.

Thank you again for coming.