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

[The Deputy Speaker, Bill Blaikie]

It is my duty pursuant to Standing Order 38 to inform the House that the question to be raised tonight at the time of adjournment is as follows: the member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, Manufacturing and Forestry Industries.

[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.

[Penny Priddy, NDP, Surrey North, BC]

Mr. Speaker, if I had not been told earlier that the Bloc supported this motion, I would not have known that given the comments of the member. The member has raised legitimate concerns around the sporadic publication of treaties, the consulting of civil society, the impact on the lives of people and therefore it should be looked at more carefully. He has said that the Conservative words are not worth that much. Those comments to me do not sound particularly supportive of this treaty.

One of my other colleagues will have subsequent question, but my question for the member would be this. Given all those comments, which were primarily of concern, why then does the member support the bill?

[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.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, could the member give a specific and concrete example of where a Canadian company was protected under some of these other provisions of international agreements or treaties, which he thought was undemocratic or unjustified?

I appreciate his support of the bill to help protect Canadian investors abroad, but he referred to problems with other types of provisions protecting investors that may not ultimately be democratic.

Could he give not a generality but a specific example of where a Canadian company was protected but he did not feel it was democratic or appropriate?

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

Mr. Speaker, the example that comes to mind is not about a Canadian company, but the problem I mentioned earlier concerning chapter 11 of NAFTA. It is about an American company that wanted to set up in Mexico and create a large garbage dump. The municipality refused to let that company turn the city into a dumping ground. Under chapter 11 of NAFTA, the American company was able to take legal action against the municipality and it won.

The hardest hit are the poorest countries. A few hundred million dollars for countries and companies such as ours is perhaps not as serious as it would be for developing countries or small municipalities. We can see the problems that can arise.

Companies here need dispute settlement protection. It is crucial for investors to have some protection before investing, so that their investments do not grow without them seeing any profits. This is obvious.

This is perhaps a general answer to the question from the member for Yukon, but if he has specific examples, he is more than welcome to share them with us.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, I would first like to thank the hon. Bloc Québécois member for his speech and for clarifying the Bloc's position. It is very interesting to try to understand the reasoning behind the Bloc Québécois' support for Bill C-9.

Perhaps one might better understand their position if one considers the fact that the Bloc decided to support the Conservative government's last budget, the lack of support for our activities concerning banks here in Canada, the hesitation on the part of Bloc Québécois members to join us in convincing the government that this is the wrong direction to take, and even the strategies regarding free trade or the action of banks right here in Canada. Canadians want us to take this direction in order to trigger major changes.

Here is my question for the Bloc Québécois member. Considering the lack of transparency, lack of accessibility and lack of responsibility concerning this bill, how can the Bloc Québécois support it? How can he justify this decision to all Canadians?

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

Mr. Speaker, our party is often criticized for not doing anything and not changing anything, but the hon. member just said that we are practically responsible for the impending end of the world.

The Bloc Québécois always acts responsibly. As far as the last budget is concerned, I recall that all the parties in this House supported it. During the last vote, not a single NDP member stood up or said a word. The budget was passed unanimously. We are not interested in hearing any more about the last budget, especially since it was the Bloc that got $3.3 billion to resolve in part, but not entirely, the fiscal imbalance. That was a major battle Quebeckers wanted us to fight here in the House. In my riding, when I go to the grocery store, I am not embarrassed. I hold my head up high. People understand quite well the work we are doing here and they thank us for it.

To support a budget, tax measures or certain bills does not mean supporting a government. Where is the logic in that? I cannot imagine. The hon. member has been here longer than I have and there certainly have been times when she voted with the government. I remember the cozy relationship between her and the government of the Prime Minister's predecessor, the hon. member for LaSalle—Émard—he is still here, but we do not see him very often. This relationship between the NDP and the Liberals was right up front at the time and that did not mean that the NDP supported everything the Liberal government did. It did not support the sponsorship scandal or things like that.

We have to be consistent. Supporting this type of measure, whereby Canada becomes a member of a dispute settlement tribunal, does not necessarily mean supporting every Conservative government measure.

I even said from the outset in my speech that this government was insensitive about the manufacturing crisis and the forestry crisis. I am the agriculture critic for my party. I defend the beef and pork producers who are currently experiencing serious problems and I can assure my colleagues that this government is insensitive to their calls. The support we are giving the government today has nothing to do with all the Conservative government's bad policies.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I am very pleased to speak today to this bill, the World Bank's investment tribunal, which is being brought forward to the House through the International Centre for the Settlement of Investment Disputes. It was set up in 1966. I guess it has been a bit of a late bloomer. Here we are 40 years later trying to actually give it some legitimacy.

I have listened to the debate and I find it interesting, but it is predicated on two fundamentally wrong principles.

The first is the principle that if we look at the failed processes that are in place now for trade, particularly the chapter 11 mechanisms for NAFTA, it has been proven time and time again that they allow certain corporate interests to override regional, state and national governments and the legitimate interests of governments to protect citizens in a fair manner. That has been used again and again as a blunt instrument to push a privatizing agenda against national interests. We are supposed to accept that this principle, which has failed again and again under chapter 11, will somehow be different with this tribunal, even though it is using basically all the same input mechanisms, and that things will somehow be better this time.

The second element in this discussion, which we are supposed to accept, is the tribunal, through the World Bank, is such an august body that it will have legitimacy in its own right. We are supposed to forget 40 years of the neo-liberal experience under the World Bank and the severe damage it has done in development.

Therefore, I will speak on practical issues of how trade disputes are actually dealt with in the real world so we can bring a bit of perspective to this debate.

I will begin with the World Bank's credibility. Certainly it has taken a number of hits because it was a dumping ground for Paul Wolfowitz, who is notorious now as one of the architects of the illegal war in Iraq. He was such a liability to even George W. Bush that the Americans could not figure a place to dump him to get his radioactive state out of Washington, so they sent him to the World Bank.

Under Wolfowitz's leadership, credibility of the World Bank was severely challenged. There was an element with his girlfriend and losing complete support of the directors of the World Bank around the entire world. Therefore, there was a coup to get this guy out. Here was a guy who even George W. Bush would not be seen beside representing the World Bank.

I refer members to a recent article in The Guardian that said we should end the hypocrisies on the World Bank because the fact was the World Bank's credibility was shot long before Paul Wolfowitz brought his girlfriend on the scene.

Naomi Klein has written extensively about the failings of the World Bank in terms of ensuring that when we do have trade pacts and we do have development deals, that communities and national economies are able to benefit from them. She writes:

First, let's dispense with the supposed hypocrisy problem. “Who wants to be lectured on corruption by someone telling them to ‘Do as I say, not as I do’?” asked one journalist. No one, of course. But that's a pretty good description of the game of one-way strip poker that is our global trade system, in which the United States and Europe—via the World Bank, the International Monetary Fund and the World Trade Organisation—tell the developing world: “You take down your trade barriers and we'll keep ours up”.

We can see that whether it is farm subsidies or any form of international trade. She goes on to say:

The more serious lie at the centre of the controversy is the implication that the World Bank was an institution that had impeccable ethical credentials—until, according to 42 former World Bank executives, its credibility was “fatally compromised” by Wolfowitz.

The truth is the bank's credibility was compromised long before Mr. Paul Wolfowitz. It was compromised when it forced school fees on students in Ghana in exchange for a loan, when it demanded that Tanzania privatize its water system, when it made telecom privatization a condition of aid for Hurricane Mitch relief and when it demanded labour “flexibility” in Sri Lanka in the aftermath of the Asian tsunami.

While the rest of the world was raising money in our schools, in Canada and around the world, to help the victims of the tsunami, the World Bank was putting the squeeze on Sri Lanka to break apart its national policies on protecting its own workers. The Paul Wolfowitz scandal pales in comparison to that.

On the issue of corruption and accountability, she says that the World Bank has absolutely no credibility to speak of because the World Bank was there when the Soviet Union was basically picked apart by an oligarch of mafia interests. We saw the role the World Bank played in Chile with, of course, Milton Friedman, the original doctor of shock and torture for the economy, and the incredible damage that was done to all segments of society in what was actually a very middle class country at that time until the World Bank was through with it.

The World Bank has a lot to answer for in terms of its credibility of being a fair arbiter, an honest policeman on the world stage. I think many people in developing countries have developed a very strong distaste for that. We need to have that in mind when we talk about any trade agreements that come before us in the House.

The issue of trade is paramount to us as a nation. We are a nation of traders and we want fair rules. In our farming sector we have come up against incredible odds because some of our major competitors, the EU and the U.S. , continually dump products on the international markets and continually distort the price of grains and other commodities through their subsidies. It has hurt us but it has had devastating effects in the third world where y the EU or the U.S. can dump grain, corn or any other product into the third world where farmers do not have nearly the same protections.

When we all talk about a level playing field, it seems that they are never on the level playing field. Who is on the level playing field? Well, it is the corporations and their friends, but national economies, especially in the third world, are not on any kind of level playing field.

If a trade agreement comes before this House, we need to look at it through the prism of asking whether it will be fair, just, true and open trade or whether it continues to perpetuate a very one-sided cycle. Unfortunately, I believe that this one-sided cycle will continue.

I would like to speak to a couple of examples. It was mentioned earlier in the House the example of Metalclad in Mexico where a U.S. company felt that its rights were unfairly impinged by the fact that in its desire to use a poor neighbourhood in Mexico as a toxic waste dumping ground somehow its rights were violated by the fact that the people of that region said that certain base standards needed to be set. They said that as a municipal government, a regional government and a national government they needed to protect their country from being a dumping ground for waste.

Metalclad took that through binding chapter 11 arbitration. Anybody who says that the chapter 11 arbitration process is in any way fair or open is deluding themselves. They would be smoking the kind of stuff that I know our Conservatives are certainly wanting to snuff out.

What happened in that Metalclad decision has been repeated in numerous decisions under NAFTA, chapter 11, where basic rights of a country to set certain levels of standard have been erased by a body that is unaccountable, unelected and sets its own standards, in fact it sounds very much like the Liberal dominated Senate, but it has the ability to do worse because there is no appeal mechanism under chapter 11.

We are seeing a very similar setup with this World Bank front in terms of its mechanisms. Chapter 11 does not have to release the results of its findings. It does not have to allow any third party briefs to be brought forward. The ability of a national government to protect its interests once it has gone to a chapter 11 challenge becomes very limited.

I would like to speak about my own interest in chapter 11. We have a situation right now where the taxpayers of Canada are on the hook for a potential $350 million in damages that is being heard at a secret tribunal, a chapter 11 of NAFTA. That is being brought forward by a company 1532382 Ontario Inc. This is a company that was founded in Ontario and its board of directors is listed as being in Don Mills, Ontario. The people on the board of directors are not known to the public because they get to hide behind corporate anonymity, but this numbered company is suing the Canadian public for $350 million, claiming that its international rights were violated.

I want to go through this story so people in the House and anyone watching back home will know how this kind of, as Naomi Klein said, one-way strip poker is played.

1532382 Ontario Inc. was incorporated in the province of Ontario to go after a municipal waste contract under provincial jurisdiction. That provincial waste contract was the 1995 original bid for picking up garbage for the City of Toronto. The solution being offered by 1532382 Ontario Inc. was to ship it up to northern Ontario to the riding of Timmins—James Bay, where we have these massive iron ore pits that are filling with groundwater, and dump the garbage for 20 or 30 years in the pits. The fact that 380 million litres of groundwater flows through those pits a year is not a problem for the planners of this dump because it was actually written into this scenario that they would use the groundwater to wash the garbage and they would get 20 years out of these pits. Three hundred and eighty million litres of groundwater would flow through for all of eternity as far as we know unless something dramatic changes in northern Ontario. The guarantee was that this numbered company with no name behind it would set up a commitment that for 2,000 years it would run pumps to wash the garbage, to take the groundwater and pump it back into the surrounding environment.

In fact, when the planners came before the Ontario government with this plan, they actually costed out the cost of fixing the pumps 1,500 to 1,600 years in the future. It was amazing. They figured it would cost them $25 an hour 1,600 years in the future. That is like Clovis and the Franks talking about what it would cost to run trucks on our roads back in A.D. 600. This shows how absurd this plan was.

This plan was so absurd that it would never have made it to first base until of course the Mike Harris government came in. My God, there are certain people here who were there at the time when Mike Harris stripped the environmental assessment laws. Since they knew a deal like this would never go through with scrutiny, they put it through the biggest waste management proposal in Canadian history through a scoped EA where they were able to omit all the questions about groundwater safety so that this dump could get passed. In fact, the only question that was allowed in the entire hearing was whether or not the numbers from the computer model matched. There was nothing about real time experience at these pits. These were badly fractured pits. People who lived underneath the pits can tell us about the problems with the water flowing through. The miners who worked in the pits knew the situation in the pits.

The Harris government thought this was a great deal because some of the people involved in 1532382 Ontario Inc. happened to be from the city of North Bay, which was the home base of Mike Harris. It almost came to fruition but the people of northern Ontario and the Abitibi region of Quebec came together and said that was enough. They said that they would not go through with a project that was so risky, so unproven and so potentially disastrous to the health of their region that it literally took railway and road blockades to get this government's attention that there were problems with this plant, problems that would have easily have been identified if we had a proper environmental assessment in process. The dump plant for the Adams mine fell through, which is no surprise. Sometimes really bad ideas do not fly.

The reason I mentioned that dump is because a very curious thing happened afterward. At the time, 1532382 Ontario Inc. was identified with Gordon McGuinty, a North Bay businessman. He had Notre Development. He had a number of investors and many of those investors were well known. Many of them were from various parts of Ontario. When he had a problem, after the deal fell through and waste management walked away, he was looking for partners for this dump, and this is where another number of investors came through. Some of those investors were also identified with the Conservative Party. People who identified names who were involved in this were all from Ontario.

I could name them here. I am not afraid to name them. Mr. Cortellucci was identified as someone who certainly seemed to have an interest in this mine. Of course it was all behind numbered companies, so how do we find out?

This Ontario numbered company actually donated money to the leadership bid of the present finance minister. This Ontario company gave donations to the Conservative Party. It was clearly based in Ontario and it was dealing with a municipal contract. After the Adams mine deal fell through, the company sued the present Ontario Liberal government for $300 million for the fact that it was robbed of its deal. That lawsuit went nowhere so we did not hear anything more about this numbered company until last year. It was not interested in going through the Canadian courts anymore. It was taking its case to chapter 11 of NAFTA. How is it that an Ontario company that is donating money to Ontario political officials dealing with a municipal waste contract can go to chapter 11 as an international investor?

Lo and behold, Vito Gallo, a man nobody has ever heard of, steps out of the wings and says that he is the sole owner of this mine. I asked the Toronto city councillors who were involved in the negotiations if they had ever heard of Vito Gallo. They had never heard of him. I had to tell them that he was suing the Canadian public for $350 million claiming that he owned the Adams mine and that his mine has gone up in smoke. I was involved in those negotiations with the Algonquin nation when I worked with them and we had never heard of this man. Now he has this deal and is going before chapter 11.

There will be no appeal at chapter 11. We have no right to bring forward briefs about who was involved and who the potential Canadian investors were. We do not have the ability to do that. The Canadian public is trusting three guys in Washington to dispense justice on $350 million. In any kind of fair deal, as in the case of taking this dispute to a Canadian court, there would be depositions from both sides, there would be witnesses and there would be cross examinations. We would squeeze the Charmin to see if this case had any legitimacy at all. That is what the courts are there to do.

In a large dispute where a large amount of money is involved and where a provincial or federal law is in question, that dispute must be brought forward to be tested to ensure there is full due diligence. That does not happen with chapter 11. We have seen it time and time again where even dispute resolutions do not need to be made public.

How can something be transparent and open when third party briefs are not allowed to be brought forward and there is no right to full legal representation? How can something be transparent and open when a panel of three get to decide and their word is law? There is no appeal and no challenge process. If anybody tells me that is good for the business of the nation then we are certainly not on the same political wave length. I believe that certain issues need to be brought forward before any of these kinds of decisions are allowed.

This brings me to the World Bank's investment tribunal. I think we are dealing with many of the similar concerns that we saw with NAFTA's chapter 11. We have not seen that anyone has learned anything from chapter 11 about making these deals more open and more fair. In fact, this really seems to be just another way for the government and its friends in the Liberal Party to resurrect the multilateral investment treaty. When that treaty was brought to the public's attention, Canadians said that there were issues of national sovereignty and our economy that they were not going to give away to some arbitrary, unaccountable, unelected body to make binding decisions. That simply undermines our national sovereignty. There was a national response against the multilateral investment treaty. I know that certain people from certain ideological stripes felt the pain of losing that.

Under article 52, an annulment of this decision may only be allowed if:

(a) that the Tribunal was not properly constituted;

(b) that the Tribunal has manifestly exceeded its powers;

(c) that there was corruption on the part of a member of the Tribunal;

(d) that there has been a serious departure from a fundamental rule of procedure; or

(e) that the--

[The Acting Speaker, Royal Galipeau]

Questions and comments, the hon. Parliamentary Secretary to the Minister of Public Works and Government Services.

[James Moore, Conservative, Parliamentary Secretary to the Minister of Public Works and Government Services and for the Pacific Gateway and the Vancouver-Whistler Olympics]

Mr. Speaker, I listened intently to the speech given by my colleague from Timmins—James Bay. I know he used to be the trade critic for the NDP, I believe, in the previous Parliament.

[Charlie Angus, NDP, Timmins—James Bay, ON]

No, agriculture.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

Agriculture, I beg your pardon, Mr. Speaker.

The hon. member spoke for a good length about chapter 11 of NAFTA. It is remarkable to me. First, I was frankly a little bit disappointed by his speech. I think one can make a point for or against something without personal attacks, being negative, smearing Paul Wolfowitz, smearing people's intentions and attacking their character. One can make the point against chapter 11 without having to attack someone's personality and character. It is entirely unnecessary and it is unbecoming in this place.

Beyond that, chapter 11 of NAFTA extends the Canadian value internationally. What chapter 11 says in NAFTA is that we cannot discriminate against a foreign owned company.

The hon. member used the example of Metalclad. What chapter 11 says is that if a municipal, provincial or federal government in Canada or any jurisdiction in the world wants to regulate or legislate against certain behaviours by any companies, say one which is dumping pollutants that may be detrimental to an environment, a government can say that companies cannot dump this pollutant.

It cannot say that company A cannot dump the pollutant. It has to say that all companies have to stop dumping this pollutant. The reason why is because countries very often use regulations and laws to discriminate against one company in favour of another. Chapter 11 means that we have to treat all companies equally, not discriminate, and thereby allow companies to change their practices in order to meet the new burden in the best interests of the public. It forces countries not to discriminate. That is what chapter 11 does.

The hon. member says that this allows companies to sue governments in order to change laws. Yes, it does. In Canada, a foreign company can sue the Canadian government or any government if it is being discriminated against. It could do that before chapter 11. Chapter 11 allows a Canadian company to sue a government in another jurisdiction so that it gets treated equally and so that it is not discriminated against. That is what chapter 11 does.

The hon. member says that a company can sue a government and overturn a law. Yes, because it is being discriminated against to benefit another company that may be domestically based. It is a trade barrier. It prevents competition. Preventing competition prevents people from getting the best quality, the best price and the best choices in products, and how they want to live their lives. That is a good thing.

The principles of chapter 11 exist in Canada whether we have NAFTA or not. NAFTA and chapter 11 of NAFTA extends this virtue abroad because it protects Canadian companies in other countries so that we can do business and not be discriminated against.

I cannot believe that a member can stand up in the House for 20 minutes and give a speech on something he clearly knows so little about.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I was quite surprised. I was not sure if my smear was that Wolfowitz had been corrupt or that he had engineered an illegal war, but I know I have certainly touched a soft spot with my Conservative friend and I am not surprised he is up defending chapter 11 so blindly. That is part of the ideological problem in the House.

I spoke about the specific issues of how chapter 11 is used again and again to basically undermine laws. He talks about how it gives us rights, but we have these rights before courts with our U.S. trading partners.

This takes away our rights, so that again we can have a numbered company constituted in Ontario that can suddenly claim it is American to take that outside the courts, to take that outside of a tribunal that is open, transparent and actually allows for briefs and counterclaims to be made, and gives it to three trade negotiators whose word is final.

If the hon. member thinks that is democratic, it is probably in keeping with the direction in which the Conservative government is going. However, the New Democratic Party certainly does not think that is democratic in any way and we certainly do not think it is in the interests of the Canadian public.

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, I thank my colleague from Timmins for providing some light on this subject because clearly after what we just heard, a lot of light is needed.

In fact, it was interesting in the deliberations at committee that there was reference to NAFTA and chapter 11. There was talk about NAFTA and chapter 11 with Canada and even the FTA with Chile. Most of our bilateral foreign investment protection agreements, the FIPAs, and this agreement are kind of at parallel purposes but the thing that is similar is what they do in terms of who gets to be heard.

The dispute settlement option that can be chosen by investors is in both the state of the investor and the host state of the investor, and their party to this agreement. What is fascinating, however, and that is to discern between these two kind of formats, the chapter 11 method and the method that we are describing today, is the transparency. What we do not get from the government is a clear indication of where the transparency is.

If we look at the trade agreements that have been passed and where the deals are done, given that Canadians I think value more than anything transparency and accountability, why does the member think that this particular arrangement is going through so quickly? It has been around since 1966 and all of a sudden there is a need to have this in place.

The previous Liberal governments, the Liberals are now supporting it, did not think it was something they needed to do but now they think it is the greatest thing. The current government thinks it is something that we have to have. In his opinion, why does the member think we are having to rush this thing through? What are Canadians going to benefit from it?