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

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, as of last April, Central America, South America, Nicaragua, Bolivia and Venezuela have given notice that they are trying to withdraw. There is one more and I apologize to my colleague, but I will get that to him.

As I said, this is not easy. We have concerns. Notwithstanding section 71 in the treaty, which says a country can withdraw, give notice, some of these countries and other commentators have suggested it is not only a matter of giving notice. They have to understand the implications and the blow back from corporations because they have invested so much in themselves to use as a mechanism. They could go after governments if they decided to pull out.

It is a matter of saying yes. Section 71 says countries can withdraw. I simply was noting that to say it was not as easy as just giving notice.

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

Mr. Speaker, I listened with great interest to my hon. colleague. On the issue of the credibility of the World Bank, we are here to rubber stamp this forum, yet the World Bank has caused damage on the international stage by its use of backroom trade pressure to undermine legitimate decisions by national sovereign governments.

I point to 2005 when Ecuador had part of its $100 million loan held back by the World Bank in punishment because it had the audacity to spend some of its own money on health and education. The World Bank thought that was an egregious abuse of the rights of investors, of people who were looking for this global race to the bottom. The World Bank has been the bully boy. It has destroyed good attempts at development by national sovereign governments.

Suddenly we in the House are supposed to accept the principle that the World Bank will arbitrate in a fair and open manner. It will not be open because dispute mechanisms will only be made public if both parties agree. There will only be binding third party briefs if both parties agree and it will be completely separate from any appeal process.

Does my hon. colleague not think it is a bit rich that at this time in our history with, for example, Naomi Klein's book The Shock Doctrine and with the incredible disgrace of Paul Wolfowitz, a good friend of the Conservative Party that has already risen to his reputation, we are now being told the World Bank is somehow an august, credible body in terms of international trade and fairness?

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, I thank my colleague from Timmins for his point which needs to be underlined. The question is, whose side is being represented here?

One of the things that I did not include in my comments is that the ICSID administrative council meets each year in the fall, which is at the same time as the World Bank gets together and the IMF has its annual meeting. The council is chaired by the president of the World Bank.

I watched the sad saga of Mr. Wolfowitz, the person who came in to say that he would clean up the corruption that was rampant in the World Bank. It was strange and bizarre to watch Mr. Wolfowitz trying to in some way explain himself and what he was doing when he hired one his friends and got her a contract. It was shameless.

Here we have a matter of being told to trust them. Why should Canadians put their trust in an institution like the World Bank which has had problems in deciding who is in charge? When someone was found to be corrupt, it had a hard time getting rid of him.

I would suggest that Canadians would be better served dealing with things here in our own jurisdiction and, until the World Bank can get its act together, that we do not go that route, that we keep things here as much as we can. We cannot always do it but in this case we are being offered that.

I have one final thing to mention which might be interesting to my friends from Alberta. Why is Alberta not signing on to this? Maybe Alberta has received some intelligence from Washington that this is not something it wants to get into because it might hurt the oil industry in some way if it were to submit its sovereignty to Washington. I do not know if that is the case but it would be interesting for my colleagues, if they have a chance, to answer the question of why Alberta is one of the provinces that does not want to sign on to this protocol.

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

Mr. Speaker, I appreciated listening to my colleague's comments on Bill C-9. He made an interesting point, which is that this bill on its own may not threaten Canadian sovereignty and may not lead to disaster but it is part of a pattern. The cumulative effect of these kinds of decisions is what is worrying Canadians and what is worrying other countries.

I want to ask the member specifically about the impact of this approach as we see in Bill C-9 on some third world countries, keeping in mind that this whole initiative is around helping developing nations, and specifically with respect to the role of the ICSID in challenging South Africa's affirmative action policies and the role of ICSID in the economies of Nicaragua, Bolivia and Venezuela, making them withdraw from the ICSID. We are talking about something bigger than has been suggested by the Conservatives, the Liberals and the Bloc, all of whom seem to support this approach. We are talking about some worrisome patterns. I would like the member to comment on that aspect.

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, my colleague is right in saying there are problems with it in terms of those countries which are trying to withdraw. The irony is that initially this was to be an arrangement that was to benefit countries in the southern hemisphere. After World War II and Breton Woods, and the setting up of the IMF, the World Bank was supposed to do the same thing.

I do not want to leave people with the impression that the New Democratic Party does not support the idea of these institutions. The problem is what happened to these institutions. The problem is they are not working for people.

Fundamentally the difference we have with the other parties is we believe that these institutions, in fact government itself, should be working for people and not the other way around. Instead, what has happened over a period of time is that these institutions have been tailored not to help people, but they have put corporations ahead. It is very interesting in international law when we look at the rights of people versus the rights of corporations. Corporations are trumping people time and time again. The effects are devastating. They are anti-democratic.

Instead of saying we believe in these institutions and that we should reform these institutions so that we can have trade deals that are going to help people and be fair, we see people who are involved in the business of lobbying and international lawyers who look out for the best interests of corporations and certainly themselves being able to change how these institutions work. That is so very sad.

The House resumed from January 28 consideration of the motion that Bill C-9, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention), be read the third time and passed.

[Vivian Barbot, Bloc, Papineau, QC]

Mr. Speaker, on May 15, 2007, I had the opportunity here in the House to talk about why the Bloc Québécois supports Bill C-53, which is identical to Bill C-9, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention). Today, therefore, I will talk about how international treaties are now typically drafted with no regard whatsoever for democracy.

I would like to begin by saying that the Bloc Québécois wants all treaties to go through the House of Commons. The current way of doing things completely disregards democracy. Bill S-5, which provides for the coming into force of tax conventions, shows how important international treaties are to our daily lives. These days, treaties are brought before Parliament only when they require enabling legislation.

In Canada, Parliament and parliamentarians play a minimal role in negotiating and ratifying international treaties. The federal executive controls all phases of the process. The executive is also responsible for what takes place in negotiations, which are, for the most part, secret. This secrecy is an important part of the federal government's negotiation strategy. Next to nothing, and sometimes nothing at all is disclosed before the parties sign an agreement in principle on the content and even the wording of the treaty. Even though the provinces are usually kept abreast of negotiations for trade agreements, they participate very little in the process and, with few exceptions, are totally excluded from the decision-making process.

Where international treaties are concerned, democracy is totally absent. There is no complete compilation of such treaties. Governments release them when and if they see fit, and people cannot be sure they are all being disclosed. The treaty section at the Department of Foreign Affairs does not even have a list of signed treaties to consult. The government is not required to table treaties in the House of Commons. It does not even have to inform the House or the public that it has signed or ratified treaties. The House does not get to approve treaties. The government can sign and ratify any treaty it wants without consulting the representatives of the people. At the very most, treaties requiring legislative changes are brought before Parliament before ratification.

In Quebec, since 2002, a vote in the National Assembly is required. Being in no way involved in the negotiation of treaties, the House of Commons cannot consult the public. It is therefore not surprising to see people increasingly expressing their opposition in the streets. In fact, there is no other place for them to be heard. The government is not required to consult the provinces either, even though it cannot implement treaties that concern areas of provincial jurisdiction and the provinces are not bound by the federal government's signature. It is totally absurd that no formal consultation mechanism is in place.

The government is preventing the provinces from being able to act internationally by controlling their international relations and by not allowing them to reach treaty-like agreements. This is unacceptable.

It used to be that international treaties governed relations between states and had little or no impact on how society functioned or on the lives and rights of citizens. At the time, it was acceptable for the government to unilaterally sign or ratify treaties.

Now, however, international treaties, especially trade agreements, affect the power of the state, the workings of society and the role of citizens. Furthermore, they often have an even greater impact than many bills. The Canadian treaty ratification process is not in line with this new reality. The people's representatives must be involved in decisions that affect the people they represent.

During the election campaign, the Conservatives promised to bring treaties before the House prior to ratifying them, but they still have not kept that promise. Recently, the government signed an investment protection agreement with Peru. This agreement is based on chapter 11 of NAFTA, which has been criticized by many. Yet the government concluded it without putting it to the House. When the House presses the government to honour its international commitments, as it has done in the case of the Kyoto protocol, the government does what it pleases, with no regard for the will of the people or the promise it made when it signed the treaty.

As was the case when Bill S-5 was passed, the fact that Bill C-9 will be passed quickly is an opportunity to show the government that democracy is not something to be feared when concluding fair treaties. The government must honour its promise to submit to the elected representatives any treaties that it intends to ratify, as it is forced to do here today with the three tax treaties. Once it has ratified them, it must honour them, as we hope it will honour the tax treaties we are discussing here today, and the Kyoto protocol, which the House is pressing it to honour.

This failure to involve the representatives of the people is an anachronism. It is impossible to tell from the division of legislative powers provided in the Constitution Act, 1867 which level of government, federal or provincial, has authority to sign a treaty with a foreign government. No provision is made in the Canadian Constitution for a jurisdiction anything like external relations or international relations. This is understandable, however, because when the Constitution Act, 1867 was passed by the British Parliament in London, Canada was still a colony of the British Empire. In 1867, the British Parliament reserved for the British Crown the power to represent the Dominion of Canada internationally and to enter into treaties with foreign countries on its behalf.

Under section 132 of the Constitution Act, 1867, however, the federal government was given responsibility for implementing, in Canada, treaties entered into by the British Crown, where these were applicable to this country.

In 1931, pursuant to the Statute of Westminster, Canada, as well as several other dominions of the British Empire, acquired full independence and, along with it, the authority to act with all the attributes of a sovereign state on the international scene. It was then that the federal government acquired jurisdiction over external affairs. Considered a royal prerogative when the Constitution was written, this authority was transferred to the government which, as the sovereign's representative, exercises it alone and without involving Parliament.

Once the governor in council approves an agreement reached between Canada and a foreign country, no matter who negotiated the treaty, that agreement becomes an international treaty. The representatives of the people do not have a say in it because the federal government has simply inherited a royal prerogative dating back to the British Empire.

Parliament only becomes involved when the ratification of a treaty requires an enabling statute. Canadian legislation may have to be amended because of the treaty. The legislative implementation of these treaties is the only occasion when Parliament has a say in the entry into force of a treaty in Canada.

It should be pointed out that many treaties requiring the Canadian state to adopt specific standards are not presented to Parliament for the adoption of enabling legislation. In such cases, the government believes that the Canadian legislation already conforms to the international obligations adopted or that the subject of the treaty does not require the adoption of new legislative provisions.

Consequently, no amendments are made to existing laws nor is a new law adopted by Parliament. For example, Parliament did not adopt legislation to implement or approve the ratification of the International Convention on the Rights of the Child. In such cases, the treaty never goes before Parliament.

In short, Canada is less democratic today that in was in the 20's. In June 1926, Prime Minister King introduced a resolution that was unanimously adopted by the House of Commons. It read as follows:

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

In 1941, Mackenzie King reiterated his commitment to this formula:

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, approval by resolution has been sought less and less. During the cold war, the government dropped the convention of seeking Parliament's approval before signing treaties or engaging in military intervention on foreign soil.

The government even stopped tabling treaties in Parliament. Except for the Kyoto protocol, not one treaty has been approved by resolution since 1966—over 40 years ago—and that was the Auto Pact. As for Kyoto, the government has refused to honour it. So much for democracy.

Furthermore, Canada is less democratic than the rest of the industrialized world. Most other major industrialized democracies support greater involvement of their parliaments in ratifying treaties. For example, the constitutions of France, Germany, Denmark, Italy and the United States require legislative approval of some types of international agreements prior to ratification.

Some countries that share constitutional traditions with Canada have tried to enshrine their parliament's role in examining treaties.

In the United Kingdom, a convention established in the 1920s, the Ponsonby Rule, requires the tabling of international agreements in both Houses of Parliament at least 21 days before they are to be ratified. This gives parliamentarians the opportunity to debate them before the government ratifies them, even though these debates are not binding. This kind of thing does not exist in Canada.

More recently, in 1996, Australia changed its procedure for concluding treaties. Under this procedure, treaties must be tabled in parliament at least 15 sitting days before any binding decision is made by the executive branch; a national interest analysis of the expected impact of the treaty obligations must be done, for each treaty, and tabled in parliament; a standing joint committee on treaties must be established to examine potential treaties and report on them. There is nothing of the sort in Canada.

As usual, Canada trails Quebec.

In Canada, the provinces pass laws in their constitutional fields of jurisdiction. As the British Privy Council ruled in 1937 in the labour conventions case, the provinces' legislative authority also extends to the implementation of international treaties.

As soon as a treaty or part of a treaty involves a provincial jurisdiction, the provisions in question can be implemented only by the provinces. Since 1964, Quebec has concluded some 550 international agreements involving many fields of jurisdiction for which it has full or partial responsibility, such as culture, economic development, drivers' licences, international adoption, the environment, science and technology, and communication.

For a major agreement to be binding, the Government of Quebec must first submit it to the Quebec National Assembly for approval. Only then will Quebec be bound by an international agreement entered into by Canada and agree to pass legislation to implement the agreement. Furthermore, under the legislation, Quebec's Department of International Relations must list and publish all of Quebec's international agreements. There is nothing of the sort in Canada.

The Bloc Québécois has introduced three bills on treaties to modernize the entire process for concluding international treaties.

The Bloc Québécois bill on treaties was designed to build transparency and democracy into the process of negotiating and concluding international treaties. Since such treaties have an increasingly large impact on our lives, it was more important than ever to make such a change. Moreover, the bill required that the federal government respect the provinces' jurisdictions.

The bill provided for five changes: all treaties were to be put before the House of Commons, the House was to approve important treaties, a parliamentary committee was to consult civil society before Parliament voted on important treaties, treaties were to be published in the Canada Gazette and on the Department of Foreign Affairs website and the government was to consult with the provinces before negotiating a treaty in an area of provincial jurisdiction.

The treaty bill came to a vote only once, on September 28, 2005. All the federalist parties voted against it.

No strangers to contradiction, the Conservatives made two promises about international treaties during the last election campaign. They promised to put international treaties before the House prior to ratification and to give the provinces a role in concluding treaties pertaining to their jurisdictions. Both these promises were broken.

Since they were elected, the Conservatives have amended NAFTA. They have signed two investment protection agreements based on NAFTA chapter 11, one of which has been ratified. They have concluded a military cooperation agreement to authorize British soldiers to train in Canada. They have signed cooperation agreements on higher education, even though education does not come under Ottawa's jurisdiction. They have concluded an agreement to facilitate technology transfers from Canada to China. And they have amended the free trade agreement with Chile.

Aside from the amended NATO treaty, which was brought before the House at the last minute for a mini-debate and vote, none of these international treaties has come before the House.

And where is the nation of Quebec in all this? The federalist parties say they rejected the Bloc Québécois bill because of two clauses, 4 and 6.

First, clause 4 provided for a mechanism for consulting with the provinces:

Canada shall not, without consulting the government of each province in accordance with the agreements entered into under section 5, negotiate or conclude a treaty

(a) in an area under the legislative authority of the legislatures of the provinces; or

(b) in a field affecting an area under the legislative authority of the legislatures of the provinces.

As for clause 6, it recognized the validity of the Gérin-Lajoie doctrine:

Nothing in this Act in any manner limits or affects the royal prerogative of Her Majesty in right of a province with respect to the negotiation and conclusion of treaties in an area under the legislative authority of the legislatures of the provinces.

The clause on consulting Quebec and the provinces is nothing revolutionary. When the federal government discusses, in an international forum, the text of a treaty having an impact on the provinces, then it consults the provinces beforehand.

Under an agreement concluded in 1975—and still in effect—between the Trudeau government and the provinces, Ottawa consults the provinces at every stage of the negotiation of treaties involving human rights.

Every federalist party in Ottawa is more centralist than Pierre Elliott Trudeau on the issue of international relations.

It is not just a Bloc Québécois bill that the federalist parties have rejected, it is a Quebec law. Section 22.1 of the Act respecting the Ministère des Relations internationales requires the consent of the Government of Quebec with respect to the signing, ratification or adherence by the Government of Canada, before the latter acts internationally on any agreement concerning matters under Quebec's constitutional jurisdiction.

As far as the section recognizing the provinces' right to negotiate and conclude international treaties in their jurisdictions is concerned, it was simply a recognition of the Gérin-Lajoie doctrine which every Government of Quebec has been following since 1965.

The Gérin-Lajoie doctrine is closely linked to Quebec's independence: the provinces are completely sovereign within their jurisdictions and they must exercise their authority over the entirety of their jurisdictions, which includes signing and ratifying international treaties.

In closing, these are some of the arguments in favour of more involvement by parliamentarians in the negotiation and ratification of international treaties for the good of democracy.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, as the member is probably aware, members of the NDP oppose the bill because of our concerns about it. The bill in and of itself, in terms of the process that it outlines for the settlement of investment disputes, is not so bad as far as it goes. However, we are very concerned about the larger context of the bill, its relationship to the World Bank and the involvement of multinational corporations.

One of the things we have raised in the debate on Bill C-9 is that the ICSID process does not allow for third party testimony except where there is consent from both parties in the arbitration, which is not necessarily easy to get. This has been held up as one of the serious concerns about this process. It makes the whole dispute mechanism, which is meant to be transparent, accountable and open, very inaccessible to local communities and third party stakeholders that may have a lot to say about representing a public interest in this process.

Could the member comment on that? Does she and members of her party also have concerns about that?

From our point of view, we think it will affect southern developing states most of all and will further marginalize developing countries in these transborder processes. It really eliminates the genuine and meaningful input of third party testimony of stakeholders and local communities, so the whole process becomes meaningless because they are in effect cut out.

Would the member comment on that?

[Vivian Barbot, Bloc, Papineau, QC]

Mr. Speaker, I thank my colleague for her question. In fact, there are certain limitations in this type of treaty.

What I was trying to highlight in speaking about the context in which these matters are dealt with—and I did point this out—is that, on the one hand, civil society has no input and, on the other hand, even we as parliamentarians who represent civil society, do not have the opportunity to debate these treaties. This occurs in a context where it is the government that decides. Obviously, when the mechanism itself is included in these treaties, there may be some elements that are problematic. However, we believe that these treaties are much better than the current situation. It still represents a step forward in the resolution of conflicts that may arise from international treaties.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I congratulate the member for her excellent address to the haggis last night.

At the beginning of the member's speech, she mentioned consultation with the provinces and territories in advance of such treaties. My understanding is that she was suggesting there was no consultation with the provinces and territories. If she asked federal employees in the Department of Foreign Affairs, they would tell her that they do consult with the provinces and territories about treaties affecting them.

Does the member believe no consultations are held with the provinces and territories when treaties are being negotiated?

[Vivian Barbot, Bloc, Papineau, QC]

Mr. Speaker, my understanding is that these consultations are just informal. The government has no official, legal obligation to consult the provinces and take their opinions into account. The provinces are not bound at all by these treaties when their areas of jurisdiction are involved. The government can make any decisions it wants because it has no obligations.

The provinces, in turn, are not bound unless they decide to ratify the treaties. In Quebec, if the government is asked for its opinion, it is obliged to check things out and bring all the necessary documents before the Assembly chamber. The chamber makes a decision and, at that point, Quebec is bound. It is the province that ratifies. This is what I meant when I said that there were no consultations.

Public officials talk to each other, of course, to learn what the effects will be, but regardless of what the provinces say, the central or federal government can sign the treaties it wants. However, it is the provinces that implement them, and the provinces can decide not to do so. This does not limit in any way the federal government’s power to sign these treaties.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, first I would like to congratulate my colleague on her speech. I wanted quickly to remind her that in question period yesterday in the House, a Conservative asked a question of the foreign affairs minister about international treaties, claiming that the Conservative Party was more open and transparent. He said: “—we committed to bringing international treaties before the House of Commons to give Parliament a role in reviewing them”. Note the use of the word “review”.

The foreign affairs minister, boasting about fulfilling another election promise, said: “Effective immediately, any international treaty we sign will be tabled in the House of Commons”.

I want to ask my colleague, therefore, where she sees any transparency in this and any ability of the House to really discuss treaties that have been signed by the government but are not brought before the House to be ratified but just to be presented and reviewed. We are still very far from parliamentary democracy.

[Vivian Barbot, Bloc, Papineau, QC]

Mr. Speaker, I thank my hon. colleague for this question. Naturally, what the member said yesterday caught my attention. This is another example of the current Conservative government's clever ways of saying one thing and then the very opposite. The government says it will honour its promise and that it will allow “reviewing”. Yet, given this choice of vocabulary, one can clearly see that this leaves no room for real discussion before the treaty is signed or ratified.

We are facing exactly the same situation as their promise concerning UNESCO. These are half-measures that do not resolve anything. Yet, the government uses them to say that it is delivering on something it had promised. Each time, we are disappointed, since the reality is at odds with the terms used. This is a perfect example of what I would call a lack of democracy.

To some extent, actually, it makes no difference if we are told that, from now on, Parliament will have its say, because, if we take a closer look at the situation, the government is facing a fait accompli. It is just more of the same.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, this is also the second time I have spoken on this bill. As we already know, from what my colleague from Papineau has said, the Bloc Québécois supports Bill C-9 in principle.

Passing this bill will mean that Canada can ratify the Convention on the Settlement of Investment Disputes between States and Nationals of Other States and join the International Centre for Settlement of Investment Disputes.

Because I will be making frequent reference to the International Centre for Settlement of Investment Disputes and the name is a little long, I will call it simply the centre in my speech.

Bill C-9 incorporates the requirements of the convention into domestic law, two reasons being to ensure compliance with arbitral awards and grant the immunities that the centre and its staff need. The centre was created by the World Bank in 1965 under the Treaty of Washington. At present there are 156 member countries. The centre is responsible for arbitrating disputes between a state and a foreign investor.

There are two potential kinds of conflicts: first, there are disputes relating to compliance with bilateral foreign investment protection agreements, and second, there are disputes relating to agreements between governments and foreign investors. These are agreements of the kind that the Government of Quebec and other governments regularly enter into to encourage foreign investment, with the promise, for example, to supply electricity at an agreed price.

Canada’s membership will have no impact on the provinces and Quebec, other than that they will also be able to allow for recourse to the centre when they enter into agreements with investors. The bilateral treaties signed by the federal government already provide for recourse to arbitration by the centre, but by way of the supplementary arbitration mechanism rather than a regular mechanism, which is available only to countries that have ratified the convention.

In fact, the only thing that Canada's joining the centre will change is that it will be able to participate in negotiations to amend the centre's convention or by-laws and will have the assurance that it may participate in appointing arbitration tribunals. There will therefore be direct participation in the centre. Ultimately, the centre is merely a tribunal, and the problem is not the tribunal, but the bad investment protection treaties that Canada signs.

The Bloc Québécois supports signing investment protection agreements as long as they are good agreements, obviously. It is entirely reasonable for an investor to try to ensure, before making an investment, that he or she will not end up losing his or her property, and will not be discriminated against. That is the situation that foreign investment protection agreements are intended to govern. This is not a new phenomenon. The first known agreement containing provisions relating to the protection of foreign investments was the agreement between France and the United States signed in 1788, over two centuries ago.

In May 2007 there were over 2,400 bilateral investment protection agreements in the world. If we add the tax conventions dealing with the tax treatment of foreign investments and income, there are about 5,000 bilateral treaties relating to foreign investments. The Bloc is in favour of signing agreements like this and recognizes that they promote investment and growth. These agreements are all based on more or less the same principles.

The first principle that could be mentioned is respect for property rights regardless of the owner's nationality. Second, there can be no nationalization without fair and prompt financial compensation. Third, there is a prohibition against treating property located within a country's territory differently depending on the owner's origin. Finally, there is free movement of capital resulting from the operation and the disposal of investment.

In every case, when these rights are violated, states may submit disputes over compliance with an agreement to an international arbitration tribunal. In the majority of cases, investors themselves may submit the dispute to an international tribunal, but only with the consent of the state. In many cases, the international arbitration provided in the agreement takes place before the ICSID. By belonging to it, as Bill C-9 provides, we are also agreeing to an international order in the field of investment.

In the investment protection agreements that they sign, only two countries, Canada and the United States, systematically grant investors the right to appeal directly to international tribunals. This is 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.

The agreements that Canada signs contain a number of similar deviations, giving multinationals rights they should not have and limiting the power of the state to legislate and take action for the common good. Take, for instance, the now infamous chapter 11 of NAFTA, which provides that a dispute can go to ICSID. There are, however, three things wrong in that chapter: the definition of expropriation, the definition of investor, and the definition of investment.

The definition of expropriation is so vague that any government measure, except for a general tax measure, can be challenged by foreign investors if it diminishes the profits generated by their investments. Indeed, a Kyoto implementation plan which would have large polluters such as oil companies pay dearly could be challenged under chapter 11 and result in government compensation.

American companies have majority interests in Alberta oil companies. Chapter 11 opens the door to the worst kind of abuse of process. The definition of investor is so broad that it includes any shareholder. Anyone could therefore take the state to court and seek compensation for a government measure that allegedly cut into a company's profits.

As for the definition of investment, it is so broad that it even includes the profits that investors hope to derive from their assets in the future. In the case of expropriation, not only does the state find itself forced to pay fair market value, but it also has to include future revenues that investors expected to draw. This would make nationalizing electricity, as Quebec did in the 1960s, impossible.

Take the example of SunBelt, a corporation with one Canadian shareholder and one Californian shareholder. This corporation closed its doors when the Government of British Columbia removed the right to export water in bulk that it had been granted. Under Canadian law, the Canadian shareholder received compensation equivalent to the value of his investment: $300,000. Under chapter 11 of NAFTA, the American shareholder included in his claim all potential future revenue from the sale of water, for a total of $100 million. For better or for worse, the case was settled out of court for an undisclosed amount that is not likely to ever be disclosed.

Given the amounts of money at issue, chapter 11 acts as a deterrent to any government action, particularly with respect to the environment, whose effect would be to reduce the profits of a foreign-owned corporation. The dispute settlement mechanism allows corporations to apply directly to the international tribunals to seek compensation, without even having to obtain the consent of the state.

Is it conceivable that a multinational corporation would be able, on its own initiative, to instigate a trade dispute between two countries? And yet that is the absurd situation that the chapter of NAFTA on investments allows. Given these flaws, chapter 11 of NAFTA reduces a state’s ability to take action for the common good and to enact environmental legislation, and amounts to a sword of Damocles that can come down at any moment on any legislation or regulations that might have the effect of cutting into corporate profits.

In 2005, the United States changed some of the provisions of their standard investment protection agreement. In 2006, Canada did the same. Because the two countries have now recognized the harmful and extreme nature of chapter 11 of NAFTA, the time is right for the government to act quickly to initiate talks with its American and Mexican partners to amend chapter 11 of NAFTA. We have to say no to bad investment protection agreements.

In addition to chapter 11 of NAFTA, and despite universal criticism of how extreme it is, the government has signed 16 other bilateral foreign investment protection agreements that are carbon copies of it. All of those foreign investment protection agreements are bad and should be renegotiated.

In 2006, the government gave some indication that it recognized that these agreements were bad. The Conservative government copied the changes made by the Bush administration the previous year, and in fact made changes to Canada’s FIPA program to fix some of the most glaring problems. It clarified the concept of expropriation by specifying that a non-discriminatory government measure designed to protect health and the environment and to promote a legitimate government objective should not be considered to be expropriation and should not automatically result in compensation.

It is too soon to assess the actual impact of that clarification, but at first blush it seems to be an improvement. It has narrowed the concept of investment by specifying that the value of property is equal to its fair market value. This puts an end to the madness of adding in all of the potential profits the investor hoped to earn from his or her investment. For the rest, the standard investment protection agreement continues to be modelled on chapter 11 of NAFTA.

The government must continue to improve this standard agreement, particularly as it relates to the dispute resolution mechanism. Multinational corporations must be brought back under public authority, as any individual is.

As well, the government should submit international treaties and agreements to the House before ratifying them. That is what we are being promised and it is what I referred to earlier, but is the purpose really to have a substantive discussion? Is it really a discussion to learn the benefits, the opportunities, perhaps, or the harm that might be caused to certain industries in Canada and Quebec?

Yesterday, the government seemed to be saying that the question of ratification was up for discussion and study, but is it going to ratify without the House having really come down for or against a specific agreement?

Early last year, the government issued a press release announcing that it had just ratified a new foreign investment protection agreement with Peru. Parliamentarians and the public learned about the agreement when they read the release. Parliament was never informed about it. It never approved it. That is completely anti-democratic.

In the last election, however, the Conservative election platform was clear: the Conservatives committed to submitting all international treaties and agreements for approval before ratifying them. That is not what we heard yesterday in this House: what was said was that they would be presented to the House and the House would be made aware of them, but the Conservative members, including the minister, never said that the House was to ratify them.

Since the Conservatives came to power, Canada has ratified about 26 or 27 international treaties. Except for the amendment to the NORAD treaty, which was the subject of a brief last-minute mini-debate and a vote, none of these international treaties were brought before the House.

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 without the participation of the representatives of the people.

In the past, the Bloc Québécois introduced bills to restore democracy and ensure respect for the jurisdiction of Quebec and the provinces in the ratification of international treaties. Given that this is something the government promised to do, we did not bring it up again. However, today we see that a Conservative promise is not worth much.

So the Bloc Québécois will once again take this matter up and will make proposals to bring democracy back into the ratification of international treaties. The government must have an obligation to submit to the House all international treaties and agreements it has signed before ratifying them. The government must be required to publish all international agreements in which it is involved. The government must also allow the House to vote on and approve all major treaties, following study by a special committee responsible for reviewing international agreements, before ratifying them. The government must also respect the jurisdiction of Quebec and the provinces throughout the treaty-making process at the negotiation, signature and ratification stages.

In conclusion, the International Centre for the Settlement of Investment Disputes is needed to ensure that States are treated fairly in their dealings with multinational corporations. We must also ensure that the agreements Canada signs are good ones that respect all stakeholders.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, this particular law would protect employees in Canada and in many countries from arbitrary actions by governments that are not as predictable and do not have the formal procedures that Canada has. I think the member's party agrees with that.

In relation to his question about chapter 11 not allowing environmental regulation, does he have any specific examples of that occurring that he could give to the House?