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.

Food and Drugs Act

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a privilege to speak on Bill C-51, An Act to amend the Food and Drugs Act.

When we lay the grounds for legislation, it is important that we have confidence in the regulatory process and the ability to ensure that we are going to have accountability with this change to the act.

There has been a lot of discussion today about Bill C-51 and a good debate about its consequences. There is one thing I want to remind the House about, which creates the insecurity I wrestle with. I certainly am not going to be supporting this bill any further. I believe that the arguments have been well laid out as to why we cannot continue to move this forward. The legislation needs some fundamental changes.

I do not have any confidence that the drug industry is going to be subdued in this process. Let us look, for example, at the direct marketing that is going to happen with this bill. It goes back to an experience that I had here on the Hill in 2004 when we started looking at what I believe was Bill C-9 at that time, the Jean Chrétien Pledge to Africa Act, to provide help for AIDS in Africa. It was the precursor bill of Canada's Access to Medicines Regime.

The bill's purpose was to provide drugs to those developing countries that might be facing issues related to HIV-AIDS, tuberculosis, malaria and other types of diseases that were affecting civil society. The contemplation of the bill came through an international treaty that allowed the generic production of different types of medicines to proceed, medicines that may have already had a patent restriction on them, if the actual pharmaceutical company would not provide them at a low cost to those nations.

We went through a whole series of processes and lobbying at that time. There was a very powerful lobby by big pharma to stop that bill dead in its tracks. There was some political support to try to move it forward. What ended up happening is that big pharma got a provision in the bill that was not even part of the internationally signed agreement with the TRIPS and the Doha.

Where we actually could have provided any available drug to go forward, we created this artificial list of what drugs would be available to be sent overseas and which ones would not be. The danger behind this was that it allowed for lobbying to keep certain drugs off the market.

Many people said not to worry. They said that would not happen, that it would not be ethical and that the companies would not do this. We were told that the companies would behave themselves.

To make sure this would not happen, there was a provision in the legislation to make sure big pharma would not be doing it. Lo and behold, even as we were doing that, big pharma was caught lobbying, including by me. It was exposed. It made headline news that the pharmaceutical companies were already lobbying to keep some of the drugs off the market. This plan fell flat on its face.

This is what I am concerned about with regard to this bill and how we go forward. I am concerned about the active lobbying and also the prescriptive behaviour that can take place with drugs. This could actually affect everything from safety to health care costs. Also, we kind of have a self-prescriptive society. The commercials have hit the Canadian airwaves already. They are very clever. They have been done very well. Probably they should win awards, because everyone knows what is happening but they get around the technicalities.

At the same time, these commercials lead people to go to their doctors. The doctor may prescribe some type of medication or may want to provide some type of generic alternative. Then the patients perhaps insist that they know the actual effects better. It can create longer wait times, make people potentially consider changing doctors, or other types of behaviour.

This concerns us, because I certainly would hate to see the cost of drugs rise, some of which have already skyrocketed, based on marketing and advertising campaigns and influence from the drug companies. That is important to note, because we already know that women generally suffer the consequences from prescription errors. This problem actually could expand. We believe what the experts have said. They have noted this vulnerability in the system that is being proposed.

One of the other things that we have identified as very important with regard to this case is the issue related to the lack of parliamentary oversight. The fact of the matter is that this bill is going to give more provisions for the government to be able to override the parliamentary process and for the minister to have expanded powers.

That is a concern because what we have seen with this administration is very much a centralized ideology. That has been its choice of how it wants to govern and that is fine, but at the same time, it opens up the probabilities for greater control. And it may not even be necessarily this administration that does it in the future.

I am suggesting that in the future we could once again have these types of control elements that really change the nature of how we actually have drugs administered in our society. This is another reason that New Democrats are saying at this point that we do not want to change the law right now.

Another thing I wanted to connect to right now is that we seem to be moving to a less regulatory society in some respects. Some of that is of great concern. I can tell members about it based on my background in the transportation sector. For example, in rail and air when we have been moving to safety management systems and letting the industry police itself, and there is going to be more of that with this type of bill, we have seen what is really very much a falling out of safety in many respects.

For example, there is the transportation sector. We just did a complete study. There was a panel. We talked about a culture of fear and intimidation that prevents the actual workplace from operating the SMS properly. What we have actually seen is a step back in rail safety over the last number of years as we have had increased problems.

We are really worried about having the regulatory body become more involved with regard to policing itself. What we would say is that we need to have a stronger involvement by Health Canada.

We have seen these actual situations in the past in our society. It is not just Canada that has this problem. It is in the United States as well, where active lobbying has put drugs on the market that do not necessarily meet the tests of the day and have to be recalled. That includes everything from a series of drugs related to heart medications to others such as breast implants. There are the tragic circumstances with thalidomide. These have had consequences. I think we are going to witness greater problems there.

There is a legitimate problem that we have in this country with regard to getting some of the drugs and medications to market. The hope for this bill is that it will expand those opportunities, but it is very much based upon a risk management cycle. Once again, that risk management, left in the hands of the industry for the most part, is something that gives us some trouble because of the influence.

I have witnessed it myself, as I mentioned, with Bayer doing the actual lobbying to keep some of its drugs off Canada's Access to Medicines Regime. That was even at a time when there was heightened awareness and there were actual hearings going on in Ottawa. There was discussion about that bill. There were a lot of politics around it and active lobbying on behalf of NGOs, the generics and the pharmaceutical companies. The spotlight of the nation was on this and they broke the rules at that particular time with no hesitation. They were not apologetic about it.

So when we move into this type of system, we have a lot of concerns, because it will not just be the attention that is being provided right now. It will also be later on, as the politics about the bill wind down, where the regulatory regime and the oversight are so necessary, because then what we will probably be faced with, unfortunately, is a clawing back of decisions that caused problems for Canadian consumers and their health.

With regard to health products, I know that the Natural Health Product Protection Association has been very adamant about changing the way the system is being done here. Unfortunately, this is a regressive step. I have seen a lot of emails and letters and have had phone calls come in, not only just to my office but also in the Windsor and Essex County region. They are from people expressing disappointment with the government for not adequately fixing their situation. This bill is going to compound their situation so they certainly are not supporting this.

Therefore, with the way this is right now, what we are calling for is to make sure that we actually have a new bill. I know that the government is intending to table some amendments and it is positive that the government is actually looking at some of the weaknesses of the bill, but we believe the bill is far too weak in many respects. We should be re-entering a debate and forming a bill that is going to work.

[John Whyte, Professor of Law, College of Law, Law Foundation of Saskatchwan, University of Saskatchewan, As an Individual]

Thank you, Madam Chair.

I want to begin by saying that it is a great privilege to be invited to participate in the deliberations of a national government, and I thank you for this invitation.

There is no doubt that the composition of the Parliament of Canada is anomalous. It is unsuited to prevailing principles of political legitimacy. This unsuitability arises from the appointment, not the election, of members of one of the two legislative chambers in a bicameral legislative arrangement; that is, a legislative arrangement whereby each house has the right to veto legislation.

It might be a mistake, however, to see this situation as an acute derogation from the democratic principle as it is typically worked out in complex rule-of-law states. There are always competing statecraft considerations, some that make the appointment of senators tolerable in a democratic state.

First, senators are appointed by the government, and therefore appointments reflect majoritarian preferences. They hold office for life, so the Senate provides a forum less dominated by intense political rivalry that arises from imminent elections. In recognition of the higher democratic legitimacy of the Commons, the Senate is generally careful and restrained in its exercise of veto.

The purpose of the appointed Senate is to represent divisions, regional and provincial, that are less well reflected when there are closer party ties.

The function of the appointed chamber is to consider legislation on bases less partisan than those in the Commons, in which the defeat of a measure can trigger an election.

As Bill C-20 says, it is “a chamber of independent, sober second thought” and there is a good reason for it. Indeed, the composition of the Senate is anomalous, but it is not statecraft without good purposes. It is not something that a democracy like Canada cannot tolerate.

Nevertheless, the case for changing it in order to establish ongoing democratic accountability for legislative actions is strong. A democratic state is one in which popular approval of lawmakers is the norm.

But the changing of the Senate needs to be carefully considered. My friend Professor Mendes has already told you what he thinks are the possible downstream imperfections that are likely to be produced by this change and other changes.

Here are some sensible questions. If elections are not for a term, but until age 75, in what way is ongoing democratic accountability actually enhanced? If term appointments are for 15 years non-renewable, again how is accountability enhanced? Is not the basis on which senators are currently appointed their support by a political party? And is that not the same basis upon which we put people on a ballot for election? And is not the appointer of the senators the party that generates the most votes? And are those not exactly likely to be the senators who win in the consultation process? Are we actually changing anything?

If the Senate is designed to reduce partisanship in the consideration of legislative proposals, will the proposed electoral process undercut that aim? If the Senate is meant to reflect regional interests, will the force of party discipline and loyalty that is generated through elections diminish that purpose? If the fact of appointment of senators creates a restraint on the Senate to not normally frustrate the Commons, will this restraint disappear with electoral choice? Will the rules of responsible government collapse? Will the underlying requirement that a government must be able to achieve its legislative agenda disappear?

But as sensible as these concerns are, as appropriate as it is to worry about what we might be doing with Bill C-20, the bigger question is actually about process. In the past 22 months the nation has been faced with three government initiatives of major constitutional significance with respect to the basic structure of our national Parliament: the idea of term limits on Senate appointments; the refusal, except in one case since the formation of the current government, to fill Senate vacancies; and finally, the establishment of electoral consultations for the appointment of senators. Each of these initiatives presents serious questions concerning constitutionality.

I believe the first violates section 38 of the Constitution Act, 1982. The second clearly continues to violate by the day section 32 of the 1867 Constitution, where there is a mandatory requirement to appoint senators on vacancy. And the last, the one we're considering today, violates sections 42 and 38 of the 1982 Constitution.

Moreover, each alters or will alter the way Parliament works, the way the branches and agencies of the national government represent and reflect interests, the way that interests will be accommodated, and the way political relationships operate. All of these changes in the structure of government are occurring without analysis, debate, or choice among alternatives. We are experiencing an attempt to reconstitute the national Parliament in the absence of constitutional discourse. This makes sense, of course, if the government wishes to precipitate change, any change, but is indifferent to the effects of that change, notwithstanding the permanence of the changes that are being made.

One of the reasons we have a Constitution and a constitutional amending process is to force governments that simply wish things were otherwise not to unilaterally make changes without reasoned debate and the careful building of consent that is meant to be part and parcel of constitutional politics.

It may be that it is cumbersome or inconvenient to amend the Constitution to provide for an elected senate, but making it cumbersome and inconvenient to change a law or process is of course the purpose of putting that law or process into the Constitution in the first place. The inconvenience of changing the law is designed precisely to force us to have those inconvenient conversations that we might not otherwise have, except for the fact that for one reason or another our predecessors judged it was important that we do so.

In this case, we know the reason of our predecessors. It was part of the Confederation bargain with the existing political communities of Canada—an agreement, by the way, whose force and moral meaning in our nation is not spent. Our fidelity to the constitutional text and process dictates that we live with the determinations made by our predecessors. If we want to change Canada’s Parliament, we must engage in the constitutional processes set out in part V of the Constitution Act, 1982.

I don't want to be naive about this. Intergovernmental constitutional reform of the sort required by sections 38, 41, and 42 is likely to be held up by traditional demands: from Quebec, amendments that could produce Quebec’s consent to the 1982 Constitution; and possibly, through convention, from national aboriginal organizations demanding participation and inclusion in the reforms.

Of course, it might be even more difficult than we imagined. Any change to the Senate may well affect the provisions relating to Quebec alone, the ones relating to regional representation from within the province, and might not be satisfied merely by consent of a seven-and-fifty formula but would require Quebec's actual consent. I don't mean to minimize the difficulty.

This difficulty gives rise to the belief that there must be some route for legislated Senate reform. But there isn’t. We need to be nation enough to conduct these inconvenient discussions. We might benefit from them.

When I spoke to the Senate a year or so ago on Bill S-4, I said that the situation of general discomfort with the current Senate, the apparent small space available for unilateral constitutional amendment, the simple appeal to democratic values, and the mistaken popular sense that the Senate is not terribly significant in national governance have all worked to license constitutional reform that may be initially appealing but is being pursued, I think, irresponsibly.

Turning specifically to Bill C-20, the plan to seek electoral advice on whom to appoint to the Senate is quite simply a change in the method of appointing senators: the precise language of paragraph 42(1)(b) of the Constitution Act, 1982, the precise matter that is precluded from unilateral federal change.

There are four reasons legislative reform through Bill C-20 is constitutionally difficult.

First, paragraph 42(1)(b) talks of the ”selecting” of persons for appointment, not the means of appointment. The method of selection will now be that government will consider—and under the normal imperatives of electoral politics—only those who win elections to determine who should be selected for Senate appointment.

Is it not ironic that in seeking to justify this initiative to democratize the Senate, the reformers assert, and must assert, that they do not at all consider themselves to be bound by the democratic process they now so badly want?

Second, by section 32 of the Constitution Act, the discretion to determine who is fit and qualified to be appointed to the Senate is assigned to the federal cabinet--it says the Governor General, meaning the cabinet. Bill C-20 has constructed an electoral mechanism to advise the Senate as to who should be appointed.

A clear constitutional responsibility specifically assigned to a particular agency of government is to be eroded or constrained by another element of public government--the electors. In administrative law we say that the statutory decision-maker has declined its jurisdiction, or it has submitted to dictation from an external source, or it has fettered its discretion. These actions are all ultra vires.

Of course, it will be argued that the consultation process and its results will not curtail cabinet discretion, and that consultation is not designed to limit the list of those considered for appointment, but to add names to that list--one that also contains names not resulting from election.

If one reads Bill C-20 one will see it is not believable that consultation will not determine for the cabinet who is to be selected. The size of the process; the visibility of the process; the context of a federal general election and its heightened political engagement, in most cases; the political energy and the higher public attention paid to province-wide votes--bigger votes than any member would ever experience--all preclude the possibility of cabinets disregarding these electoral results.

The saving clause of Bill C-20, that this process is to ascertain the preferences of electors on appointments to the Senate “within the existing process of summoning senators”, does not save the bill’s constitutionality. Indeed, the precise process of summoning--orders in council--is not altered. It is the method of selecting senators for summoning that the government seeks to alter, and that is exactly what paragraph 42(1)(b) states must be accomplished by formal constitutional amendment.

Third, the electoral process in the bill does not satisfy the specific requirements relating to appointing senators from Quebec. Arguably, the cabinet could overlay the electoral process in the new act with the constitutional constraint that all Quebec appointments will match the electoral districts to be represented, but in province-wide elections this is not likely to be possible, barring, of course, the decision to simply ignore subsection 23(6) of the Constitution Act of 1867. In fact, that would have to happen, since Quebec would not tolerate a voting system that was not followed in Quebec alone.

There are other differences between Bill C-20 and the Constitution. There are differences relating to qualifications, citizenship, and age. There's the difference between section 32, which makes appointments mandatory, and Bill C-9, where it makes the convening of a consultation process discretionary. There are significant differences between the constitutional requirements and the process established by Bill C-20. This is not necessarily unconstitutional. In operation, the chances of its being unconstitutional are almost absolute, but it is not necessarily unconstitutional because it's possible that the administrators of Bill C-20 will ignore, in order to comply with the Constitution, all its provisions. This seems unlikely.

Finally, the Constitution is not a tax code. It requires fidelity to its structures, its relationships, its designs, and its principles. The proponents of the amendment have admitted that they are unable to institute an election process since they have taken what is obviously an election process, kept all its attributes, and then changed it to a “consultation”. Then, in the “whereas” clauses, they seek to deny both the purpose and the effect of the legislation. The process they call consultation is in fact an election in everything but name.

It would bring Parliament into disrepute, and it would do grave damage to the Constitution, to our constitutional commitments, and to the rule of law, if Parliament attempts an obvious and self-confessed sleight of hand to amend the Constitution in contravention of amending provisions.

Royal Assent

[The Acting Speaker, Conservative, Royal Galipeau]

Order, please. I have the honour to inform the House that a communication has been received as follows:

Rideau Hall

Ottawa

March 13, 2008

Mr. Speaker:

I have the honour to inform you that the Hon. Morris Fish, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy of the Governor General, signified royal assent by written declaration to the bills listed in the schedule to this letter on the 13th day of March, 2008 at 4:29 p.m.

Yours truly,

Sheila-Marie Cook,

Secretary to the Governor General and Herald Chancellor

The schedule indicates the bills assented to were Bill C-9, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention)--Chapter 8; Bill C-42, An Act to amend the Museums Act and to make consequential amendments to other Acts--Chapter 9; Bill C-48, An Act for granting to Her Majesty certain sums of money for the federal public administration for the financial year ending March 31, 2008--Chapter 10; and Bill C-49, An Act for granting to Her Majesty certain sums of money for the federal public administration for the financial year ending March 31, 2009--Chapter 11.

Business of the House

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

Mr. Speaker, since this is the first Thursday question of the year, I want to formally welcome everyone back to the House of Commons. Hopefully, we will be even more productive in 2008 than we were in 2007.

Judging by the first sitting day, I think we will be.

So far, the House has passed Bill C-8, on railway transportation, and Bill C-9, on the settlement of investment disputes.

Moreover, Bill C-31, An Act to amend the Judges Act, and Bill C-27, on identity theft, have been referred to committee.

This is a rather good start.

We hope to keep up that level of productivity by quickly passing our legislation to strengthen the security certificates process, which started debate at report stage today. That is of course Bill C-3. We now have a House order to assist us in facilitating that debate. We will continue to debate the bill until report stage is completed.

While all members of the House do not understand the importance of the bill, I believe that the official opposition does. I hope that we can work together in a spirit of cooperation and bipartisanship to have it passed before the date identified by the Supreme Court of Canada as the date by which it would like to see the law passed, February 23.

Following Bill C-3 tomorrow we will continue with the unfinished business from this week, namely Bill C-33, renewable fuels; Bill C-39, the grain act; Bill C-7, aeronautics; and Bill C-5, nuclear liability.

Next week will be a safe and secure Canada week.

Debates will continue until the bill is passed by this House.

After that, we will debate Bill C-25, which would strengthen the Youth Criminal Justice Act, and Bill C-26, which imposes mandatory minimum penalties for producers and traffickers of drugs, particularly for those who sell drugs to children. We also hope to discuss the Senate's amendments to Bill C-13, on criminal procedure.

Finally, in keeping with next week's theme, I would suggest that my hon. colleague opposite explain to his colleagues in the Senate the importance of quickly passing the Tackling Violent Crime Act, the bill which is overwhelmingly supported by Canadians across the country, and which was the number one priority of the government throughout the fall session of Parliament and which passed this House last fall. It has already been in the Senate longer than its entire time in the House of Commons, yet the Liberal dominated Senate has not even started committee hearings on the Tackling Violent Crime Act.

While the elected accountable members of the House rapidly passed the bill, which I would like to remind everyone was a question of confidence, unfortunately it looks like the unelected, unaccountable Liberal dominated Senate is up to its old tricks again of delaying and obstructing in every way. Let me be clear. This government will not stand and allow Liberal senators to obstruct, delay and ultimately kill the bill. The Tackling Violent Crime Act was quickly passed in the House and Canadians expect the Liberal dominated Senate to act in the same fashion and pass it quickly.

Settlement of International Investment Disputes Act

[The Acting Speaker, Conservative, Andrew Scheer]

It being 5:30 p.m., the House will now proceed to the taking of the deferred recorded division on the motion at the third reading stage of Bill C-9.

Call in the members.

The House resumed from January 29 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.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I am pleased to speak in the House today at third reading on Bill C-9, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention). The NDP is opposed to the bill and I will outline some of the reasons that we are opposed to it.

This is a bill that, on the face of it, looks fairly innocuous. It deals with a dispute mechanism. It involves the World Bank. It involves the status of multinational corporations when they are dealing with investment in foreign countries and ensuring there is a dispute resolution process.

On the face of it, it looks fairly reasonable, but when we dig a little bit deeper we find that this just skims the top in terms of what the bill represents in terms of a global regime that has seen over the last 20 years a massive transfer of power from governments to multinational corporations under the World Trade Organization under these trade agreements.

I would note that the Deputy Speaker, the member for Elmwood—Transcona himself, as a member of the House, has played a very active role. Mr. Speaker, I know you have been very involved with the NDP over the years when we fought the multilateral agreement on investment and the Free Trade Agreement of the Americas in Quebec City. Now we are dealing with the so-called security and prosperity partnership agreement that involves Canada, the United States and Mexico.

Mr. Speaker, I know you are very familiar and have a lot of credibility and a long record on dealing with these massive trade agreements that impact and undermine the democratic rights of Parliament and other states, and creates an enormous gulf in terms of the ability of citizens to organize themselves to have an impact on how these agreements come about and how they are dealt with in terms of disputes and the decisions that flow from them.

When we looked at Bill C-9 and had discussions in our caucus, we came to the conclusion that we could not support the bill.

The ICSID, as it is called, is part of an international trade and investment regime that has come under very harsh criticism from civil society because it does confer unprecedented powers to multinational corporations through bilateral investment treaties.

One of the concerns that I raised earlier today is that through this agreement there is no place for third party testimony. There is no accountability, no transparency and no openness or disclosure that would allow local organizations in an affected community or a labour union to come to the table and be part of the dispute resolution mechanism that is contemplated in this agreement unless there is consent by both parties involved in the arbitration, which is probably very unlikely. It makes it very inaccessible to local communities and third party stakeholders who would be impacted by the decisions being made. We believe that is a problem with the bill but that is just the tip of the iceberg.

A question was asked in the House yesterday by a Conservative backbencher who was congratulating the Minister of International Trade on his announcement that Canada has now concluded a free trade agreement with Peru. The Conservative member for Kelowna—Lake Country was asking the Minister of Labour whether the agreement with Peru would now provide labour rights protection in Peru. Not surprisingly, the Minister of Labour stood in the House and crowed that the trade agreement with Peru would deal with an improvement in labour rights, that everything would fine and that we should not worry about it. The Conservatives were patting themselves on the back.

I raise that issue because it is a very current example of the nature of these agreements and how they completely violate and undermine labour rights. They do nothing to be proactive in protecting very serious labour situations.

Yesterday the Minister of Labour claimed in the House that this international trade agreement with Peru will give protection to labour rights. On January 18 information came from the Peruvian workers' union denouncing the fact that over 3,000 workers have been dismissed in that country for organizing trade unions. Labour rights are virtually non-existent. Something is not right with this picture.

Ministers are trying to assure the public that people's basic human rights around labour, child labour, the environment and social standards are being protected and yet we have very concrete examples to tell us that in places such as Peru, which is just one example, there are very serious situations. Workers in that country are being undermined and their rights are being violated all the time.

In October 2007 the International Trade Union Confederation prepared a report for its general council and reviewed trade policies in Peru. This is a very current report. It is quite clear about the fact that there are very serious problems in that country. The recommendations in the report made it very clear that the government of Peru should amend its legislation to conform with the International Labour Organization's conventions 87 and 98. Convention 87 has to do with the freedom of association. Convention 98 has to do with the right to organize and the right to collective bargaining.

I find it contradictory that on the one hand a minister of the Conservative government is trying to assure us that everything is okay and that he has negotiated something that is going to protect those workers and yet the representatives of workers in that country are portraying a completely different reality. That is something of concern to the NDP.

We in the NDP believe that as parliamentarians we have a responsibility to not only uphold these international conventions that protect labour, human rights and the environment in our own country, but we also have a responsibility to speak out in the international community to make sure that those rights are upheld. We expect the Government of Canada to do the same. We expect the Government of Canada to show leadership on those questions.

To come back to the bill that is before us today, that is the very reason we find it to be very contentious. It is the very reason we find this bill to be completely missing the point about what is taking place on a global scale.

The members in our caucus have participated in many forums, discussions and educational workshops. It is quite incredible, given this global situation of opening up the floodgates to the transfer of capital with virtually no rules, that citizens have taken it upon themselves to become informed and educated as to what it is that is going on. These are not easy matters to get a handle on. These are very complicated agreements set up under the WTO. We learned that from the MAI. We are learning that now from the security and prosperity partnership.

We know that agreements are put together in secret. They are done at places like Montebello where leaders meet behind closed doors. The connection to the public, the ability of civil society to have any input or to be able to say anything is limited. In fact, security forces go to great lengths to ensure that kind of dialogue does not take place.

Our caucus has a lot of experience in dealing with these agreements. We understand the implications they have for a democratic society. Fundamentally, we express our concern in the House as well as in the community that we see it as a shift from making decisions in a democratic process in Parliament to a secretive process where we have no access. We do not even have access to that as members of Parliament.

If Canadians were asked what is the purpose of government, what are we here for, our constituents and members in our community would say that the purpose of government is to protect them. The purpose of government is to ensure that they have health care, education, income security and that the country is safe.

Over the years under these neo-liberal and neo-conservative policies, we have seen a massive shift in the role of government. That power has been transferred from government into the hands of undemocratic, unelected, unaccountable, non-transparent multinational corporations. These trade agreements have facilitated that process.

We should be standing up very strongly against these kinds of agreements. What we are most concerned about right now is the security and prosperity partnership that is taking place between the countries on the American continent: Canada, United States and Mexico.

We have been very outspoken. The member for Burnaby—New Westminster, our trade critic, has done an amazing job. He has travelled across this country. He has already gone to 12 communities. He is travelling to another 12 communities where we are holding public hearings on the SPP.

There is so much deep concern in the community about what that agreement will do and the fact that the government, as the previous government did, is signing on to this agreement with virtually no public disclosure. It will impact every aspect of domestic life in Canada. It will impact on the ability of Parliament to do its job. It will impact on the delivery of services. It will exacerbate the privatization of services. It will exacerbate the deregulation that is taking place in our society. At the end of the day these are things that begin to affect the quality of life. It becomes a race to the bottom.

We recognize the connection that this bill has in dealing with the dispute mechanism and its attachment to the World Bank, how it is completely complicit and tied into this move to globalization that is shutting down the democratic process. We strongly object to that. We intend to do everything we can not only in Parliament but in the broader civil society to see that these agreements are opened up, changed, that they are refuted.

We understand that trade is obviously going to happen. Trade is an important part of our economic activity in life, but we want to see fair trade. We want to see trade that is based on agreed to and implemented around core standards that set out labour rights, that set out environmental rights, that set out a social contract and social conditions so that the workers in the south are not being exploited and that Canadian workers are not losing their jobs as a result of these trade agreements.

We have seen a loss of over 300,000 manufacturing jobs. The Canada-South Korea trade agreement is under development. All of these things are taking place with virtually no debate or understanding. All this takes place behind closed doors.

The bill before us today is at third reading, but we believe it is not a good bill. It does not deal with realities that are before us in terms of what is happening with these trade agreements. We have to be incredibly skeptical about what the Conservative government is doing and what its agenda is.

I will use another example. Yesterday in the House we heard a minister of the government say that international treaties will be brought before the House which will be tabled, discussed and debated. On the face of it, it sounds reasonable, but if we go back a couple of years to September 2004, the then leader of the official opposition, who is now the Prime Minister, actually made a commitment with the other opposition leaders, including the leader of the Bloc and the leader of the NDP, that international treaties should be voted on in this House.

That was an actual commitment. It was part of a package that was brought forward in that first minority Parliament. We agreed that there should be a vote in the House of Commons on international treaties. Already we have seen the Conservative government break its promise just by its announcement yesterday that there will not be a vote, that there may be some debate or notice. That is a clear violation of the commitment made in September 2004.

I will close by saying that members of our caucus have reviewed the bill very thoroughly. We have debated and discussed it with our partners in the labour movement, in the Canadian Labour Congress and other places with members of civil society. There is no question that the approval of the bill would reinforce a regime of trade and international practice that gives massive powers to multinational corporations at the expense of the democratic process in places like the House of Commons.

On that basis we cannot support the bill. We urge other members of the House to also show the strength of representing the public interest, because that is what we are here to do, to represent the public interest, and to vote down the bill.

[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.

[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, 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.

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.

[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.

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

Mr. Speaker, it should not come as a surprise to any of us that the Liberals are so enamoured with Bill C-9. The bill has all kinds of flaws, dutifully pointed out by many in the House and by organizations which are expert in this whole area. It comes as no surprise given the fact that it was the Liberals who tried to slip through Parliament and into public policy the multilateral agreement on investment. Thank goodness there were Canadians who said it was dangerous and problematic. Thank heavens there was enough pressure to bear to stop the MAI.

Today we have this proposition before us through Bill C-9 which has problems of the same nature that we identified with respect to the MAI. We also have on our plates the SPP, the security and prosperity partnership agreement, which evokes all kinds of images about lack of transparency and accountability, executive power and power by the international corporate elite.

Is there a pattern here? If the Liberals were in support of the MAI, and in fact they propelled the issue of the multilateral agreement on investment onto the public agenda, if they are in support of Bill C-9, which is clearly problematic in terms of the power of the World Bank, are they also in favour of the SPP?

[John Maloney, Liberal, Welland, ON]

Mr. Speaker, I stand to speak today 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).

This bill implements the international convention on the settlement of international disputes between states and nationals of other states which was open for signature in Washington back on March 18, 1965. It generally creates a set of rules for mutually agreed upon arbitration hearings between investors and foreign state governments. It ensures that the courts in any of the signatory countries have the legal means to enforce any decisions in the ICSID hearings.

As a trading nation, Canada and Canadian and international investors require protection, stability and confidence. Should disputes arise, and they do, it is essential that fair, equitable and judicious treatment is available when necessary.

The ICSID convention is an international instrument sponsored by the World Bank to facilitate and increase the flow of cross-border investment. The convention establishes a mechanism to resolve investment disputes between foreign investors and the host state in which they have made their investment.

The ICSID convention entered into force, as I said, on October 14, 1966 and my understanding is that 156 countries have signed the agreement with Canada signing on December 15, 2006. As of January 2007, 143 states have ratified the convention, making it one of the most ratified instruments in the world. The majority of Canada's trading partners are party to the convention.

Investment disputes brought under the convention are administered by the international center for settlement of investment disputes located in Washington, D.C. In the last few years the activity of the centre has soared due to increased flows of cross-border investment and the number of investment treaties referred to ICSID arbitration.

While the centre had over 110 arbitrations in total during the first 40 years of its existence, there are currently 105 proceedings underway. Since its inception, the centre has established itself as a reliable and effective organization for resolving investment disputes.

Once ratified the convention will provide additional protection to Canadian investors abroad by allowing them to include in their contracts with foreign states the option of arbitration under ICSID convention. In addition Canadian investors doing business in the country with which Canada has a foreign investment promotion and protection agreement will have recourse to ICSID arbitration for violations of that agreement as well.

Becoming a party to the ICSID convention will also make Canada a more attractive destination for international investors and that will mean jobs for Canadians.

The most significant advantage of the convention is the enforcement of arbitral awards. Unlike awards issued by other arbitral institutions, domestic courts cannot refuse to enforce decisions issued under the ICSID convention. Rather, such awards are enforceable in any country that has ratified the convention as if they were a final judgments of the courts in that state.

The tremendous growth in investment and investment-stated disputes has made Canada's failure to ratify ICSID the focus of attention by Canadian business, the Canadian legal community and our trading partners. As I have indicated, to date 143 states have ratified the ICSID convention. The majority of our major trading partners are parties to it except for Mexico, India and Brazil. Ratifying the ICSID would bring Canadian policy into line with our OECD partners.

In a survey conducted by the ICSID centre in 2004, 79% of the respondents said ICSID plays a vital role in their country's legal framework and 61% said ICSID membership has contributed to a positive investment climate. Those are significant numbers.

The ICSID regime provides several important advantages, and compared to other arbitration mechanisms, the ICSID regime provides better guarantees regarding enforcement of awards and more limited local court intervention. Any arbitral award rendered under the auspices of ICSID is binding and any resulting pecuniary obligation must be enforced as if the award were a final domestic court judgment.

Moreover, all ICSID contracting states, whether or not parties to the dispute, are required by the convention to recognize and to enforce ICSID arbitral awards. Investors often prefer to rely on such arbitrations rather than on local courts of the country whose measures are in dispute to ensure an independent resolution of the dispute.

ICSID's relationship to the World Bank assists investors in obtaining compliance with ICSID awards and its roster of arbitrators gives investors access to well-qualified arbitrators at ICSID controlled rates, with extensive experience in international investments arbitration. ICSID also provides important institutional support for litigants.

The ICSID convention is a well-known tool for the settlement of investment disputes. Therefore, the interpretation of the convention and its usefulness are predictable.

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

Obviously Canada must become a party to the ICSID because Canada and Canadian investors cannot benefit from the choice if Canada is not a member. This is an increasingly important problem. Within Canada the use of ICSID would be consistent with the policy of supporting the use of the alternative dispute resolution mechanisms for investor-state disputes. While ICSID is less expensive and more efficient than current alternatives, it is not expected to lead to increased litigation against the government.

Under a government whose recent record is one of stifling international participation by Canadian companies, it is important that we pass a bill that protects the rights of our investors in other jurisdictions. With hugely increased trade with emerging giants, such as China, and other countries with governance structures much different from our own, it is important, in fact it is essential, that Canada be a part of the international convention on the enforcement of investors' rights.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

That was 1926. This is 2008.

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

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

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

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

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

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

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

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

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

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

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

[Bryon Wilfert, Liberal, Richmond Hill, ON]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Robert Pratt]

I think I can answer your question.

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

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

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

Business of the House

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Foreign Affairs and International Development

[Kevin Sorenson, Conservative, Crowfoot, AB]

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

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

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

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

[The Chair, Conservative, Kevin Sorenson]

We'll call this meeting back to order.

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

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

Madame Barbot, did you have a question?

[The Chair, Conservative, Kevin Sorenson]

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

[The Chair, Conservative, Kevin Sorenson]

Good morning, colleagues.

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

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

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

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

Again, we welcome you.

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

Go ahead, Mr. Greenhill.

Tackling Violent Crime Act

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

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

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

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

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

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

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

[The Chair, Conservative, Kevin Sorenson]

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

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

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

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

Welcome here. The time is yours.

[The Chair, Conservative, Kevin Sorenson]

All right.

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

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

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

Thank you again for coming.

[Alan H. Kessel, Legal Advisor, Department of Foreign Affairs and International Trade]

Thank you, Mr. Chairman. Good morning to you and committee members.

The Minister of Foreign Affairs is unfortunately not able to join us today. He is out of the country. He has asked me to speak on his behalf, and I am delighted to have a very competent team with me who will be able to answer many of your questions when we get to that portion of the discussion this morning.

I am pleased to speak to you today on the subject of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, which I will refer to as “the Convention” in my remarks.

The Convention was sponsored by the World Bank to facilitate and increase the flow of international investment. The Convention establishes rules under which investment disputes between states and nationals of other states may be solved by means of conciliation or arbitration. It also creates the International Centre for the Settlement of Investment Disputes, known as ICSID to administer cases brought under the Convention. Canada signed the Convention on December 15, 2006.

Mr. Chairman, before a country can join ICSID, as it's fondly known, it needs to pass legislation providing for ICSID awards to be enforceable in its courts. Bill C-9, which is under study by the committee, deals with enforcement of ICSID awards for or against the federal government and foreign governments, including constituent subdivisions designated by foreign governments.

There are numerous reasons to support Canada's adherence to the convention. It would contribute to enforcing Canada's image as an investment-friendly country. It would provide additional protection to Canadian investors abroad by allowing them to have recourse to ICSID arbitration in their contracts with foreign states. It would also allow investors of Canada and foreign investors in Canada to bring investment claims under ICSID arbitral rules, where such clauses are contained in our foreign investment protection agreements and free trade agreements.

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

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

The tremendous growth in investment and investor-stated disputes has made Canada's failure to ratify ICSID the focus of attention by Canadian business, the Canadian legal community, and our trading partners. To date, 143 states have ratified the ICSID convention. The majority of our major trading partners are parties to it, except for Mexico, India, and Brazil. Ratifying ICSID would bring Canadian policy into line with our OECD partners. In a survey conducted by the ICSID centre in 2004, 79% of the respondents said ICSID plays a vital role in their country's legal framework and 61% said ICSID membership has contributed to a positive investment climate.

The ICSID regime provides several important advantages, and compared to other arbitration mechanisms, the ICSID regime provides better guarantees regarding enforcement of awards and more limited local court intervention. Any arbitral award rendered under the auspices of ICSID is binding and any resulting pecuniary obligation must be enforced as if the award were a final domestic court judgment.

Moreover, all ICSID contracting states, whether or not parties to the dispute, are required by the convention to recognize and to enforce ICSID arbitral awards. Investors often prefer to rely on such arbitrations rather than on the local courts of the country whose measures are in dispute, to ensure an independent resolution of the dispute.

ICSID's relationship to the World Bank assists investors in obtaining compliance with ICSID awards and its roster of arbitrators gives investors access to well-qualified arbitrators at ICSID-controlled rates, with extensive experience in international investment arbitration. ICSID also provides important institutional support for litigants.

The ICSID convention is a well-known tool for the settlement of investment disputes, therefore the interpretation of the convention and its usefulness are predictable. It is difficult to quantify how often Canadian businesses active abroad would use the convention for protecting their activities.

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

However, Canada and Canadian investors cannot benefit from this choice if Canada is not a member. This is an increasingly important problem. Within Canada the use of ICSID would be consistent with the government's policy of supporting the use of alternative dispute resolution mechanisms, or ADRs, for investor-state disputes. While ICSID is less expensive and more efficient than current alternatives, it is not expected to lead to increased litigation against the government.

For Canada, as a shareholder of the World Bank, there is no additional cost for joining ICSID by adopting the convention.

Provincial and territorial legislation is needed to ensure the enforcement of arbitral awards rendered in a dispute involving a province or territory designated as a constituent subdivision and which has consented to ICSID arbitration. The federal government has provided assurances that any province and territory that so wishes would be designated a constituent subdivision under the Convention.

The provinces and territories have indicated that they support the Convention in principle. They have also recommended that all jurisdictions, including the federal government must be take steps for the adoption of the legislation implementing the Convention.

Ontario passed implementing legislation in 1999. British Columbia, Saskatchewan, Newfoundland and Labrador, and Nunavut passed such legislation in 2006.

The Minister of Foreign Affairs would encourage you to study this bill and improve it in order to facilitate adherence by Canada to the convention as soon as possible.

Thank you, Mr. Chairman.

[The Chair, Conservative, Kevin Sorenson]

I call this meeting to order.

Our orders of the day include the commencement of our study on Bill C-9, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention).

In our first hour we will hear testimony from the Department of Foreign Affairs and International Trade. We have Allan Kessel, legal adviser, and from the international trade side of the department we will be hearing from Robert Ready, director of the services trade policy division.

We are also pleased to have from the trade law division Riemer Boomgaardt, special counsel; Sylvie Tabet, senior counsel and deputy director; and Meg Kinnear, senior general counsel and director general.

In our second hour we will hear from the Canadian Chamber of Commerce, so we will introduce them when we begin that.

This is one of the first pieces of legislation that this committee has looked at, other than a private member's bill, so we look forward to this. This is a fairly small bill. We want to hear from the department to better understand exactly what the bill does and the safeguards it provides for Canadian investment and others.

So we thank you for being here and being part of that.

On the protocol for the committee, we like to hear from you in the first portion of the committee business and then go into the first round of questioning. In the first round we'll begin with the opposition and then go to the government.

We welcome you here and look forward to hearing what you have to say. The time is yours.

Mr. Kessel.

[The Chair, Conservative, Kevin Sorenson]

No. Bill C-9 is foreign affairs. We can call those from the foreign affairs department but not from any other department.

[The Chair, Conservative, Kevin Sorenson]

Now back to Bill C-9.

Mr. Obhrai.

[The Chair, Conservative, Kevin Sorenson]

I think that's something we can do. I don't know if we have to do that first off. We've already started on Bill C-9. May I suggest we just finish our discussion on Bill C-9 and then we go to the steering committee thing?

From what I understand here, that the chair, the vice-chair, a member from the Bloc Québécois, the parliamentary secretary do compose the subcommittee on agenda... You want a replacement on there, and I don't think there's any problem at all with that.

[Deepak Obhrai, Conservative, Calgary East, AB]

Thank you very much, Mr. Chair.

Let me congratulate you on being the chair again, and of course Mr. Wilfert and Madame Barbot on being vice-chairs of the new committee—I'm sure we'll all be working very well together—and of course the new members who have come, Raymond Chan and Paul and everybody else. We're looking forward to the session.

And of course, Gerry, it's very nice to see you, and Angela, it's nice to see you again.

Having done the nice things, let's get to business.

Concerning Bill C-9 and inviting the Minister of Foreign Affairs on Thursday, November 22, the minister is not in the country, so that's not possible. I say we just leave it as “senior departmental officials” who are available and continue with that.

As well, I think we would like to propose a list of a few witnesses for this, so that we can listen to the so-called expert witnesses. We have a list of these, which basically just means the Canadian Chamber of Commerce and others who are out there.

[The Chair, Conservative, Kevin Sorenson]

Good morning. This is meeting number 2 of the Standing Committee on Foreign Affairs and International Development, Tuesday, November 20, 2007.

Today we meet to discuss the results of our steering committee work. The subcommittee on agenda and procedure met last week. You'll notice in the packet that's been given to you this morning that besides the motions that have been presented and the budget that will be looked at this morning, you have your report from the steering committee.

We want to first take a look at that; then we will have time for the remainder of the committee business. The only item that is on the agenda today is committee business. If everything works out as planned, next Thursday we'll begin with some legislation that's coming down the pike.

So take your report, the first report of the subcommittee on agenda and procedure.

On Thursday, November 15, we met and came up with some recommendations to this committee. All members of the steering committee were there. The committee decided that we could begin a study. In conjunction with conversations with the clerks and researchers, we felt that we could recommend that we proceed with the study of Bill C-9, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States on Thursday, November 22, 2007, by inviting the Minister of Foreign Affairs and/or other senior departmental officials.

The rest of the report basically deals with a budget. We would want to adopt that budget, or at least make a recommendation to the committee to adopt a budget, and then move into our motions.

Mr. Obhrai.

Settlement of International Investment Disputes Act

[Maxime Bernier, Conservative, Minister of Foreign Affairs]

moved for leave to introduce Bill C-9, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention).

Mr. Speaker, pursuant to the special order made previously, I would like to inform the House that this bill is in the same form as Bill C-53 was in the previous session at the time of prorogation.

(Motions deemed adopted, bill read the first time and printed)