Mr. Speaker, the first item on today's projected order of business was Bill C-23, which is the Colombia free trade agreement. I know it is of significant interest to the House and to many Canadians, particularly those who are concerned about human rights abuses in Colombia and the propriety of getting into a trade deal.
For those who may have tuned in to try to understand what is going on here, I thought I should briefly explain that the members of standing committees do report to the House. In its second report, the Standing Committee on International Trade reported with regard to a pesticide dispute under chapter 11 of NAFTA. Their majority recommendation was that the government vigorously defend Quebec's pesticides management code in the case opposing Dow AgroSciences and the Government of Canada in order to safeguard Quebec's right to enact legislation and make regulations in the public interest.
That is the recommendation to the House. It is a recommendation to the government to express the view of the majority of the committee. I repeat that it is a majority, because the government members of the committee did not support this report. The opposition parties were the ones who made this recommendation. It probably hearkens back to the history of talking about NAFTA issues here. I know it has come up a couple of times in debate with regard to the softwood lumber dispute and in the debates that went on in this place for a substantial period of time.
The debate during that period really demonstrated to Canadians how rigorous this process of dispute-settlement resolution can be, how nasty it can get, how there are different pieces that can take place, how the moneys were going back and forth, and how the arguments were very nuanced and difficult. Again, it was a situation where the majority of the House opposed the deal, but the government was supportive of the resolution.
There is certainly a pattern here that raises some concern. In any case, we are debating this report, which is a recommendation of the standing committee. This debate will go on until no members rise or until three hours have passed and there is a vote on the motion. It is always nice to make reports to the House, the government and the minister, but if we do not want to have the response of the government and we just want make our point and throw it out into all of the reports that are tabled in this place, there is no onus on the government to respond to this recommendation formally.
The government members at committee made their positions known, and unless one reads the transcripts of those committees and looks at the questions in all of the details, most members will not know. This is very complicated material and the issues are very important. When we see these reports, it is interesting to know that if members do not ask for a government response within 120 days it means that they do not want a response. That means that we are just going to throw this into the pool, and whenever members come up to routine proceedings on motions, people can just say, “I would like to move concurrence on that report. Let us talk about that report”.
That is where we are right now. I wish that there had been a request for a government response on this thing, because it was the government members who opposed the majority position of the committee. We are going to be debating this. We will get on to Colombia. There are some excellent speakers on Colombia free trade who are going to be speaking on that bill, so hopefully we will get back to it quickly.
I want to share with members some of the aspects we have been talking about. There has been a lot of talk about chapter 11 and about expropriation and so on. How does all of this tie together? The best thing for me to do is to refer to an assessment on this matter done by a researcher, Meg Sears. She has a Ph.D. and is the adjunct investigator for the Children's Hospital of Eastern Ontario. She wrote a very interesting paper which frames the issue that is before the House and which the committee considered. She is a scientist and a medical writer and she wanted to assist the committee in its study. She has examined Canada's pesticide assessment process by the Pest Management Regulatory Agency, the PMRA as other members have referred to it, and the assessment of the herbicide 2,4-D which is the pesticide which Quebec has banned.
There has been a challenge by Dow. She concluded that Dow's notice of challenge of Quebec's restrictions on the use of 2,4-D shows how Canada's sovereignty to protect citizens from toxic exposures is compromised by NAFTA chapter 11. That is a very significant statement. Our sovereignty to protect Canadians is challenged by NAFTA chapter 11. There is substantial information which I would be happy to provide to members if they are interested, but I would like to go immediately to her conclusion in regard to this matter. She said:
The Dow challenge to the regulation of 2,4-D by Québec directly challenges Canadians' ability to take precautionary measures to protect health and the environment. Trade agreements should bring signatories to higher levels of protection, not the opposite, compelling governments to expose their citizens unwillingly to toxic chemicals in their homes and neighbourhoods. Although it is beyond the scope of the present committee, one must also wonder about the extent of PMRA complicity, as 2,4-D was re-registered with incomplete, sub-standard data and misinterpretation of important information.
I urge the Government of Canada to defend the rights of all levels of government to enact precautionary measures to protect health and the environment, and to ensure that NAFTA puts Canadians' health before multinational corporate profits.
That is very, very significant. I commend the assessment done by Meg Sears. It shows the importance of this matter and the fact that it was just a report from a committee should not be taken lightly and we should protect Quebec's rights to do this.
I mentioned earlier when asking a couple of questions that there have been similar bans in Toronto and Halifax, but they have not been challenged. If there is an existing challenge under NAFTA chapter 11 with respect to Quebec's ban, we have to ask why that challenge would not automatically be extended. Maybe the mechanics of it is that if one can be won, maybe subsequent challenges could be fast-tracked to bans in other jurisdictions.
I also want to comment on NAFTA chapter 11. We in this place will probably have NAFTA on our agenda as long as there is a free trade deal with the United States. Members have already mentioned their concerns about protectionist measures in the U.S. precipitated by the global economic climate.
We can understand that countries want to do whatever they can to recover in their own economic sphere, but they also understand that we are inextricably linked with our trade relationships and we have existing deals. When there is this aggressiveness that we want to protect and enhance domestic trade, we put pressure on areas such as bilateral trade that occur in some of the aspects that fall under the purview of the North American Free Trade Agreement.
The purpose of chapter 11 is to facilitate the flow of investment within North America. That is what it really gets down to. This is very complicated. It does so by establishing a framework of rules and disciplines that provide investors from NAFTA countries with a predictable rules-based investment climate. These are the kinds of things that happen generically.
When I looked at the rest of the briefing notes, I realized that this is a complex maze of push-pulls and it takes full-time work to really understand. I commend committee members for being able to wrap their minds and their attention around such an important matter when it is fluid and constantly evolving. Like most laws and even our Constitution it is almost like a living document. Every time there is another challenge, another precedent is set. These are the kinds of things that affect the decisions that are taken by Canada and by the provinces.
Chapter 11 also establishes a mechanism for the settlement of disputes that might arise from potential discriminatory charges. In this way chapter 11 effectively prevents governments from taking measures that amount to discriminatory nationalization or expropriation of a foreign investment without paying compensation to the investor. That is the essence of what we are talking about in terms of the current challenge with regard to 2,4-D.
People should know a little bit about the elements of chapter 11 which come up in debate. Chapter 11 is broken down into two sections, sections A and B. Section A has the main provisions.
Article 1102 refers to national treatment and it states that each NAFTA party will treat investors and investments from other NAFTA parties no less favourably than it treats its own investors and investments, in like circumstances, with respect to such matters as the establishment, acquisition, operation and sale of investments.
Article 1103 will come up. It deals with most favoured nation treatment. It states that a NAFTA party may not treat an investor or investment from a non-NAFTA country more favourably than an investor or investment from a NAFTA country.
There is also the minimum standard of treatment in article 1105 which assures a minimum absolute standard of treatment of investments of NAFTA investors based on long-standing principles of customary international law.
Article 1110 has to do with expropriation and is specifically related to the matter before the House in this report. Article 1110 states that a NAFTA party cannot directly or indirectly nationalize or expropriate an investment of an investor of another NAFTA party except one, for a public purpose, two, on a non-discriminatory basis, three, in accordance with due process of law, and four, on payment of compensation equivalent to fair market value.
Most committee members probably had to spend a fair bit of time to understand the meaning of the provisions. I think that is why we have had such hot debates in this place with regard to NAFTA challenges and particularly matters where dispute settlement resolution has not seemed to work.
The key issue in article 1110 is the meaning of the term “tantamount to expropriation”. This is where it gets down to the subtleties. It is well established in international law that the term “expropriation” need not refer to the transfer of title of property. A country can be considered to have expropriated property if its actions have the effect of significantly diminishing the owner's right to extract economic benefit, including profits from that property.
Members will understand that when we are talking about the expropriation issues here, we are not talking about taking away anything. In fact, it is affecting the rights that flow from this matter, to the extent that if Quebec bans the use of a particular pesticide, another NAFTA country is going to be impacted by not being able to either export to Canada products that use that pesticide or something similar to that. That is the subtlety and that is why the term “expropriation” is being used, but not maybe in the traditional sense that members would understand.
Section B of chapter 11 outlines the dispute settlement provisions. These provisions allow the investors of one NAFTA party to directly make claims against the government of another NAFTA party through the arbitration process. NAFTA outlines certain general procedures regarding the arbitration but stipulates that such arbitration must be conducted in accordance with the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, referred to as the ICSID convention, and facility rules of the ICSID or the arbitration rules of the United Nations Commission on International Trade Law.
The mechanism of chapter 11 dispute settlement is not without controversy, as we know. The process has been criticized for its lack of legitimacy and transparency. It also has a limited form of review and no recourse of appeal. That is a challenge. It means that we need to be very careful how we address these matters because when one is in that situation, without recourse for appeal, decisions are full and final and it does get a bit sloppy.
It is also important to note that NAFTA stipulates that no chapter 11 tribunal decision can be used as a precedent in subsequent chapter 11 cases. I referred to the Halifax and Toronto bans on this pesticide, and although there may not be the applicability of a precedent on the disposition of the Quebec issue on the same matter, certainly the arguments and the evidence would be available, although the decision may not be binding. In other words, no body of jurisprudence can be built up over time. Each case is considered to be a unique event.
I thank the members who brought this particular debate to the House for doing the work to take a position. It does raise the question though of why the government does not support the majority decision of the committee. That is very troubling to me and it should be troubling to all members. That is why I am a little disappointed the committee did not ask for a formal government response. The government must be accountable to the House. It must respond. We have missed that opportunity. Maybe the members are satisfied that they heard substantively the government arguments at committee and I hope that they are going to share them on some specific basis.
I had also raised the fact that when Quebec made the ban, it did not have a scientific basis for the ban, but as I indicated earlier and I will conclude with this, the report of Meg Sears states that the Government of Canada should defend the rights of all levels of government to enact precautionary measures to protect the health and the environment of its citizens.
That is the essence of the argument and why the committee took this position. I hope that the government will now respond to the committee report.
