Bill C-4 (Historical)

Canada–United States–Mexico Agreement Implementation Act

An Act to implement the Agreement between Canada, the United States of America and the United Mexican States

This enactment implements the Agreement between Canada, the United States of America and the United Mexican States, done at Buenos Aires on November 30, 2018, as amended by the Protocol of Amendment to that Agreement, done at Mexico City on December 10, 2019.
The general provisions of the enactment set out rules of interpretation and specify that no recourse is to be taken on the basis of sections 9 to 20 or any order made under those sections, or on the basis of the provisions of the Agreement, without the consent of the Attorney General of Canada.
Part 1 approves the Agreement, provides for the payment by Canada of its share of the expenditures associated with the operation of the institutional and administrative aspects of the Agreement and gives the Governor in Council the power to make orders in accordance with the Agreement.
Part 2 amends certain Acts to bring them into conformity with Canada’s obligations under the Agreement.
Part 3 contains the coming into force provisions.

Canada-United States-Mexico Agreement Implementation Act

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Madam Speaker, New Democrats have also questioned the sovereignty challenges of other trade agreements that are going forward in non-status economies, as was quoted by the deal. It absolutely deserves a lot of attention.

In terms of the agricultural sector, many farmers are looking forward to growing our ability to access those trade agreements, and I certainly support that, but it has to be fair and equitable.

I certainly do not disagree with fair trade, but I agree in the neo-liberal agenda as it is going forward with free trade.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Madam Speaker, I have heard a couple of comments and questions to the member about the Liberals saying they did a great deal and that the Conservatives wanted to push them forward to accept any deal.

When the NDP called on the government to ratify the first version of CUSMA, we were asking to get a better deal. However the minister at that time said, “Mr. Speaker, what the NDP needs to understand is that reopening this agreement would be like opening Pandora's box.” And yet the Liberals are now keen to brag about improvements made by U.S. Democrats.

Why should Canadians believe the Liberals had anything to do with the changes that increased protections for workers and guard against higher drug prices?

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Madam Speaker, I thank my hon. colleague for his work on this file as well. These trade agreements have also hurt his community in Hamilton.

It is true. The Liberals were willing to take the deal as it was before and we were constantly pushing for something better because we knew there was something better. My colleague from Elmwood—Transcona has ensured that this deal also has something better through a lot of hard work and pushing the government to go even further and better itself, not just sign off on Conservative already created trade agreements.

[Paul Manly, Green, Nanaimo—Ladysmith, BC]

Madam Speaker, I would like to recognize we are on the traditional territory of the Algonquin people, and I thank my Liberal colleagues for sharing this speaking time with me.

The Green Party will support the new CUSMA. We believe in fair and equitable trade that improves health, safety, labour and environmental standards. I would like to congratulate the Canadian negotiating team for getting this deal done with the Trump administration in the White House. Things could have turned out much worse.

CUSMA is not a perfect agreement. It is still a corporate model of trade. There are deficiencies. Climate change is not mentioned. The softwood lumber agreement has not been fixed. The good regulatory practices chapter could be very problematic. The extension of copyrights was not necessary. Indigenous rights and title are a particular area of concern in both Canada and Mexico. Aluminum was not properly covered in the rules of origin. The dairy industry faces increased imports and constraints on its exports. The negotiating process could still be a lot more transparent and consultative.

However, there are significant wins. The proportionality clause for energy exports has been removed. Labour standards have been improved in Mexico. The rules of origin have been improved. Supply management has been protected. The environmental rules have been strengthened. The cultural industries remain protected.

In my view, removing investor-state dispute settlement provisions, or ISDS, is the biggest win. We need to remove ISDS from all our trade and investment agreements. ISDS gives foreign corporations extraordinary powers to bypass national court systems and challenge domestic laws in a private tribunal system. It gives foreign corporations rights that domestic corporations do not have. Foreign corporations can demand millions and even billions of dollars in compensation from governments for the loss of potential profit when domestic laws and regulations get in the way of their profits.

These secretive tribunals take place behind closed doors, with no public scrutiny or participation from some of the affected parties. Under some treaties, such as the Canada-China FIPA, the public may never know that a tribunal took place or that a Chinese state-owned corporation received financial compensation from Canadian taxpayers.

These are not real courts. Trade tribunals are made up of three corporate lawyers who work for major private law firms and earn $1,000 per hour or more. These lawyers switch roles in different arbitration cases. Sometimes they work for the corporation, sometimes they defend government and other times they act as the deciding judge.

I know the Conservatives are big supporters of investor-state dispute settlements, so I would like to correct some of what I have heard from them on this subject.

No Canadian corporation has ever been successful in bringing an arbitration case against the United States. ISDS has not been a helpful tool for Canadian corporations under NAFTA. Canada's laws and policies have been challenged by NAFTA investor-state rules 48 times, and we have lost eight of the 17 cases that were completed. Canadian taxpayers have paid out hundreds of millions of dollars to foreign companies for the loss of potential profits, not for real expropriation.

For example, Canada banned imports of gasoline carrying MMT, a known neurotoxin, to protect the health of Canadians. The U.S. company that makes MMT, Ethyl Corporation, went to a NAFTA tribunal and received $13 million in compensation from Canadian taxpayers.

Bilcon v. Canada is another egregious case. The Nova Scotia government told Bilcon it was open for business. Bilcon wanted to build a quarry and a shipping terminal and blast rock for 50 years in the vicinity of the calving grounds of the North Atlantic right whale. Bilcon failed the environmental assessment. It then bypassed Canadian courts and received $7 million in compensation from a NAFTA tribunal. It should have received nothing.

The U.S. government has not paid a penny for an arbitration case because it has not lost a single case under NAFTA. It won all of the 21 claims against it. We need to remove investor-state dispute settlements from all trade and investment agreements.

One of the most problematic of those agreements is the Canada-China Foreign Investment Promotion and Protection Agreement, or FIPA. This is an ISDS agreement that will be impossible to change.

NAFTA had a six-month notice clause for abrogation or renegotiation. The Canada-China FIPA is locked in for 15 years, and then there is a one-year notice period, after which corporations that invested get a further 15 years of investor-state. It is 31 years in total. The Canada-China FIPA locks in the discriminatory practices that China had in place at the time of signing. The Canada-China FIPA was negotiated in secret, and signed and ratified without a vote in the House. It was ratified by an order in council by the Harper Conservative government while there was an ongoing court challenge by the Hupacasath First Nation. Let us imagine that. It is complete disrespect of our judicial system and of first nations.

The Canada-China FIPA does not have a national security carve-out or exemption, so if Canada blocks Huawei based on national security grounds, then Canadian taxpayers could be on the hook for billions of dollars for the loss of potential profits that Huawei claims, and we may never know that there was an arbitration case or payout, because both parties would have to agree to make that information public. That is another egregious part of the Canada-China FIPA: secrecy.

Canada has FIPA agreements with the A to Z of small-market and developing countries, from Armenia to Zambia. This is where Canadian companies are using ISDS successfully. Canadian companies have won $2 billion in compensation from developing countries, and there is another $10 billion being sought through ISDS, predominantly from extractive companies. For example, the Canadian mining company Gabriel Resources is seeking $4 billion after the Romanian government, under massive public pressure, blocked a project that would have levelled four mountains, destroyed three villages and turned a valley into a toxic, cyanide-laced tailings pond. This is under the Canada-Romania FIPA.

Imagine if that happened in Banff. Imagine a state-owned mining company taking up Alberta on its open-for-business approach and putting in a proposal to level four mountains, relocate Banff and turn Lake Louise into a toxic tailings pond. Then imagine paying that corporation billions of dollars in taxpayer-funded compensation for the loss of potential profit when Albertans reject the project. Imagine that arbitration case and payout being kept secret.

The legal firms that specialize in ISDS shop these arbitration suits around to hedge funds and finance companies that also reap massive profits from these cases. The Wall Street hedge fund Tenor Capital invested $35 million in the Crystallex v. Venezuela case and got a whopping 1,000% return on its investment when the Canadian mining company was awarded $1.2 billion in compensation. The Crystallex case also came under a FIPA agreement. Indigenous people in Venezuela objected to the mine because it was destroying their community and territory. In this era of the UN Declaration on the Rights of Indigenous Peoples, we are going to see more challenges to destructive extractive projects not just here in Canada but around the world.

Canada has signed trade and investment agreements with some countries that have terrible human rights records. The Harper government negotiated and signed the Canada-Honduras Free Trade Agreement after a coup toppled the democratically elected government.

Is that how we reward anti-democratic behaviour? Should trade not lift all boats? Should the improvement of judicial systems, the rule of law and democratization not be part of these agreements? Should trade agreements not improve the health, safety, consumer, labour and environmental standards of all concerned? The Green Party believes so.

Investor-state dispute settlement, by its very nature, is anti-democratic and should be removed from all of our trade and investment agreements. I would like to applaud the Canadian negotiating team for getting rid of ISDS in CUSMA. Our work is cut out for us: one down, many more to go.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the President of the Queen’s Privy Council for Canada and to the Leader of the Government in the House of Commons]

Madam Speaker, first and foremost, let me congratulate the members of the Green Party for recognizing that this agreement is better than what was there in the first place and is ultimately in the best interests of Canadians.

The member pointed out some of the benefits, which are part of the reason we are getting support in the House from the Green Party, the New Democrats and the Conservatives. All members seem to want to support this bill. There is also a great deal of support across the country from different levels of government, labour unions, entrepreneurs, big corporations, big businesses and medium-sized businesses. There is a wide spectrum of support for the trade agreement.

What are the member's thoughts on how important it is to have this trade agreement put in place?

[Paul Manly, Green, Nanaimo—Ladysmith, BC]

Madam Speaker, it is really important to get rid of investor-state, so the sooner we get this ratified the better. People who know me would be surprised that I am supporting a trade agreement that still follows this kind of corporate neo-liberal model, but I think the wins in this agreement are significant, especially with respect to investor-state.

As I outlined, it is an egregious part of the trade and investment agreements that have been signed by Canada and other countries around the world. There are some 3,000 of these investor-state agreements around the world. It is really a system of corporate capture that is fundamentally anti-democratic and blocks governments from doing things that are in the best interests of their citizens. I applaud the negotiating team and the government for getting rid of investor-state in this agreement.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Madam Speaker, I thank the hon. member for putting an emphasis on the investor-state provisions, which we both dislike. We do not support this corporate model that ignores the rights of workers and indigenous rights.

Not having climate targets in this deal is of huge concern. I would like the member to talk about what could have been done if we had included climate targets and how trade could become a tool for reducing emissions so we can follow the IPCC report. The report identifies that we will have catastrophic changes if we do not make huge changes to our lifestyle today.

Could he also talk a bit more about how important the indigenous rights piece is? He cited the Hupacasath, and I applaud them. They have stood up for indigenous rights. He also cited how the government failed again. It failed to do adequate consultation and implement UNDRIP in this deal. There was an opportunity to do that. In fact, it was the U.S. Democrats that got us most of our gains in this deal, not the Liberal government, which is patting itself on the back. It would have settled on this agreement way before any of these changes were put forward, so we owe appreciation to the U.S. and certainly to the Hupacasath and all the other players who are standing up for really important values.

[Paul Manly, Green, Nanaimo—Ladysmith, BC]

Madam Speaker, investor-state is a huge problem for dealing with climate change. Given the number of investor-state dispute settlement agreements around the planet that are going to impede climate action, we are going to have to deal with this through article 20 of the WTO to try to solidify something that overrides the investor-state dispute settlements that have been signed in multilateral and bilateral agreements.

In terms of the Hupacasath and their challenge, as the previous speaker said, article 19 of UNDRIP should have been taken into consideration and there should have been proper consultation with first nations about this. In the case of the Canada-China FIPA, to have it ratified in the middle of a Federal Court case is egregious.

I would agree that we have a lot of things to work on. We have a lot of fights ahead of us to deal with the spiderweb of investor-state that surrounds this planet and deal with the climate crisis to make sure we are able to fight it clearly, without corporate influence and blockage.

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Madam Speaker, to pass this legislation swiftly, as all stakeholders and constituents had requested, so the vacuum of uncertainty would be lifted on our trade relations with the U.S., our official opposition made many suggestions as to ways we would gladly co-operate with the government.

Knowing that the federal election was coming up in October, the Conservatives offered to begin a pre-study on the original legislation, Bill C-100, in May of this year. That way the government would only have to deal with clause by clause later on, but it declined. When the revised agreement was signed in December, the Conservatives offered to come back early from the Christmas break to begin work on the bill. Again, the government declined.

The international trade committee had approximately 200 requests come in on CUSMA, and the amount of work to do on the legislation had not changed. We consistently offered to commence that work earlier, but the government declined.

The Conservatives ultimately offered to complete clause-by-clause examination by no later than March 5, under the assumption that the government would not be recalling the House of Commons during the constituency break. Again, the government declined.

A unanimous motion was passed at the international trade committee, requesting that the government release its economic impact analysis for CUSMA. It was not provided until one day before committee conducted its clause-by-clause review and the government's economic impact report compared CUSMA to not having a NAFTA deal at all.

What this said was that the government wanted Canadians to believe that any trade deal, no matter how unbalanced or restrictive, would actually be better than nothing at all.

Thankfully, the C.D. Howe Institute released a report comparing CUSMA to the old NAFTA deal on February 21. It affirmed that CUSMA would reduce Canada's GDP by $14.2 billion. Canada's exports to the U.S. would fall by $3.2 billion, while our imports from the U.S. would increase by $8.6 billion. The C.D. Howe Institute's report shed some light on why the government said it was important to support the new agreement moving quickly and then balked at every opportunity we gave to expedite the passing of the legislation.

We are here now dealing with the issues around what was not good in the agreement. With those 200 organizations and individuals who wanted to come and talk to the committee, we were able to process through 100 of those.

The Canadian Manufacturers and Exporters said, “If we want Canada to take full advantage of this agreement, the government must take steps to insure Canadian manufacturers' productivity levels are equivalent to that of other OECD countries so they can succeed on North American markets and globally.”

The Canadian Chamber of Commerce said, “The CUSMA, as signed last autumn, was in imperfect but necessary agreement to provide greater predictability in our relations with Canada's largest trading partner.” Predictability was lost to such an extent that we were to the point where people were saying that we needed to just get this done.

Last week, I met with my own chamber of commerce and also held a town hall, with the shadow minister for agriculture, in my riding with a number of farmers from the area.

Agriculture and agri-food producers, manufacturers, exporters and all the support services of small businesses in my riding are experiencing the serious impacts of uncertainty with which the government has plagued our economy: increased costs and a loss of customer base because of the punitive policies of the government: an uncertainty of our relationship with our biggest trading partner, plus the shutting down of supply routes due to strikes and lack of railcars because oil is flowing on our tracks instead of safely through our pipelines; barricades that created dangerous situations and prevented products from being shipped; carbon taxes on heating and cooling systems that are necessary for manufacturing; and increased payroll taxes and red tape.

People feel they have been attacked and ignored by the government. They know that CUSMA is an imperfect, but necessary agreement to provide better predictability in our relationships with Canada's largest trading partner. Therefore, we are here ready to pass Bill C-4.

The Aluminum Association of Canada said, “As part of the ongoing collaboration between the Government of Canada and industry, we intend to initiate discussions with the government to encourage Mexico to implement a similar measure, which would help limit the arrival of products that do not comply with the rules of the agreement between our three countries.” Canada's aluminum industry is concerned by the government's failure to secure the same made-in-North American provision for aluminum as was given to steel. Canada is North America's largest producer of aluminum.

While the 70% rule of origin included looks good on paper, in reality the failure to include a smelted and poured definition, which is what the industry is asking of in Mexico, will leave the North American industry vulnerable to dumping from overseas, particularly through Mexico.

As well, the government needs to report on the status of the $2 billion in tariffs, the revenue that it has collected thus far, to ensure it actually was used to support Canadian businesses impacted by those tariffs. The manufacturers in my communities were very discouraged by what they saw in the government's behaviour when they were facing shut downs, including its suggestion that it help the manufacturers deal with it by giving more EI. They did not want more EI; they wanted to keep those people working.

As well, there is an urgency to develop a strategy to market Canadian aluminum as the greenest in the world to help shore up our competitiveness in existing and emerging markets. This is part of the Conservative environmental plan. It looks at showcasing and bragging to the world about what Canada already has done and how we can help to impact the global issues on climate change that have impacted so many other countries that are not as clean as Canada.

Then there are our dairy farmers.

The largest group left behind by the government during the negotiations is Canada's dairy sector. The government has managed to simultaneously shrink the opportunities for dairy producers and processors at home, while also limiting their ability to grow by exporting.

Canada agreed to place a worldwide cap on exports of certain dairy products in CUSMA, which is unprecedented in regional trade agreements. As the nation's prosperity depends on reliable access to global markets in every market, but specifically in dairy, Canada must not agree to this kind of provision in any future trade agreement. Why would the government say yes to giving the U.S. that kind of power over our sovereignty and our opportunity to trade as we wish with other countries?

This concession is an affront to our sovereignty and there is no excuse or rational argument for this capitulation to go hat in hand to the U.S. to ask if we can please have its permission to export dairy to any country with which we choose to trade.

There are so many areas that are faulty in this agreement, which stakeholders brought to the attention of the committee, and we were able to create recommendations for the government to move forward and to rectify a lot of those issues.

Regarding government procurement, we have no chapter on being able to secure Canada's access to the U.S. market.

Regarding auto, Canada's exports of motor vehicles to the U.S. will decline by $1.5 billion relative to the current trade regime under NAFTA, and imports would decrease by $1.2 billion. In light of the hardships faced by Ontario's auto sector, which were compounded by the punitive actions of the government against our competitiveness, it must fulfill the auto sector's request to delay the implementation of CUSMA for the auto sector until January 2021 to allow it to adjust to the new climate of the deal.

Regarding forestry, so many mills have closed and support services, small businesses and whole communities have been brought to a standstill by the government's indifference. They do not deserve this attitude from their Prime Minister, whom they expect to re-engage right now with the United States trade representative to find a solution to this issue.

Regarding cultural exemption, the price of protecting it in CUSMA was to open ourselves up to retaliatory tariffs not limited to that sector. For example, if Canada decides to implement a digital service tax for a company such as Netflix, the United States would be within its right, as per CUSMA, to place a tariff of equal commercial effect on any Canadian export.

These are just a few of the examples of where the government has capitulated to the U.S. The U.S. reply to the whole document is a huge document of all of its successes. Ours, from what I understand the previous minister of trade on this side of the House said, was 72 pages long. Clearly, Canada has not come out on the best circumstances here, but as stakeholders have said, we just need to get this done and move on, hopefully in the future with better arrangements.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the President of the Queen’s Privy Council for Canada and to the Leader of the Government in the House of Commons]

Madam Speaker, I have a difficult time with the Conservative Party's approach to the whole issue of trade.

The Conservatives say they are going to support the bill. Then they go absolutely all over the place about why it is such a bad trade deal. If we follow their logic, it is almost as if they were going to vote against the trade agreement.

I really take exception when the Conservatives try to come across as the protectors of supply management. This is from the Conservative Party, the same party that destroyed the Canadian Wheat Board. Prior to doing that, it said that it would do nothing to hurt the Canadian Wheat Board. If the Conservatives were in government today, they would not have protected supply management. Many farmers recognize that fact.

What gives the member's party credibility when it has been so inconsistent on this trade agreement?

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Madam Speaker, the inconsistency is on that side of the House.

The Liberals voted against the very first NAFTA agreement. We are the party of free trade. The other trade agreements that the Liberals were championing today, the ones they signed their name to, all of that work was done by this Conservative Party when we were on that side of the House.

That member has nothing to say to me about free trade. We are very proud of the fact that we do very good deals. It is unfortunate, quite honestly, from my perspective, that we have to vote in favour of this in light of these issues. This has been done so poorly, but all our stakeholders have said that we need to deal with this and move on from here.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Madam Speaker, when the first NAFTA agreement came out under the Conservatives, 400,000 jobs were lost. I know that in the city of Hamilton, many manufacturing jobs were lost. The city was collapsing at that time.

Under the first agreement, investor-state dispute provisions were negotiated that would allow investors to sue our country. Now that this has been taken out under this agreement, does the member not feel this is a better agreement than the original one?

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Madam Speaker, from what I see in feedback from the stakeholders in the auto industry, there is a lot of angst around issues with this agreement. That is why they have requested that it not be implemented for the auto industry until 2021.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Madam Speaker, it is always difficult to look back. I know people tend to forget what happened in the 41st Parliament.

The passage of the Canada-China investment treaty is one on which we really need to focus. People forget that it exists. I have heard so many members speak to the issues we have in CUSMA, now that we have gotten rid of chapter 11, the investor-state dispute settlement provisions, that allowed the U.S. government to sue us in secret.

However, it was under Stephen Harper that we are now obligated, for decades, to secret tribunals, where the People's Republic of China state-owned enterprises have the right to lean on the Canadian government in secret, first for six months, and then bring secret arbitration cases, if we do anything that hurts the expectation of profits of corporations from the People's Republic of China.

Would the member be willing to look into the implications of that, which was passed in secret, in cabinet, without a vote in Parliament?

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Madam Speaker, I cannot answer that. However, if we were forming government, we would be far more careful about the way we encourage investment from China in our country going forward.