Thank you very much.
My colleagues and I are pleased to appear before this committee today regarding your study of foreign ownership and corporate concentration of fishing licences and quota in order to provide an overview of Canada's commitments under international investment treaties to assist you in your ongoing work.
There are very few rules pertaining to investment under the World Trade Organization, so most of my remarks will therefore focus on international investment treaties. These are foreign investment promotion and protection agreements and chapters in our free trade agreements, which essentially cover the same areas.
To begin, it is important to note that investment commitments are fundamentally different from the goods market access commitments with which most people are probably more familiar.
The objective of an investment treaty is to create a level playing field for investment and investors of both treaty partners. Parties to an investment treaty commit essentially not to undertake certain types of measures against the investments and investors of the other party, usually regardless of the sector. Importantly, these agreements do not offer preferential treatment to those investors, nor do they offer specific levels of market access to the Canadian market.
The core commitments in an investment treaty are numerous: Parties can't discriminate against investors of the other party based on their nationality, whether in comparison to Canadian investors or investors of a third country; parties cannot expropriate or nationalize investments without fair compensation; parties can't treat the investor of the other party in a manner that falls below a minimum standard of treatment found in customary international law; parties cannot impose nationality requirements on senior management of an enterprise; parties cannot impose performance requirements that distort business decisions.
Finally, parties cannot limit the cross-border transfer of investment-related funds.
However, all of these commitments I just mentioned are very much circumscribed by a combination of carefully drafted exceptions and reservations in areas that are typically sensitive to either Canada or the partner with which the party is negotiating.
Importantly, I also want to also emphasize that parties to investment treaties maintain their right to regulate domestically to achieve legitimate policy objectives, such as the protection of the environment.
It's also important to note that Canada's investment treaties are broadly consistent with one another, but each individual agreement includes differences that would be very difficult to summarize here today.
In negotiating these treaties, we seek cabinet mandates, and we consult with relevant departments and agencies, with provinces and territories, and of course with stakeholders.
To bring it back to fisheries in particular, investment treaties, as I mentioned, do not guarantee a specific level of access to the Canadian market.
More than two decades ago, Canada also started to include in treaties an exception whereby we explicitly maintain the policy flexibility to discriminate on the basis of nationality in relation to licensing of fisheries and other fishing-related activities. This means that Canada can give special treatment to Canadian investors in the fisheries sector that it does not need to extend to investors of any treaty partner.
However, the exceptions I just mentioned above do not allow for other violations of our investment treaties, such as the right not to expropriate investments without fair compensation.
Finally, all investment treaties, except for the Canada-U.S.-Mexico agreement, include a dispute settlement mechanism, commonly called investor-state dispute settlement, which allows investors of one party to bring a claim against the other to enforce commitments under an international agreement. However, this mechanism cannot force a party to modify its law; it can only order monetary damages to be paid if a tribunal finds that the party in question has violated its treaty obligations.
On this point, I would like to emphasize as well that no dispute has ever been brought against Canada in relation to the fisheries industry.
To conclude, Canada's international investment treaties neither offer preferential treatment to foreign investors nor offer them a specific level of access to the Canadian market. In most cases, these treaties explicitly provide Canada with the flexibility to discriminate on the basis of nationality in relation to licensing of fisheries and other fishing-related activities.
Thank you very much for your attention.
I'd be pleased to hand whatever times remains to my colleague.
