Thank you very much, Mr. Chair. It's always an honour to have the opportunity to present to this committee.
The Canada-EU CETA was announced in October as having been a completed deal. Since that time over four months ago, still no text of the deal is available publicly, so it makes it very difficult for someone like me, who is a specialist in investment aspects of the deal and could look very closely at the investment chapter, to say much about what the deal actually does.
I ask myself, why is there no text at this stage?
One explanation seems to me to be because the negotiations are still ongoing. The second explanation seems to me to be that there's some other reason not to disclose the text. Whatever the reason, I would like to stress that the text is very important to evaluate the cost and benefits of any trade or investment agreement. There's really no basis for informed public scrutiny or analysis or debate or evaluation of a trade and investment agreement without a public text of the agreement.
I would compare this to real estate agents telling you to buy a house, that it's a really good deal, but they're not going to let you look at the actual buy and sell agreement, the actual agreement to sell the house, and they're not going to let your lawyers look at that agreement; you should just commit to buy it. We wouldn't buy a house in those circumstances, and I suggest that from my perspective as a specialist in the details, it really is not a good idea for anyone to be lauding an agreement without the ability to have informed public scrutiny and debate about a text.
I should add, if you disclose a text, that allows for a certain seriousness and rigour in the evaluation. In my own experience, when I reviewed the text of the Canada-China FIPA about a year and a half ago, it's only by peeling away various layers of how certain provisions work that you can uncover things like the fact that in that FIPA, Chinese investors were given full market access in principle to the Canadian economy, and Canadian investors were not given any market access in principle to the Chinese economy.
Carrying on to the Canada-EU CETA, how can we judge this trade agreement in the absence of the text? I rely primarily on two sources.
First is a technical summary. It's called a technical summary of the CETA that was released by the government in October. That summary has a number of bullet points on investment that make certain statements or claims about what's in the CETA.
Second, I'm aware of what purports to be a leaked draft of the investment chapter of the CETA. That draft is dated mid to late November, so it comes a month after the announcement of the CETA deal being concluded.
Having reviewed those two documents, I'd like to highlight just a few issues that I think are important.
First of all, in the leaked draft text, clearly portions of the investment chapter are not yet agreed. The text is marked in certain colours of ink to indicate which side has proposed text that has not yet been agreed. While you might expect there would be some minor issues that you'd be cleaning up after the deal was done, the items that are not agreed in the leaked draft that I've seen from November are quite significant issues.
For example, in any trade or investment agreement that provides for investor-state arbitration, Canada has never agreed to a so-called umbrella clause, but there's a proposal from the European Union to include an umbrella clause in the Canada-EU CETA, and that is marked as outstanding.
If an umbrella clause were included in the CETA, the way umbrella clauses have been interpreted by some tribunals, in effect that would mean that they elevate any obligation of any governmental entity in Canada to the level of a treaty obligation.
For example, if you are a municipality that has concluded a contract with a European company, and that contract provides for disputes under the contract to be resolved in Canadian courts via an umbrella clause in the CETA, there will be imported into that contract a right of the European company to take any disputes with you about the contract outside of the Canadian courts and have the contract itself interpreted separately through the investor-state arbitration process.
In effect, you're rewriting many, many public sector contracts around the country if you include an umbrella clause. I'd just highlight that as a very significant decision that is not yet agreed, if we can rely on the leaked text that's gone around, dated November 2013.
Another point is that in the technical summary of the CETA, there is a statement that the Investment Canada Act has been carved out of the CETA. However, in the leaked text of November 2013, that's not yet agreed. There's red ink to describe a Canadian proposal to carve out the Investment Canada Act from the dispute settlement provisions in the CETA.
It's very typical for Canada to carve out the Investment Canada Act in that way from other concluded treaties that provide for investor-state arbitration, but it seems to me that this has not yet been agreed by the European Commission. Of course, whether it's been agreed to or not, I don't know, but it's impossible to really verify that until we see an actual text.
If the Investment Canada Act were not carved out of the CETA, it would mean that not only European companies in Canada, but also American companies, based on most favoured nation treatment principles in the NAFTA, would be able to raise objections about Investment Canada Act decisions, for example, on national security issues, in the context of investor-state arbitration. That is outside of any judicial process, whether Canadian, European, or international in some other way.
Mr. Chair, please do let me know if I reach the end of my time.