International Trade Committee on May 13th, 2016

[Jacqueline Wilson]

Yes, that's right.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

How big a shop do you run? How many lawyers do you have on staff?

[Jacqueline Wilson]

There are about five lawyers on staff.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Good.

I take exception to this idea that somehow we can no longer drive our own agenda forward as a government. That's absolutely untrue. You're reading between the lines there and sort of making things up. Are you aware of how many TPP countries of the 12 haven't signed the Paris accord?

[Jacqueline Wilson]

I'm going to address your first point first, saying that it's not going to be a problem for challenging our sovereign action on the environment. I mentioned the Clayton-Bilcon case. That's one example but we've also seen other ISDS cases—

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

That's under NAFTA. You also made the point that ISDS is not available to Canadian companies. That's not true. It's reciprocal.

[Jacqueline Wilson]

I didn't make that point, and I agree it's reciprocal so I didn't say that.

What I'm saying is that we've seen other examples of particular changes in policy being challenged. For instance, in Germany they decided to turn away from nuclear power and that was challenged under ISDS. That's an example where a policy choice was made and a foreign company was able to challenge that under the ISDS provisions.

You can see a similar situation here, where if we make a choice to change something big, to actually fight climate change and make an environmental change that will help, those types of big changes can be challenged by foreign companies.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Yes, okay.

I go back to my question. Which TPP countries have not signed on to the Paris accord? You said we could not implement the Paris accord because of ISDS challenges. Which countries would then challenge us? We're specifically talking about the TPP here. Which countries have not signed on to the Paris accord that would take us to task?

[Jacqueline Wilson]

It's not about whether the country has signed on to the Paris accord. All these countries have, to my knowledge. It's about whether it can be challenged by a company when we take an action to implement it.

The ISDS we're talking about involves a foreign company, not a foreign government, challenging our actions. We have to make big changes to fulfill our Paris commitment. Once you make a change it can be challenged by foreign companies.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Sure, but any company operating under that foreign jurisdiction has quasi-agreed to the Paris accord because the government has signed on its behalf. How would you then have a rogue company that would sue Canada specifically when it's listed as a company in Japan, which is very much focused on climate change as a lot of other countries are? The U.S. is. It's Obama's legacy. Australia and New Zealand, all of these countries are very much focused on climate change, as are we. I don't for a second buy the idea that somehow ISDS is going to be the catch-all for any rogue company that wants to sue Canada for whatever action. I just don't buy that.

[Jacqueline Wilson]

That analysis doesn't take into account how this will really work. Saying you're a company from a country that signed on to the Paris agreement doesn't mean that you won't—in fact, you probably will—use the ISDS provisions to challenge other governments' specific actions that you think are affecting your trade or investment for whatever reason. Being a company from Japan or being a company from the U.S. doesn't mean you can't use ISDS to challenge Canadian government action to fight climate change.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

I think you have a bit of—what am I going to call it—a laser view on certain things where it actually doesn't work that way. I'm not a lawyer like my friend Mr. Peterson, but the point is that to be actionable, it has to be that a government agreed to a certain thing, then changed their mind, and the company is out money, time, and so on. That's what they sue for. It's not just “We don't like what you're going to do on acid rain. We're going to sue you.” It has to be that a government put in regulations, told them it was okay to move ahead on this point, and they spent money and time on it. They allocated resources to it.

That's what they sue for. It's to cover off what they're not able to move forward on.

[The Chair, Liberal, Mark Eyking]

I'm sorry, we only have 15 seconds, so please wrap up.

[Jacqueline Wilson]

Okay.

It could be something like that, though. A regulatory change is something that could be challenged, right?

Unless we're staying with the status quo, it can be challenged under these provisions.

[A voice]

[Inaudible—Editor]

[The Chair, Liberal, Mark Eyking]

I know that sometimes we get in a fiery debate, and I think that's good, but sometimes we have to let each other have a little space here.

We'll move over to the Liberals for five minutes.

Ms. Ludwig, you have the floor.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you very much for your presentations, and thank you for bringing these issues forward. I think very few Canadians wouldn't be concerned particularly about the environment as well as intellectual property and the opportunity for business expansion.

Following up on Mr. Ritz's question, of the 175 countries that signed on to the Paris accord, yes, all of the 12 countries listed under the TPP did sign as well.

Let's say we ratify the agreement. If Canada holds the TPP member businesses to the same standards that we hold our domestic businesses, how likely will it be that the government would be sued under ISDS?

[Jacqueline Wilson]

I think it's very likely, because it's an opportunity available to foreign companies not available to Canadian companies. They have the opportunity to get huge amounts of damages, which aren't available.

My example of the Bilcon case is a good one. If it was a Canadian company that was upset with how the environmental assessment process worked, they would bring an application for judicial review through our court system. What would be available to them would be overturning the decision, or changing the decision, but they wouldn't get damages. It's not available to them. Instead, because it's a foreign company, they get to go to a private...if there are other problems with the system, or the way in which all the terms have been interpreted, then they get to ask for damages and get a lot of money.

So I think it's available to them, and they'll use it.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

I guess I maybe misunderstood. I thought that if Canada was holding foreign businesses to the same standard as domestic businesses, it would be unlikely that the government would be sued. I thought it was more so if Canada was holding the foreign entity to a different standard than a local entity.

[Jacqueline Wilson]

That's fine in theory. That's the theory of the terms, but we have to look at how these terms have been interpreted.

I'm sorry to harp on the Bilcon case, but what they said there was that they were treated differently. It was a specific environmental assessment process, so there were concerns in the analysis of that case about what they were comparing it to. How can you really compare two different environmental assessment processes looking at totally different projects? They won at the NAFTA tribunal.

So it's a little bit more complicated than saying, “Don't worry, if we treat everyone the same, it won't happen.” It's more complicated than that. We have to look at how it has really worked in the past.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

On that as well, if Australia, the United States, and Canada do ratify the TPP, and then there is the risk of breaching commitments made in other bilateral environmental agreements, why would the countries ratify at such a great risk?

[Jacqueline Wilson]

Can you explain your question?

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

In terms of ratifying the agreement, and we either ratify or we don't ratify, when we stand the risk of breaching other agreements and other bilateral agreements that we've done previously, why put ourselves in that risk? Or is there that risk? Will we threaten other agreements?

[Jacqueline Wilson]

One of the issues that I didn't raise in my presentation that's also important is in terms of looking at the TPP and how you can enforce the environment chapter and what we've all agreed to.

One of the main issues is that the environmental breaches or the actions that are undermining environmental protections have to be shown to be in a way that undermines trade. It's not only about environmental protections. Under the TPP there's an additional requirement that you show that the way you've undermined your environmental laws is affecting trade. It's actually an extra barrier to enforcing even the standards, the weak ones that are in here, under the TPP.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Is there also the opportunity for countries like Malaysia and Vietnam to improve their environmental practices based on a rising middle class, as we've seen in other countries?