Good morning.
Thank you for inviting us to appear before the Standing Committee on International Trade.
We represent the Réseau québécois pour une mondialisation inclusive, or RQMI, formerly the Réseau québécois sur l'intégration continentale, or RQIC. RQMI consists of labour and citizen organizations concerned about the need for fair trade. I am also a member of Attac-Québec, an association that advocates for physical, social and environmental justice.
Today, we would like to highlight some significant advances in the trade agreement between Canada and Ukraine, mainly regarding the chapters on the environment and labour. The agreement provides a response to many of our concerns regarding the need to prioritize environmental protection in the fight against climate change and better protection for workers.
However, we are still concerned about chapter 17, on investment. We have always been opposed to the mechanisms of the investor-state dispute settlement process, or ISDS, for the following reasons: they impede states' ability to regulate for the common good; they have a deterrent effect that influences the governments' willingness to regulate; they are very costly, as award amounts tend to run into the billions of dollars; the tribunals generally rule too frequently in favour of businesses that are their only clients; and they constitute a barrier to democracy.
For these reasons, we believe that this free trade agreement between Canada and Ukraine, more particularly, but also that between Canada and the United Kingdom, should be nullified, particularly since the actions brought under them could be even more unwelcome as numbers of disputes increase in times of crisis. Such actions could further destabilize a government already weakened by the invasion of its country.
Many countries, including New Zealand, Brazil, Ecuador and South Africa, are abandoning these agreements or limiting them as far as possible and are not being economically penalized. We would note that ISDS is one of the main obstacles to ratifying the Canada-European Union Comprehensive Economic and Trade Agreement, or CETA, as a result of the strong opposition it raises in many European countries. Canada has taken a first important step by not including the investor-state dispute mechanism in the Canada-United States-Mexico Agreement.
While we obviously admit that the investment chapter in the Canada-Ukraine agreement seems less harmful than many chapters in other, similar agreements signed by Canada, its implementation will nevertheless be problematic. The very nature of arbitration tribunals remains largely unchanged, and we believe the application of this chapter would be subject to numerous interpretations that would not always favour the general interest.
Your committee conducted a thorough analysis of this subject and published it in a report released in June 2021. You mainly heard from experts on the matter, and they were divided in their opinions. The people from the labour world, the international co‑operation community, the associative sector and various environmental organizations have a clear opinion on the matter. They have complained about the harmful effects of the ISDS process on numerous occasions. The Canada-Ukraine free trade agreement affords us an excellent opportunity to abandon tribunals that cause controversy.
We do not believe it would be a great sacrifice to remove the investment chapter from this agreement. In so doing, we would eliminate an interpretational risk, simplify its content, set a significant example for other nations and afford ourselves better protection for Canada's interests and citizens.
Thank you for your attention.