Debates of May 1st, 2001

Supply

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, chapter 11 is there because, as an investor state in foreign markets, when we get involved in those situations we are required to protect the interests of Canadian investors. Very simply, whether or not chapter 11 exists in those agreements does not affect whether or not a multinational or another foreign jurisdiction can start a law suit. Contract law is not affected by chapter 11. It is available to all at all times.

[Peter Stoffer, NDP, Sackville—Musquodoboit Valley—Eastern Shore, NS]

Mr. Speaker, the history lesson given to us by the Liberal member was most enchanting. Although the member did not mention it, there is this trickle down theory where if the government gets more money it passes to the people who need help.

Would the member like to speak to the 22,000 farmers who have left the family farm this year? Would he like to talk to the thousands upon thousands of senior citizens who are having to make a decision between prescription drugs, home heating fuels and food?

While he is thinking of that, the whole essence of our debate is quite clear. The Minister for International Trade said he would not under any circumstances sign any deal with an investor state provision in it. That is what we are holding the government to account to. The Prime Minister said something completely different. Now we see the Minister for International Trade backtracking ever so quickly to appease his master, the Prime Minister.

First, if the government is so confident about the agreement, where is the text? Second, why is there a flip-flop on a commitment the minister made to the member for Winnipeg—Transcona that the government would not sign any deal with the investor state provision?

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, there are two responses I would like to give. First, there appears to be a disagreement between the member and others, including UN Secretary General Kofi Annan, about the impact of trade on the poor and those in most need in our society. The secretary general said very clearly that trade is good for the poor.

Second, with respect to the text, and I think the member from Churchill also raised the same question, it does not exist yet. It has not been finalized but it will be available soon. All members of parliament will have access to the text as soon as it is ready.

[Werner Schmidt, Canadian Alliance, Kelowna, BC]

Mr. Speaker, I find this is a rather important debate.

The only thing that concerns me at this point is that I find myself in agreement with the hon. Minister for International Trade on the Liberal side of the House. I find myself in agreement with my colleagues, of course, and with my Conservative colleagues. The only people with whom I am in disagreement are members of the NDP group over on the other side.

I notice that there are some interesting points being made by the NDP members. The hon. members are entirely welcome for any gratuitous remarks made in their direction because there are so few of them.

We are dealing with the single most significant element in the Canadian economy, trading with other nations. The NDP has given us an opportunity to express our position on this particular issue, which is foundation to the economy of our country.

Members who are opposite on this issue need to recognize much of the support that has made the country what it is today, the democratic institution that exists, the various political parties that exist, the freedom of speech that exists and the opportunities for individuals to develop their businesses, is as direct result of free trade among Canada and other countries.

Also I point out that free trade is not just in agriculture. I come from a constituency in British Columbia. We call it paradise because it is beautiful in Kelowna. I want to thank my constituents who elected me for the third time. I am humbled with the responsibility they gave me. It is an honour to represent them in the House.

In my constituency there are a number of fruit growers, as well as other agricultural producers. The fruit growers depend to a large degree on their income from the trade that takes place. The Okanagan Valley is now developing some of the finest wines in the world. These wines compete internationally and are winning awards. The wineries also depend to a large degree on international trade.

We need to recognize how dependent agriculture is on trade. We should also recognize the significance of manufacturing and how it depends on international trade.

All we need look at is the automobile assembly plants that exist in the southern part of British Columbia. Industries have sprung up around those assembly plants. Magna International is extremely successful. It has become a major auto parts manufacturing firm. The members should recognize that some of the mutual funds in which they have invested have stocks in Magna International, so they are direct beneficiaries of that particular company. Some of their friends probably work for either Ford, Chrysler or GM in the assembly of automobiles, trucks and various SUVs. All these jobs are directly dependent on international trade.

We need to recognize that trade is not only in the areas of agriculture and manufacturing but also in the area of our natural resources. Where would the economy of the country be if there was not a good arrangement for trading natural gas, oil, coal and lumber?

Let us not forget lumber which is a significant part of our Canadian economy. Lumber is an $18 billion contributor to our gross national product in British Columbia. It is a major issue. Trade with the United States is very well developed and needs to be done properly. That is what we are talking about today.

To suggest that chapter 11 somehow is an anathema to developing strong free trade is simply misleading everything. Why is that the case? I suggest that the first and most important provision of chapter 11 is to protect investors.

There is not a single person in the House who does not want their invested capital to be preserved, protected and to grow. That is what our party wants.

We want Canadians to have the same kind of protection for their investments in another country as we give foreigners investing in Canada. If there is no reciprocal guarantee for the protection of capital then why would anyone want to invest.

I cannot help but take a little shot here at the parliamentary secretary and his minister. I would suggest to them that Canadians investing abroad is not so much a reflection of the strength of the Canadian economy but rather an expectation that they can do better with their investments outside of Canada, particularly with respect to the huge tax burden placed on corporations and individuals in Canada.

We need to recognize that Canada has a negative balance today in terms of direct foreign investment in Canada and Canadian investment elsewhere. Canadians are investing more elsewhere than others are investing in Canada. We have a negative balance and it would be good if it were the other way around.

I recognize that in the past there was a point where Canada had more foreign investment coming into Canada than going elsewhere. One of the reasons for that was the fact that these foreigners needed access to our resources.

Knowing something about Alberta, which is where I grew up, oil, gas and natural gas were major contributors to the success of that province. If oil and gas had not been sold to the American market the province would not have grown in the way that it has. Alberta received that investment from foreign investors not Canadian investors. Today Canadians are realizing how important it was to invest in those natural resources, and it is going along very well. However it first took risk capital from outside Canada to see the vision and develop that particular sector of our economy.

The reason the investors came to Canada and invested was that their investment was protected. We should be forever thankful to them for having done that. I know I certainly am. If we intend to invest elsewhere we would want that kind of protection as well. Chapter 11 does that and that is why it is good.

It is not just the protection of capital in that sense. We want to make sure that it is safe in the sense that it competes fairly with other industries that are investing in the same area. We want to make sure that the competition that exists in those countries is such that it is not mitigating against the successful development of a particular country.

We need to recognize that this investment allows us to benefit from technological development. It takes money and very often takes a considerable risk in order to develop these technologies. This is what happens when good investment and risk capital comes into this country or goes elsewhere.

I will now move on to the second reason that chapter 11 is not all that bad and why the motion before the House should be defeated. It is the negative effects of tariffs.

Some countries have taken the view that they have to protect their industries and development to the point where they impose tariffs on any product competing either directly or indirectly with their local industries which are imported from another country. In many cases this mitigates against the best interests of the consumers who buy those particular imported products. This does not encourage competition in the local economy. It does not allow, encourage or provide an incentive for manufacturing or other industries to be innovative, competitive or efficient, nor does it encourage them to seek innovation or apply new technologies.

We have seen this in the lumber industry. We have in Canada some of the most modern, efficient, technologically aware and developed sawmills and processing plants of lumber of anywhere in the world. People are coming here to have a look at the way in which we do these things.

If we send lumber to other places in the world and they have inefficient plants where they cannot on a per capita basis or on a per worker basis produce the same kind of lumber or they do so with more waste, they would not be competitive. So they place a barrier and then say that they will put a tariff on Canadian lumber which goes into the particular country. The people of that country then have to pay a premium for the lumber which is produced locally because it is inefficient and they have to pay a premium on the lumber which is imported even though they could be saving dollars to do so.

Tariffs work against efficiency. They work against good competition and they very often work against good relations between nations as a consequence.

There is a need to have a level playing field. That is another reason chapter 11 needs to be protected. If people establish a business in another country they want to be sure that their business competes with another business that may be in the same area or may provide the same kind of service or product. They want the same rules that exist in that country to apply to them.

A car manufacturer goes into the United States and builds cars. It could also want to build cars in Canada. We want to make sure that all companies are operating under exactly the same rules and that the playing field is as level as it can possibly be.

That is what we need to be sure about. That is what chapter 11 would do. It would make sure that the advantages given to our industries would also exist for a company that comes here and vice versa. We need to be sure that all protections are provided.

There is one thing that I wish to emphasize at this point. No agreement that has ever been put together by human beings is perfect, and neither is chapter 11. The North American Free Trade Agreement is not perfect. The agreement with the Americas on trade will not be perfect either. It is totally false for anyone to stand in the House and imply that if the government would do this one thing the agreement would be perfect. We will always find ways in which we can improve something.

The hon. member opposite spoke earlier about buying a house. If on the day we turn the key in the door and enter and discover something we did not expect, we immediately want to change it. I doubt whether there is a person in the House who has not renovated a house to some degree somewhere along the line. I doubt there is a single person in the House who is living in a house today which is as it was when it was purchased.

We need to evolve and we need to develop. Later on today we will be talking about democratic reform, reforming this institution. Why is that? It is not because this place has not been working for 125 years or that we have made no changes. It is because we believe we can improve this place and we will.

There is another point that needs to be made. It is the philosophic base from which the motion emanates. This is where I find myself very much away from the party that presented the motion. It is almost as if to have private capital and profit is somehow bad.

Private individuals do a better job of running a business than government ever did, no matter how smart the bureaucrats are who back up the legislation and the policy development of government.

Individuals applying their capital, having a personal interest in what is developing and in what is happening with that capital, would do a better job of managing that money. It is significant that tax dollars left in the hands of individuals always produces a better economy than if the government takes it away from them, thinking that it could spend it more effectively.

We could go through all kinds of countries in the world. We could go to Ireland, the United States, Great Britain and New Zealand. We could go anywhere in the world where governments have cut taxes to see the result. The result has been an improvement in the economic welfare of everyone. People have said over and over again that when taxes are reduced revenues are reduced, and in almost every case, if not in every case, the total revenues of the government have increased and not decreased.

The net result is that it is false economy to raise taxes. The government should cut taxes if it wants more money and it should stop interfering in the lives of individuals.

Chapter 11 would protect the investment of individuals of private capital into production and services so that an incentive would be there, a profit could be made and more people could be employed. The end result is that the economy grows, things get better and we are all happier.

We need to look at the various agreements. We have had the agreement with the United States. We have had the North American Free Trade Agreement which expanded that considerably. Now we are talking about an even broader agreement.

It is interesting because we have had people saying today that somehow the summit in Quebec City two weekends ago was undemocratic. I would like to ask what is democratic. If that summit was not democratic, this institution cannot be democratic because the people who met in Quebec City were also representatives. There were 33 different duly elected heads of state representing their countries and the best interest of those nations. Is that undemocratic?

There are 301 MPs in this institution, elected to represent respective constituents. We are here to make decisions and laws. Is it undemocratic because we represent those people? It is anything but undemocratic.

It is the essence of democracy to be able to vote in the House, representing the best interest and working in the best interest of our constituents. That is what we are all about. That is democracy. At least that is how I understand democracy. If that is not the way some hon. members understand democracy, I wish they would tell us what it is. I would suggest that they would probably be defeated with their definition.

Another question is who signed the North American Free Trade Agreement. It was not signed by an RCMP officer or by a farmer. It was not signed by a president of a college, by a president of a university or by a president of a particular corporation. It was signed by heads of state who were in agreement. It was signed by them, each of whom was duly elected on a democratic basis to represent his or her country. What could be more democratic than that?

Was the process totally open and transparent? No, it was not. I take extreme exception to that. The process should be as open as possible. Has it been as open as possible? No, it has not. We need to concentrate on making these processes open so that democracy is not only done but appears to be done.

[James Moore, Canadian Alliance, Port Moody—Coquitlam—Port Coquitlam, BC]

Mr. Speaker, I compliment my colleague for his excellent speech on the subject. It is interesting to listen to people from different political parties speak to the subject. However the detractors of free trade keep trotting out Ethyl Corporation and Metalclad as examples of chapter 11 without any knowledge or thorough understanding of it. They just say the corporation sued and the corporation won, but there seems to be no deeper understanding of the issue than that. However that is not the basis of my question.

I wanted the hon. member to comment on the assumption which has been spun that there is swelling support of young people against free trade. I am the youngest member of the House. I am speaking uniquely for myself, unlike other young people who are active in politics and who claim to speak for all young people.

Members of my family have left Canada because of high taxes and lack of opportunity. They came from British Columbia where the NDP governs. They decided that high taxes and shutting off trade was not the way of the future.

I also want to speak to the issue of civil society. We have heard this term trotted out by Maude Barlow and her ilk, that they represent the burgeoning group of civil society. They say that those who oppose free trade are examples of civil society.

Any serious political scientist who understands the nature and root of the ethic of civil society, where it comes from in communitarianism, knows for a fact that the term civil society is being hijacked by the radical left.

Civil society is organic people coming together and voluntarily deciding that their ideas have a common cause through community instinct. It is not the well informed and badly intentioned leading the badly informed and well intentioned, which is precisely what happened in Quebec City.

My question is for the member for Kelowna. What does he think of the hijacking of people by the radical left that claims to speak for all young Canadians, the hijacking of the good ethic of communitarianism and real civil society that represents people?

[Werner Schmidt, Canadian Alliance, Kelowna, BC]

Mr. Speaker, I thank the hon. member for his question. I am going to make two points. The first one is with regard to hijacking civil society. I suspect that will come to an end very quickly in British Columbia as the NDP is bound to be defeated in the election.

The second point I would like to make in response to the member's question is simply to suggest that no one can say he or she represents everyone in an area. We do the best we can. To say that I totally represent the hon. member to my right and the hon. member to my left is probably wrong. They are individuals in their own right.

We need to recognize that we come together in a value system where we believe in democracy and we believe in the representation of people in the decision making bodies of the country.

[Peter Adams, Liberal, Peterborough, ON]

Mr. Speaker, I have listened to this afternoon's speeches with great interest and to my colleague in the Alliance with no less interest than the others. There are some things he says that I am very interested in and some actually disturbed me a great deal. I will divide my remarks into two questions.

First, it seems to me that rural Canada at the moment, be it farm country or the more remote parts of the country, depends on foreign trade more immediately than the rest of the country.

For example, I live in a riding which is 40% rural. Half of it is cottage country with one mine, forestry and that kind of thing. The other half of the rural part of my riding is very mixed farming: 150 dairy farms, 500 beef farms, a 50 year old buffalo farm, chicken farms, hog farms and things of that type. Fifty per cent of the farm gate income in my riding depends upon exports. The mine's products are almost entirely exported.

Rural Canada needs rules based fair trading overseas. I accept the member's enthusiasm, but I would like to ask him a question regarding the dispute settling mechanism in chapter 11 we are discussing at the moment. How would he as a member of the Alliance deal with the oversubsidization that is occurring within and without the trade agreements from which our farmers suffer so deeply?

I support fair rules based trading. How would he and his party deal with these subsidies which we as a government have been struggling with to try to reduce the subsidies in the United States, in Europe and so on, which are crippling our farmers in their foreign trade?

[Werner Schmidt, Canadian Alliance, Kelowna, BC]

Mr. Speaker, I thank the hon. member for raising that question. It is a wise question and a very insightful one. I commend him for that. I wish all members on his side of the House would share the same feelings he has just implied in his question. I congratulate him on that.

There are three approaches that I think we need to think about. The first one is that there is global competition and a competitive market exists. When one country subsidizes and another one does not it places the producers of one country at a severe disadvantage. There needs to be competition now at that level.

The unfortunate part of it is that our rural producers are in exactly the position where governments are now in competition and there is a ratcheting effect. They subsidize at this level one year and we try to beat them next year by going a little higher. The war happens at the subsidy level. We need to recognize that is wrong.

What should we do about it? The ideal would be for all countries to say that they will open their doors to competition, be as efficient as possible and eliminate all existing subsidies. Everyone would have to do that in order for it to work. It would be significant to do that.

It does not only affect rural producers, by the way. This is not only in agriculture. It also exists in the manufacturing sector and in certain other sectors of our economy. The ideal position is to eliminate all subsidies.

The next position and probably the one that is realistic is to get to the point where we agree we will not get into a war between each other, gradually eliminate them or get involved in a process like that.

[Wendy Lill, NDP, Dartmouth, NS]

Mr. Speaker, it is my pleasure to weigh in on this very important topic tonight. I am delighted to be able to add my voice to the debate on the most anti-democratic clause of the most anti-democratic agreement Canada has ever seen, chapter 11 of NAFTA.

We are all deeply concerned with the contradictory words and actions from our government on this critical matter. We have seen the Prime Minister run in 1993 guaranteeing that NAFTA would not be adopted unless he got changes to protect Canada. He then adopted NAFTA with only a few cosmetic changes.

As the motion points out, we even had a glimmer of a reprieve from the minister before the committee a while back, saying that investor rights would not move into the WTO, into GATS or the FTAA. Once again we saw the Prime Minister crack the whip and drive dissenters back in line.

I was recently in Quebec City where 50,000 people marched in the streets to protest the undemocratic process being used to make decisions which will affect human beings the world over. The most common complaint of the hundreds I spoke with was that the inclusion and the existence of the investor rights outlined in chapter 11 which, according to a leak on the eve of the summit, were to be included and strengthened in the FTAA.

I went to Quebec City as a member of parliament, along with all my NDP colleagues. We clearly felt that was the place to be if we wanted to know what was going on in the hearts and minds of citizens of the country. A recent poll showed that 4.4 million Canadians would have been in Quebec City if they had the time and the resources to be there to protest against trade deals and the effects they are having on our democracy, our environment and our culture.

The obvious place for us as elected representatives would have been to be inside the summit. The obvious place for the text of the FTAA to be discussed would be right in the House of Commons and in public forums across the country. As we know that is not the case.

The scene that I saw behind the fence where I was with the 50,000 people was a real forum of participatory democracy. There were thousands of caring, concerned people there because they wanted to have a say in the kinds of deals being made for the future of our globe and our country.

Events in Quebec City were as much about culture as about trade. I am talking about culture in as broad sense: what kind of world we want to live in and how we could continue to express our vision of that world.

Critics of mine and the critics of other protesters have tried to say that we are anti-trade. We have heard that today in this room. We are not anti-trade. We are pro-trade. We are pro-community. We want our voices to count through our democratically elected government.

We understand that we are inextricably linked globally by our telecommunications, by our labour and by our environment. We have global problems that we all have to work on together, but we do not believe that business, that money and that the wealthy should have special legal rights.

Under chapter 11 a foreign company can sue a democratically elected government because the government chooses to operate state enterprises or allows for monopolies which it deems desirable for the public good.

Under chapter 11 a company can sue a democratically elected government because through its actions on behalf of its citizens it has denied the company the opportunity to profit in a specific sector of the economy.

Let us imagine how our history would have evolved if this had been true in the past: no railways, no Canadian broadcaster, no Petro-Canada, no national airline, no post office. That is not to mention another real threat, which is to our public hospitals, our schools, our environmental controls and eventually our democracy.

I recognize that there are phrases in NAFTA which give lip service to protecting some of these things. However, in the details, in the incomprehensible language of these agreements, none are protected. If a service were to modernize, it is no longer protected. If we protect our culture, we get zapped in another sector. If a single province chooses to export bulk water, all taps are open. If a single private school can get public funding, we will have to compensate all comers.

My time is running out, but I would like to use a current case before the NAFTA tribunal to illustrate my point. UPS is suing Canada because it opposes Canada Post couriering mail. UPS is saying that because Canada Post is a crown corporation, which it is, it accepts parcels for delivery by the equivalent of a courier service, which it does. UPS is losing potential profit and it feels our taxpayers should cough up a chunk of tax money and give it to UPS, which we may have to do.

It could win this one. Under NAFTA we no longer have the right to have crown corporations that are efficient, that use new technologies and that update their business plans to deliver a service which we as parliamentarians say Canadians want and need.

We have never debated this issue in the House that I know of, but it is not rocket science to realize that we are a big country which has a small population that is very spread out. Having efficient, reliable and affordable service to send each other mail, parcels and goods makes a lot of sense to me. Apparently we can only do this if we first compensate UPS. This case shows how we are stuck to agreements with ineffective exemptions that never allow public enterprises to change, to modernize or to survive.

Our democracy is our most special public right. Under our charter, four of the five sections deal with guaranteeing these rights. I am frightened, along with my colleagues, that unless we change our tune on chapter 11 these rights will be traded away for the sake of guaranteed profits for transnational corporations.

I am very honoured to finish the debate tonight on chapter 11 and to have expressed concerns on behalf of the New Democratic Party respecting the protection of our democratic rights under trade deals.

[The Acting Speaker (Mr. Bélair)]

It being 5.15 p.m., it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the business of supply.

The question is on the amendment. Is it the pleasure of the House to adopt the amendment?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Mr. Bélair)]

All those in favour of the amendment will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker (Mr. Bélair)]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker (Mr. Bélair)]

In my opinion the nays have it.

And more than five members having risen:

[The Acting Speaker (Mr. Bélair)]

Call in the members.

(The House divided on the amendment, which was negatived on the following division:)

Division No. 79

[The Speaker]

I declare the amendment lost. The next question is on the main motion.

[Marlene Catterall, Liberal, Ottawa West—Nepean, ON]

Mr. Speaker, I think you would find unanimous consent to apply the vote just taken to the motion now before the House.

[The Speaker]

Is there unanimous consent to proceed in this fashion?

[Some hon. members]

Agreed.

[Jim Abbott, Canadian Alliance, Kootenay—Columbia, BC]

Mr. Speaker, I missed the previous vote. I will be voting with my party and opposing the motion.

[The Speaker]

With the one addition, is it agreed?

[Some hon. members]

Agreed.

(The House divided on the motion, which was negatived on the following division:)