House of Commons Hansard #114 of the 37th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was parties.


The House resumed from April 3 consideration of the motion.

Free Trade AgreementsPrivate Members' Business

June 9th, 2003 / 11 a.m.


Roy Cullen Liberal Etobicoke North, ON

Mr. Speaker, maintaining and enhancing a strong investment flow is important to a strong and vibrant Canadian economy. Capital flows worldwide have grown rapidly in recent years. Global outward foreign direct investment has increased more than tenfold over the past two decades, from U.S. $568 billion in 1982 to U.S. $6.55 trillion in 2001.

Canada is an active and strong player in this global economy. For example, Canadian direct investment abroad has more than quadrupled, from $98 billion in 1990 to $432 billion in 2002, and since 1996 has surpassed foreign direct investment in Canada.

Canadian investment abroad spurs the growth of Canadian companies and innovaction and technology which in turn creates jobs in Canada. In fact, an OECD study estimated that each $1 of outward investment generated $2 worth of additional exports. Over the same period of time, the stock of foreign direct investment in Canada more than doubled, from $131 billion to $349 billion in 2002.

Foreign investment in Canada is an important source for Canadian jobs, especially high skilled jobs. It also brings advantages in research and development, new ideas and technologies, and talented people. These spinoffs have all made lasting and real contributions to our economic and social well-being.

Investment also provides Canadians with access to the capital and expertise that makes our country stronger and contributes to the quality of life of every citizen.

It also should be noted that yet another benefit of foreign investment is that a large proportion of profits from new investments is reinvested in Canada, contributing to a higher growth rate and a rise in Canadian living standards. Clearly, maintaining and enhancing a strong flow of investment is vital to the health of the Canadian economy. As such, our government policy needs to support a secure and predictable business environment that provides Canada with the principal means of attracting investment to our communities and provides Canadian investors with the protection they need to expand into new markets.

Achieving a fair, open and secure environment for international investment both at home and abroad is key to increasing our productivity and our prosperity. Canada has long been a supporter of a rules based approach to international trade and investment where agreed rules regulate the flow of goods, services and investment. These rules help to bring the investment regimes in other countries to Canada's level of openness.

Investors are looking for a commitment to a stable and predictable environment and Canadian investors are requesting their government to pursue internationally-agreed rules of a high standard which ensure a level and transparent playing field, including recourse to an impartial dispute settlement mechanism.

Because Canada now invests more abroad than it receives in foreign investment at home, such protections are all the more important to Canadians. We can see clearly on trade issues what happens when rules based systems are not in place or not respected. The way that Canada's softwood lumber industry has been harassed by the U.S. industry over the last two decades is a tragic case in point.

Lumber I, as it is now affectionately referred to, was launched in 1982 and ended in 1983 with the U.S. department of commerce concluding that stumpage did not confer a countervailable subsidy. Lumber II began in 1986 and ended with a memorandum of understanding between Canada and the U.S., which provided for the levy of a 15% lumber export tax by Canada. This charge was subsequently eliminated.

In 1991 lumber III began, leading to a ruling by the U.S. department of commence in 1992 that stumpage and log export restrictions were not countervailable subsidies. In 1996, in the search for trade peace, Canada and the U.S.A. finalized an agreement on softwood lumber covering the five year period to March 31, 2001. Essentially, this agreement called for managed trade in softwood lumber, limiting exports from Canada through quotas. Here we are again with lumber IV to which has been added an anti-dumping duty.

The reality is that even though Canada succeeds in its arguments, a new countervailing duty process could be launched the very next day producing lumber V and an unlimited number beyond that.

Despite winning the battles, we are losing the war, so it should be no surprise to any of us that rules can be broken, but does that mean that we should give up on trade and investment rules? No, it does not because it is in our best interest to have them. I have introduced a motion into the House of Commons which will be debated this fall that addresses many of these concerns, but I do not have time to get into that today.

Trade and investment rules promote values that are important to Canadians. They reflect the principles upon which our governments already operate; that while mindful of public well-being, one must act in an even-handed and non-discriminatory manner. While freer trade drives our economic growth, Canada does not negotiate trade agreements at any price. We obtain benefits that are in the interests of Canadians. Despite outward interests, we remain alert to the implications for all areas of domestic policy. These rules do not restrict the rights of governments at any level from legitimately regulating or legislating, nor could a government be forced to remove or amend an existing regulation or legislation.

In addition, Canada's investment agreements contain a broad range of exceptions and reservations for social services, such as health, public education and social welfare, and sensitive sectors, such as culture, transportation, fisheries and telecommunications. They also contain specific exemptions which affirm the ability of countries to adopt and enforce measures that they consider appropriate to ensure that investments are undertaken in a manner sensitive to environmental concerns.

Canada implemented its first foreign investment protection agreement in 1990. Since then we have negotiated 22 further agreements and have included investment components in the NAFTA and the Canada-Chile free trade agreements.

Canada is currently negotiating the free trade area of the Americas, better known as the FTAA, the central America four, the CA4, and the Singapore free trade agreements. The Americas region represents Canada's most important market and strengthening our economic ties with this region is a high trade priority for the government. We are also holding preliminary discussions toward free trade with members of the Caribbean community and the five Andean countries.

Although the set of investment rules contained in NAFTA Chapter 11 has worked relatively well, there is always room for improvement.

As such, the government is not advocating the replication of the NAFTA dispute settlement rules in the FTAA.

While the government is committed to providing our investors with recourse to impartial dispute settlement, we are equally committed to ensuring that the experience gained through the operation of NAFTA chapter 11 is reflected in the FTAA and Canada's CA4 negotiations and in any future agreements. As part of this work, the government is studying the operation and provisions of chapter 11 and consulting widely on its operation.

Both today and before today we have heard arguments that chapter 11 works for U.S. corporations but we do not hear much about how it can work for Canadian corporations. I should note here that a major forest products company in Canada, Canfor Corporation, recently invoked the provisions of chapter 11 of NAFTA, claiming compensation from the U.S. administration for unfairly diminishing the value of its corporate assets as a result of the unjust and unfair countervailing duty and dumping charges on its softwood lumber to the United States, and there may be others. Chapter 11 does work both ways.

The government has several mechanisms in place to facilitate consultations on chapter 11 of NAFTA: regular federal-provincial consultations, a federal-municipal working group, and ongoing consultations with key stakeholders such as the business, academic, legal and NGO communities. In addition, Canada is actively engaged, with our NAFTA partners, in a thorough review of chapter 11 with the objective of clarifying the provisions if required.

In conclusion, the Canadian government is determined to provide the best protection possible to Canadian investments abroad. It has also made a commitment to put into place an investment structure that is stable, predictable and transparent, this being essential if we are to attract foreign investment to Canada.

We do not and will not, however, negotiate this at any price. Canada's position on this is very clear. We will use the knowledge gained from the operation and analysis of chapter 11 and we will continue to safeguard Canada's fundamental values, including our legislative and regulatory framework, to protect the health, safety and environment of Canadians.

Free Trade AgreementsPrivate Members' Business

11:15 a.m.

Canadian Alliance

Deepak Obhrai Canadian Alliance Calgary East, AB

Mr. Speaker, I am pleased to speak to Motion No. 391 brought forward by the member for Joliette. It reads:

That, in the opinion of this House, any free trade agreement entered into by Canada, whether bilateral or multilateral, must include rules for the protection of foreign investments which do not violate the ability of parliamentary and government institutions to act, particularly on behalf of the common good, and must exclude any investor-state redress provisions and consequently, the Canadian government must enter into negotiations with its American and Mexican partners with a view to bringing the North American Free Trade Agreement, NAFTA, in line with the aforementioned principles.

Two or three weeks ago at the Tory convention, NAFTA seemed to be popping up again. NAFTA has had a major impact on Canada and its policies and is one of those driving forces that is now recognized by everyone for its tremendous benefits, which have come to Canada, the United States and Mexico. Of course there need to be adjustments and there have been adjustments.

When I was in Mexico, the people there needed adjustments as well and had some concerns, but overall, in speaking with people in Mexico, with officials in Mexico and with officials in Canada and in the U.S.A., I would say there is no denial of the fact that NAFTA has worked for the benefit of all three countries.

We need a rules based system because we are a small country with a small population but big resources. It is critically important for our size, for our values, that we have a rules based system where we can trade freely. The softwood lumber and other trade disputes taking place and the GMO issue with the European Union all indicate that larger economies do have the clout that can force smaller economies to the side if we do not have a rules based system, hence the desire of all these countries around the world, approximately 180 of them, to be members of the WTO. They want a rules based system that will protect their economies and give them the advantage, now proven, that freer trade provides as it assists economies, assists people and assists countries in coming out of their poverty. Let us look at what has happened to the economies of China and India after they came into the world market.

NAFTA is one of those agreements which has shown that a free trade agreement can work to the benefit of countries. What is chapter 11? Chapter 11 is basically about national treatment which mandates that foreign based companies should be treated the same as domestic companies unless compensated. That is the bottom line. That gives assurances to foreign investors that if they come here, yes, they will be treated as Canadian companies. What is wrong with them being treated as a Canadian company? I do not understand why we cannot treat foreign companies as Canadian companies.

I have here a letter from the Canadian Labour Congress, which opposes this. In reading this, I cannot really understand all the points except for the fact that the congress is against globalization and for protectionism. Being a labour congress, it wants to protect its labour interests. Nevertheless, it cannot convince me as to why it is against chapter 11.

It is interesting to look at Africa, where countries now want foreign investment where there was nationalization, where foreign investment companies were taken over. The president of Uganda has come out with a proposal asking that insurance companies insure investments in the country so that should something happen due to civil war or anything and foreign investors were to lose their investments, insurance companies would now compensate. That is one way of giving confidence to foreign investors: telling them that their investment going into the country is protected in the same way we in Canada want protection for our companies.

Canadian companies have taken tremendous advantage of NAFTA and have done extremely well, both in NAFTA as well as in going out. It has benefited all of us. This foreign investment provision also applies equally, as my Liberal colleague just mentioned, to Canadian companies when they invest overseas. It is not only what is coming in that we are worried about; it is also foreign investment going out, with Canadian companies investing outside of Canada. They also need foreign protection.

Henceforth it becomes pretty difficult to see this argument against NAFTA, against this investment provision. We saw what happened in the Tory convention. It is a party that proudly credits itself for bringing in free trade, considering that Mr. Mulroney at one time was opposed. He saw the merit of it, though, being a businessman, and did it. He did it and the Tories take credit for it. Of course the Liberals opposed it, but once in government they saw the merits of it. Now of course, as we heard, they are big proponents of NAFTA because it has proven to be a very successful trade agreement. Sure, there can be little ifs, ands, or buts here and there, but they easily can be taken care of.

In this letter I got from the Canadian Labour Congress, it says, interestingly, that up to now only eight times has Canada been taken on in this issue. We do business worth billions of dollars a day. According to the congress, it was also on environmental regulations, but the issue is that those regulations that should apply to foreign based countries apply equally to the Canadian companies. It is not that foreign based companies are being given some special treatment. No, they have to follow the same rules.

So where does the problem lie here? The problem does not lie in chapter 11. The problem lies in how the government handled that issue. It mishandled it and will end up paying for it. Why should chapter 11 be made the scapegoat for it? We do billions of dollars worth of business every day, and what we are talking about is a minuscule amount. I would not say it should be disregarded, but the government must see how it has mishandled all these cases and must not do it next time. As for the balance, where payments were given up, such as on the MMT case and so on, responsibility lies with how the government handled it. This provision just provides protection to foreign investors as well as Canadians.

Again I must say there is no argument that NAFTA is one of those agreements that everybody looks upon and says it has worked very successfully. And as for free trade, countries are working very hard on their foreign policies to ensure that they benefit from free trade. In conclusion, I must say that it is very difficult for the Canadian Alliance to support this motion.

Free Trade AgreementsPrivate Members' Business

11:25 a.m.


Francine Lalonde Bloc Mercier, QC

Mr. Speaker, I am extremely pleased to have this opportunity to express my great enthusiasm for the motion by my colleague from Joliette. I congratulate him on having the initiative to bring this motion before the House of Commons.

I would point out that he has extremely strong support, not only in Quebec, by also from various groups in Canada. The support in Quebec comes from a number of major organizations, among them the labour movement and all those involved in regional development and development in general.

It seems to me that the colleagues who have just spoken have not really grasped the point of my colleague's motion. He is not saying that investments do not need to be protected, but rather that investors must not be given the same right to act as international stakeholders as states are, and that rules for the protection of foreign investments developed and used by the Canadian government with satisfactory results prior to NAFTA must be preserved.

I heard the hon. member across the way say that we have signed a number of agreements since 1990. It is true that we think signing some of these agreements was a good idea. Beginning with NAFTA, the right of investors to make complaints directly against governments was recognized. At that point, the approach to complaints took a ridiculous turn internationally.

I want to say this very clearly and I will repeat it because it is bending the truth to say that we do not want to protect investments. We do, however, want to protect the government's rights.

What is it about NAFTA that we do not like? What is it about NAFTA's investment protection provisions that we object to? Several things have become obvious, and some affect Canada.

First of all, there is the definition of “expropriation”, which is much too broad. As an answer for my hon. colleague on this side, I can say that we recognize—as the OECD rules recognize—that in cases of expropriation, compensation should be at fair market value.

Under NAFTA, expropriation now means the evaluation of potential losses. This interpretation has given rise to some high-dollar complaints. Imagine what this means when complaints are lodged against governments, in particular against underdeveloped countries. Just one complaint could cause the government to refuse to protect the environment, for example. Thus, this is an extremely damaging provision.

The second point is that not only are the investors protected, but their backers are protected as well. Even if an investor decided to accept the legislation passed by a government, a bank in another country could decide to sue. That is excessive.

The third and most important point for us is the famous investor-state redress provisions, which enable foreign companies to take their case before special tribunals. I am speaking specifically of foreign companies, because native companies do not have this right of recourse. It is completely disproportionate to give economic parties—which may be quite large—the status of international parties because they are acting under trade treaties, which is true, but treaties nonetheless.

Under this provision, governments can be attacked directly for any measures they may take that would deprive companies of potential profit.

Consider our position in terms of overall globalization and the size of investments. These investments are quite significant: $4,000 billion in one year, with over $430 billion for Canada alone.

These investments go from developed countries to underdeveloped countries that want them, but if these investments come with similar strings attached, there are constraints for the governments of developed countries, but there are significant restraints for the governments of underdeveloped countries, even without waiting for a final ruling from a special tribunal. A single complaint, along with astronomical profit losses, might mean that a government that had improved its environmental record, for example, would regress.

I want to tell the Chair that the Standing Committee on Foreign Affairs and International Trade heard many witnesses prior to the free trade of the Americas negotiations. In fact, the FTAA contains what we object to in NAFTA, and we want this removed, but we have read the FTAA documents and they are identical to NAFTA. This is unacceptable, and we will continue to fight this.

In the Standing Committee on Foreign Affairs and International Trade, all the witnesses disagreed with the NAFTA provisions, except for one person who worked for a big legal firm, so this is understandable.

For those who were strongly opposed to the MAI, the multilateral agreement on investment, which the OECD dropped, I would like to point out that the MAI also uses the same terms as NAFTA.

It is not a matter of not protecting private company investment, but rather of protecting the right, the power of governments to use the measures, policies and decisions available to them to protect the public good and not allowing foreign companies—I stress this because native companies do not have recourse to these mechanisms—to complain about one of these decisions which could possibly cause them to lose money and which they would be entitled to complain about before a special NAFTA tribunal if it applied to NAFTA, or an FTAA tribunal if it related to FTAA, or whatever.

I would also like to point out that Canada, which signed investment protection agreements with 22 countries, adopted OECD rules until 1994 without complaint. However, with the implementation of NAFTA it adopted NAFTA rules and in all these agreements with developing countries, companies which invest are given the right to challenge the legislation of the governments of developing countries.

Canada and the United States were not alone in adopting these provisions. All the other countries, in their bilateral agreements with other countries, retained the initial OECD rules and those in effect at the WTO, rules such as respect for the right of ownership regardless of the nationality of the owner; no nationalization without fair financial compensation; ban on treating assets within a country differently depending on whether they are domestically or foreign owned; free movement of capital resulting from an operation and the disposition of investments.

I hope my colleagues in this House will take advantage of this opportunity to speak to this extremely important issue.

I am talking about the future ability of governments to fulfil their responsibilities vis-à-vis increasingly large investors with increasingly large assets, whose primary concern is not the common good. This is a vote to protect the right of governments, large or small, to defend the common good.

Free Trade AgreementsPrivate Members' Business

11:35 a.m.


Charles Caccia Liberal Davenport, ON

Mr. Speaker, the member for Joliette ought to be congratulated for his motion, which deserves to be supported fully. In light of what has been said so far, it is necessary and worthwhile to put on record some facts as to how this chapter has affected in reality the three countries involved.

Fact number one: the case of Ethyl Corporation has affected Canada. The amount claimed by Ethyl Corporation was $250 million. The settlement, which was paid by the taxpayers of Canada, was $18 million, with an apology on the part of the Government of Canada for having passed the legislation which was intended to protect the health of Canadians by banning manganese from gasoline as an additive.

Second, S.D. Myers Inc., an other American corporation, has claimed an amount under NAFTA of $20 million. It was awarded $5 million plus interest and damages.

Third, Sun Belt Water Inc. is an American water firm that is challenging British Columbia's water protection legislation and its moratorium on the export of bulk water. How much is it asking? It is asking for $10.5 billion under NAFTA. Imagine that. This matter is still undecided, thank God.

The next item is from Pope & Talbot Inc., a U.S. lumber company. It claimed the amount of $508 million. The tribunal ruled that Canada violated the NAFTA article, and Canada was ordered to pay $460,000 U.S. plus damages, plus interest, plus legal costs, for a total of $915,000.

These are the effects, and I am glad to see that the member for Etobicoke Centre, for whom I have the greatest respect, is listening to this because a few moments ago he said that so far it was damaging all three partners. That is not so. It has damaged Canada and Mexico but it has not yet damaged the U.S. Is that not strange?

What are we facing here with these facts? What is the situation? What is the reality? The treatment of foreign investors, under NAFTA, has to be better than our national investors. In other words, we have to give special treatment. We have a promotion of corporate rights which do not really make any sense.

It is claimed by previous speakers, including the parliamentary secretary in the last debate, that the NAFTA and this whole approach is for the promotion of prosperity, so is big business seeing the promotion of prosperity? There is no evidence to the fact that NAFTA has promoted prosperity in terms of reducing the gap between rich and poor, for instance.

A study by the Environment Commission in Montreal recently on this very subject came to the conclusion that there was been no impact one way or the other 10 years after NAFTA. In other words, it has had no impact on improving the condition of the lower incomes in relation to the higher incomes. It is neutral, so to say, and it is a document which is a public document available to everybody. This damages not only the Canadians and the Mexicans by virtue of the figures I mentioned earlier, but it also damages the significance of Parliament.

Some of us at least have been asking for some time for an interpretive statement to improve or to modify the way this chapter is interpreted. We have been told by the earlier negotiators that it has not been intended to be interpreted the way it has been interpreted in recent times.

We do not seem to be getting anywhere despite the assurance given by the former parliamentary secretary when he spoke in the House on the adjournment proceeding a couple of months ago.

The fact is that the NAFTA tribunals are not open to the public. The tribunals conduct their proceedings in secret. They grant investors a powerful new set of rights in their business dealings when they go abroad. However, they assign no new responsibilities. The net result is that NAFTA increases the powers of the corporate side and it diminishes the powers of government. We see democratically elected governments becoming less relevant and losing power to corporations. Is that what we want? I certainly do not think that we want that.

The signing of international trade agreements should not lead to a reduction of the state role in protecting the public good. This is what is happening at the moment. Imagine the case that I mentioned earlier by Sun Belt Water suing the government of British Columbia for $10.5 billion. God knows what it will be given in the settlement and imagine the impact.

There is plenty of evidence that this particular chapter needs to be interpreted in a new manner. However, that does not seem to get anywhere because we need the consent of all three international trade ministers to do that. If one disagrees, then the matter is not put on the agenda.

When we put this in other terms, what NAFTA does here is it allows corporations to make profits which corporations would not be able to make under national laws. However, under international laws, namely NAFTA, they can make a profit as Ethyl did. It claimed $250 million. Imagine the nerve of claiming $250 million because of a piece of legislation passed by the House of Commons and supported by the federal government. This was in 1999 and as I mentioned earlier, the company received $18 million in compensation in the end as a result of a piece of legislation passed by Parliament.

It is a perverse reversal of democratically adopted rules by a tribunal which acts in secrecy, is not democratically chosen, and acts on on the strength of an international agreement about which we ourselves have profound doubts. However, we do not seem to be able to do anything about it. That is the essence of this issue.

I wish to compliment and salute the member for Joliette for bringing the motion forward. It deserves the support of anyone who believes that foreign investors should have access only to the complaint mechanisms that domestic investors have, unlike the Canadian Council of Chief Executives of course, which produced these two pages of nonsense. That would be the right approach and I submit it for your consideration.

Free Trade AgreementsPrivate Members' Business

11:45 a.m.

Progressive Conservative

Bill Casey Progressive Conservative Cumberland—Colchester, NS

Mr. Speaker, I am pleased to speak to this private member's motion today. Perhaps the member understands my interest in this after what the Progressive Conservative Party went through last week at its convention. A proposal was made indicating that the free trade agreement should be reviewed and it seemed to catch the attention of the media.

I have taken stock here today and I note that there are four parties in the House who are taking this issue even further than we suggested at our convention. We suggested the free trade agreement should be reviewed by a blue ribbon committee, but at least four parties in the House have said it should be renegotiated, far more than the Conservative Party ever considered. I hope the media, who was critical of our position on this issue, is watching this today.

Motion No. 391 points out aspects of the free trade agreement that need to be reviewed. Questions in the last two weeks have focused on international trade with the United States which again points out problems with the NAFTA agreement. Nobody is suggesting that it be thrown out or backed up or redone.

I listened to members from three parties on this issue. I understand the NDP supports this motion which calls for a renegotiation of NAFTA. The Progressive Conservative Party is not going that far. We think it should be reviewed. On the other hand, however, there are examples of why it should be reviewed. Softwood lumber, the potato issue, steel, and durum wheat are good reasons why the agreement should be reviewed.

These are some of the problems with regard to free trade with the United States. This gives me reason to believe that maybe some things could be improved in the agreement. This is a timely debate for me. It was interesting to hear that four parties out of five, and I am not sure about the fifth party, agree with my party that the free trade agreement should at least be reviewed.

The Progressive Conservative Party brought in free trade and the benefits for Canada have been huge. Each province has benefited from free trade. My own province of Nova Scotia has experienced a 211% increase in trade with the U.S. between 1988 and 2002, and it continues to grow. Ontario has experienced an increase of 200%; Manitoba 335%; and Alberta 380% since free trade came in. These are huge increases and they are reflected in an enormous number of new jobs. Imagine what it would be like if we did not have these increases because of free trade.

However, nothing is perfect. As the international trade critic, I know that things are not perfect with the free trade agreement, but hopefully they can be improved. After 10 or 12 years the agreement should be reviewed, and the Progressive Conservative Party fully intends to do that and hopefully come back to the House with some recommendations that will enhance it. Perhaps the government will adopt those recommendations.

Today's proposal deals with one of the most controversial aspects of free trade which is the investment side of it. From my own personal experience and my contacts with people across the country, this aspect raises more concern than anything.

We welcome the opportunity to participate in the debate. As I said, the Progressive Conservative Party would make this a part of our overall review of the free trade agreement which will be announced shortly. The troublesome aspect of the investment part, the lack of transparency, and the unfair treatment from country to country will be addressed.

The Progressive Conservative Party endorses this motion as well as an extended review.

Free Trade AgreementsPrivate Members' Business

11:50 a.m.


Judy Wasylycia-Leis NDP Winnipeg North Centre, MB

Mr. Speaker, I am pleased to reiterate the strong support of the New Democratic Party caucus in terms of this motion and to congratulate the member for Joliette for his initiative in this regard.

The NDP is the only party that has been consistent on this matter and on the need to rid our free trade agreement of the chapter 11 investor-state provision. There is absolutely no doubt in our minds that this provision is not rules based, as the Alliance would have us believe. It is not a positive addition to our decision making process, as the Liberals would have us believe. In fact, it is a tool to deny Parliament the right to make decisions on the basis of what is best for Canada on the basis of our sovereignty.

Let us be absolutely clear what chapter 11 does regarding the investor-state dispute resolution system. There is no question that this provision is alone among the world's trade treaties that gives foreign investors and corporations the right to sue governments directly. All other pacts are state to state. This arrangement is unique and it has devastating consequences for Canada's ability to determine its own future.

Let us apply that specifically to the case of health care and our ability as a nation to preserve the medicare model. There is no question, by all accounts, that chapter 11 may deny Canada the ability to preserve medicare in the face of threats from investors in the United States and from large private health care corporations who want a piece of our health care market. We may be on precarious ground in terms of holding back that kind of invasion of our health care system and preserving a non-profit and non investor-owned system. That has been reiterated time and time again. It was part of the Roy Romanow commission report and must be taken seriously by the government.

Jon Johnson of the Toronto law firm of Goodmans LLP was one of the contributors to the Roy Romanow report. He said:

The potential effect of the NAFTA investment provisions is compounded by the private rights of action conferred by NAFTA on U.S. and Mexican investors. However, there are no private rights of action under the GATS or under any other agreement under the World Trade Organization.

NAFTA's Chapter 11 nationalization expropriation provisions and accompanying threats of investor lawsuits demanding vast sums in compensation could stop governments from expanding universal medicare into areas now covered by the private market such as dental care, home care and pharmacare.

Substantial interference could occur in the health context in Canada if the public component of the system were expanded in a way that increased the exclusion of private firms.

We can see that it is chapter 11 that poses the greatest threat to our ability as a nation to preserve medicare. Contrary to what the Alliance said today, this is not a rules based approach to trade. Canadians support a rules based approach to trade. They support fair trade, however, they do not support a free trade agreement that gives corporations and other national entities control over our destiny as a nation.

We have a right as members of Parliament, as Canadians, to create and put in place programs that are in our best interests and consistent with our values. There is no way this country should be party to an agreement that takes away that right of sovereignty.

Today we stand here in absolute support of the motion. We have noted the difficult position of the Conservatives in the House today, following their leadership convention where there are two dynamics at play. Clearly the likes of David Orchard, if he were in the House today, would be standing up and saying yes to the motion and no to investor state dispute settlement systems. This is a dilemma for the Conservatives that we hope will be clarified as the days proceed.

Obviously the Liberals have yet to see the errors of their ways. The member for Etobicoke North stood up and claimed this to be a most important aspect of free trade and one that perhaps would be reviewed, but that it has had great benefits to Canada while ignoring all the facts in terms of the Ethyl Corporation, Metalclad, the postal service, the serious threat to health care and other publicly delivered national social programs.

We should stand together in the House and support the motion to ensure we rid our country of such a sell-out of Canadian sovereignty and get back to working on fair trade and rules based trade that is in the best interest of all Canadians.

Free Trade AgreementsPrivate Members' Business

11:55 a.m.


Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I am happy to use a couple of minutes to add my support to the motion put forward by the member for Joliette. While we in the New Democratic Party support fair trade, we believe that some of the free trade agreements that our country has entered into on our behalf were badly negotiated, have left this country vulnerable and have actually jeopardized the whole issue of Canadian sovereignty.

My hon. colleague from Winnipeg North Centre has made the point that when we lose our economic sovereignty, we eventually lose our national sovereignty altogether.

The most galling aspect of the free trade agreements that we cite today and the one we believe was the most badly negotiated on our behalf was the chapter 11 aspect that gave corporations essentially the right to sue. It gives corporations nation state status in the sense that they can sue the nation state of Canada for lost opportunity. One of the examples that we predict will be a big issue is water. As soon as water becomes a marketable commodity, if an American corporation or any foreign corporation with which we have a free trade deal with the chapter 11 clause feel they should have a right to get into that marketplace and to deal in the marketing of fresh water and we denied them that right, we could be sued for lost opportunity.

Most Canadians would find that to be an absurd situation, to make us so vulnerable and to put us in a vulnerable position of that nature, but that is exactly what the negotiators of the free trade agreement have done. We have examples where in our country we saw fit to ban the gasoline additive MMT because we felt it was not healthy for our children to be breathing this gasoline additive. The American manufacturer of that additive said that we were interfering with its rights or opportunities to sell that commodity. It sued Canada for lost opportunity and Canada paid. This will become a mini industry by itself. If corporations were smart they would enter into this type of thing deliberately and find something that Canada is opposed to on principle and then sue it for lost opportunity. Why would we do that?

I have made that argument before. I believe that the people we sent down to negotiate the FTA and NAFTA were like Jack and the Beanstalk going to the market and trading the family cow for three beans, none of which has yet actually sprouted. In other words, we either settled too soon or we left glaring omissions in the deal where we should have taken steps to protect Canadian sovereignty.

The member's motion makes it clear that Canada, as we enter into free trade agreements with our trading partners around the world, should never again have a clause in a free trade agreement, such as chapter 11, that leaves Canada vulnerable and is a disservice to all Canadians in the interest of expanding trade. It compromises and surrenders Canadian sovereignty, as the member for Halifax so eloquently pointed out.

I support the motion. I urge all members of the House, even in their zeal to support freer trade, to take this cautionary note put forward by the member for Joliette to not have Canada enter into any trade agreements that would so fundamentally jeopardize our Canadian sovereignty.

Free Trade AgreementsPrivate Members' Business



Pierre Paquette Bloc Joliette, QC

Mr. Speaker, allow me to reread the motion, because that will show that it in no way impedes the liberalization of trade. Nor does it hinder the protection of investments; it puts the common good above trade liberalization and investment protection.

It seems to me that for parliamentarians, it is common sense. We are here to represent the people of Canada and Quebec. We are not here to represent the interests of multinational corporations in Canada first. So, this motion, which I am about to read, just makes good sense.

That, in the opinion of this House, any freetrade agreement entered into by Canada, whether bilateral ormultilateral, must include rules for the protection of foreigninvestments which do not violate the ability of parliamentary and government institutions to act, particularly on behalf of the common good, and must exclude any investor-state redress provisions and consequently, the Canadian government must enter into negotiations with its American and Mexican partners with a view to bringing the North American Free Trade Agreement (NAFTA) in line with the aforementioned principles.

I have trouble understanding why anyone would vote against this motion. I have received more than 300 messages of support from throughout Canada and Quebec that I will be forwarding to the Minister for International Trade tomorrow to get him to reflect before the vote. I hope that the Liberal Party of Canada will change the position announced by the parliamentary secretary, because I believe that it would be inconsistent with a number of statements the Minister for International Trade has made in the past.

Some of the major organizations that have supported my motion include the Canadian Labour Congress, the Union des artistes, the Quebec Federation of Labour (FTQ) and many of its affiliated unions, the CNTU and many of its affiliated unions and federations, the Centrale des syndicats du Québec and many of its unions and federations, Oxfam Quebec, the Syndicat de la fonction publique du Québec, Option-consommateurs, the Fédération étudiante collégiale du Québec, the Union des producteurs agricoles de Lanaudière, the Fédération des femmes du Québec, Carrefour Tiers-Monde, members of the Centre international de solidarité ouvrière, members of ATTAC-Québec, Équiterre, the North American Forum on Integration, the Syndicat de l'enseignement de l'ouest de Montréal, the Conseil régional de l'environnement de Montréal, Plan Nagua, the Grey Sisters of the Immaculate Conception, Maison provinciale des Ursulines, and the Regroupement national des conseils régionaux de l'environnement du Québec.

So, we can see that it has broad support from unions, women, young people, environmentalists and cultural activists. The party in power ought to be aware of this support, particularly because it seems to me that, if one is opposed to the presence of the equivalent to chapter 11 in the WTO and the FTAA—and that is the position of the Minister of International Trade—if we are going to be consistent, we must also be opposed to this in the bilateral agreements that Canada signs, especially with third world countries that do not have the means to defend themselves.

More then 20 suits have been launched under chapter 11. Half of these requested the lifting of environmental standards. The Kyoto accord is coming into effect. The Americans have not signed that agreement. There will be many more suits under chapter 11 against the Canadian government as soon as the Kyoto protocol, which we have just signed, is implemented, and it is going to be very costly.

What we are asking for is investment protection and that the governments represent the companies instead of the companies representing themselves at the special tribunals, which is precisely what is happening in the case of softwood lumber. Contrary to what the Liberal member said earlier in the case of softwood lumber, it is not the companies who are appearing before the special tribunals, but the Canadian and American governments which are defending themselves.

For all these reasons, I feel that in this House we should vote for Motion No.391, standing in my name, in the interests of the common good, democracy, international solidarity and plain good sense. I am asking all members to think again because voting against this motion is like giving foreign multinational companies the exact same status as the Government of Canada in terms of investment protection.

I feel this is not the right impression to give the Canadian public and foreign countries. This would mean that the interests of a handful of multinational companies would come before the common good of our own companies. I would like to point out that under international rules there is a standard called national treatment by which companies are not to be discriminated against. In the case of Chapter 11, Canadian and Quebec companies are being discriminated against to the benefit of American and Mexican companies. Everything is completely upside down.

Let common sense prevail. I am calling on all members to vote in favour of Motion No.391 standing in my name.

Free Trade AgreementsPrivate Members' Business

12:05 p.m.

The Acting Speaker (Mr. Bélair)

It being 12:07 p.m., the time provided for the debate has expired.

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

Free Trade AgreementsPrivate Members' Business

12:05 p.m.

Some hon. members


Free Trade AgreementsPrivate Members' Business

12:05 p.m.

Some hon. members


Free Trade AgreementsPrivate Members' Business

12:05 p.m.

The Acting Speaker (Mr. Bélair)

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

Free Trade AgreementsPrivate Members' Business

12:05 p.m.

Some hon. members


Free Trade AgreementsPrivate Members' Business

12:05 p.m.

The Acting Speaker (Mr. Bélair)

All those opposed will please say nay.

Free Trade AgreementsPrivate Members' Business

12:05 p.m.

Some hon. members


Free Trade AgreementsPrivate Members' Business

12:05 p.m.

The Acting Speaker (Mr. Bélair)

In my opinion the nays have it.

And more than five members having risen:

Free Trade AgreementsPrivate Members' Business

12:05 p.m.

The Acting Speaker (Mr. Bélair)

Pursuant to Standing Order 93, the recorded division stands deferred until Wednesday, June 11, at the end of government orders.

The House proceeded to the consideration of Bill C-24, an act to amend the Canada Elections Act and the Income Tax Act (political financing), as reported (with amendment) from the committee.

Canada Elections ActGovernment Orders

12:05 p.m.

The Acting Speaker (Mr. Bélair)

There are 15 motions in amendment standing on the Notice Paper for the report stage of Bill C-24.

The Chair will not select Motions Nos. 5 to 7 since they require a royal recommendation.

The Chair will not select Motions Nos. 1 to 3, and 15 because they could have been presented in committee.

All remaining motions have been examined and the Chair is satisfied that they meet the guidelines expressed in the note to Standing Order 76.1(5) regarding the selection of motions in amendment at the report stage.

The motions will be grouped for debate as follows:

Group No. 1 will include Motions Nos. 4, 8, 9, 13 and 14.

Group No. 2 will include Motion No. 11 only.

Group No. 3 will include Motion No. 12 only.

The voting patterns for the motions within each group are available at the table. The Chair will remind the House of each pattern at the time of voting.

I shall now propose Motions Nos. 4, 8, 9, 13 and 14 in Group No. 1 to the House.

Canada Elections ActGovernment Orders

12:10 p.m.

Glengarry—Prescott—Russell Ontario


Don Boudria LiberalMinister of State and Leader of the Government in the House of Commons


That Bill C-24, in Clause 40, be amended by replacing lines 21 to 24 on page 41 with the following:

“(2) An allowance fund for a quarter is the product of

(a) $0.4375 multiplied by the number of valid votes cast in the election referred to in subsection (1), and

(b) the inflation adjustment factor determined under subsection 405.1(1) that is in effect for that quarter.”

That Bill C-24, in Clause 48, be amended by adding after line 22 on page 64 the following:

“(3) The portion of subsection 464(3) of the Act before paragraph (a) is replaced by the following:

(3) An official agent of a candidate shall without delay return to the Receiver General any amount received by him or her under subsection (2) that is more than 60% of the total of”

That Bill C-24, in Clause 49, be amended by adding after line 34 on page 64 the following:

“(2.1) Paragraphs 465(2) (a) and (b) of the Act, as amended by subsections (1) and (2), are replaced by the following:

(a) 60% of the sum of the candidate's paid election expenses and paid personal expenses, less the partial reimbursement made under section 464, and

(b) 60% of the election expenses limit provided for in section 440, less the partial reimbursement made under section 464.”

That Bill C-24, in Clause 72, be amended

(a) by replacing line 43 on page 101 with the following:

“72. (1) For the quarter during which this”

(b) by adding after line 49 on page 101 the following:

“(2) The allowance payable to a registered party under section 435.02 of the Canada Elections Act, as enacted by section 40 of this Act, for the quarter during which this section comes into force and for any remaining quarters of the year during which it comes into force shall be estimated on the basis of the most recent general election preceding the coming into force of this section and paid within 30 days after its coming into force. Subsection 435.02(2) of the Canada Elections Act, as enacted by this Act, applies to that payment with any modifications that may be required.

(3) In the application of sections 435.01 and 435.02 of the Canada Elections Act, as enacted by this Act, any amount paid under subsection (2) in relation to a quarter shall be taken into account. A registered party that received an amount under subsection (2) for a quarter that is in excess of the amount to which it is entitled under those sections for that quarter shall without delay return to the Receiver General the amount of that excess. The Receiver General may reduce any other amount payable to the party by the amount of that excess.”

That Bill C-24 be amended by adding after line 49 on page 101 the following new clause:

“72.1 For the first general election after the coming into force of this section, the reference to “50%” in subsection 435(1) of the Canada Elections Act, as enacted by this Act, shall be read as a reference to “60%”.”

Mr. Speaker, I want to take just two minutes to make a general comment about the first amendment, and, at the same time, thank all the members for their work in committee. I would like to thank, in particular, those members who made recommendations to the government, thereby permitting me to move motions at report stage. I want to thank those members.

Since there are now very few motions at report stage, I am therefore asking all my hon. colleagues in this House to pass them very quickly, so that third reading can take place soon.

I also want to take this opportunity to thank the hon. member for Peterborough for doing an excellent job as chair of the standing committee responsible for considering these motions that will be debated shortly.

I also want to thank the committee for having provided me with a draft of the recommendations to be tabled later this afternoon. This draft enabled me, over the past few days, to amend and improve the bill. This institution called the House of Commons of Canada means a great deal to us, as does the process whereby we represent our constituents here.

I will have an opportunity to go into greater detail during third reading. For now, those are all my comments. I ask all my hon. colleagues, given the very small number of amendments at report stage, to pass them very quickly so that we can conclude consideration of this bill, which is truly a step in the right direction, one which the Right Hon. Prime Minister took with his speech of last June, and, of course, which will ensure the best governance of our country.

Canada Elections ActGovernment Orders

12:10 p.m.

Canadian Alliance

Ted White Canadian Alliance North Vancouver, BC

Mr. Speaker, I am not surprised that the minister only took a couple of minutes. I guess he wants to minimize the exposure to criticism about this bill because it is a huge invasion on the public treasury. He said, also, that he wants to adopt this stage rapidly so we can move on to third reading and get this thing pushed through the House, presumably so he can go home on Friday. However we can just tell by his demeanour that he cannot wait to get his shovel into the public treasury and start loading the cash into the Liberal coffers so the Liberals can pay for their day to day operations.

It is outrageous that the bill is all about paying for the day to day operations of the Liberal Party of Canada, using other people's money. That is what it comes down to. It is so easy to spend other people's money in this place and that is exactly what is happening here. It is a rape and pillage of the public treasury to provide hundreds of millions of dollars a year to political parties that should be raising the money they need from the people they claim to support or to represent. That is what should be happening; not a big shovel into the public treasury to load other people's money into our treasury.

This bill does not even fix the problems it was supposedly produced to address. Even the president of the Liberal Party, Stephen LeDrew, said that this bill would increase cynicism. At committee hearings, when we had witnesses before the committee on the bill, he said that it would increase the cynicism among voters.

The party on this side of the House, the Canadian Alliance, agrees with that interpretation.

My colleague from South Surrey—White Rock—Langley did a survey in her riding and I have a done a casual survey in mine, hers was more formal, asking people what they thought of the idea of taxpayer money being used to subsidize the day to day operations of political parties. The results were 95% to 96% of the people are opposed. They would rather have that $1 or $2, or whatever it is, in their pockets to help support their families and to spend wisely on the economy of the country rather than giving it to the Liberal Party of Canada, the Canadian Alliance, the PCs and the NDP.

My party, the Canadian Alliance, has done a good job of raising the money we need from individual supporters over all the years, and we would have been happy to stay with the status quo.

It is not too late for the government to abandon this exercise of attack on the public treasury. It could abandon it at this point. I certainly hope the Liberals see the light.

Also, I would like to mention that the number of amendments which have come through on the bill illustrate how badly it has been put together. It is full of extremely complicated wording. We found many errors during the committee hearings that the government was constantly introducing technical amendments to fix problems it had discovered. I identified two problems for the minister, not because I supported the intent of the bill but because if there were to be a bill passed in this place, it may as well be correct. They continue to find problems. One of the motions before us for debate, I am not sure if it is in this first group, again is to fix a technical problem.

The government has not done due diligence on this bill. It was rushed into this place because the Prime Minister wanted it, before there had been proper research.

During the weekend, I noticed a CP Newswire item that said the Prime Minister won the dubious honour of being the stupidest person in Canada. Members might ask “What does that have to do with this bill?” I actually disagree with the voters who made that decision during the weekend because I do not think that the Prime Minister is stupid, but I think he is very crafty. I think he introduced this bill to diffuse a big problem that was in this place, and that was the problem that we were finding the huge donations from supporters of the Liberal Party of Canada, and those donors subsequently were rewarded with money from the public treasury in the form of very lucrative contracts.

I know that when my colleagues get up to speak on this bill, some of them will be using examples of those types of huge contracts that were awarded to people who had been generous donors to the Liberal Party. I will give them the chance to do that because I would like to move on to some of the other things that the bill fails to do and fails to do even in this latest batch of motions we are debating right now.

First, Bill C-24 fails to fix the underlying problem of the awarding of government grants, government contracts and loans, most of which end up being forgivable to supporters of the party in power. If anything, Bill C-24 will make it more difficult to uncover such behaviour because now huge corporations, like Bombardier, which have traditionally supported the Liberal Party to get contracts, will not even have to front up with any money. They will still get the contracts, they will still get the favours and we will not have any way of tracking it down unless we go through a very complex reporting procedure investigating whether individuals have used their ability to donate individually to try to influence the government.

Bill C-24 also fails to correct the 50 candidate rule. That 50 candidate rule, which was struck down, was put in place by this government. It required small or emerging parties to run 50 candidates in an election to be recognized as a party and have tax receipt status. We felt it was wrong. We have tried for years to get the government to agree to make it 12 candidates, which is the same as the number required for party recognition in the House. All the small parties out there in the other world agree with 12 being a reasonable number. The courts have struck down 50 as unreasonable. In fact in the court case in Ontario, which struck down the 50 candidate rule, the judge said that two people were a party.

That minister has a history of bringing bills to this place that end up costing taxpayers tens of millions of dollars in legal fees because of charter challenges. When I get the opportunity to speak at third reading, I will highlight some weaknesses in the bill that will open it to court challenges. However that minister has a history of introducing such bills. It is very problematic.

Here again, we have a problem that the Liberals could have fixed. It is being court challenged. Because of his failure to change the 50 candidate rule to 12, when he had the opportunity while we were amending the Elections Act, I believe the courts will prevail and we will be forced to accept two as the number. It was very foolish of the minister. He should have dealt with it while we were dealing with Bill C-24.

The bill fails to end patronage appointments to positions in Elections Canada. Since I first came here in 1993, and when I joined the Reform Party back in 1988, it has been a policy of this party to try to get the government to allow Elections Canada to select its own returning officers in a non-partisan way based on skill. Instead, the government insists on a system of political patronage appointments to Elections Canada. Returning officers are selected by the Prime Minister, and when they do not do their job, the Chief Elections Officer cannot get rid of them. In fact he mentioned during committee hearings that he presently had 11 returning officers who were not doing their job. He cannot fire them because he has to get the Prime Minister to agree.

The Bloc introduced an amendment in committee which was defeated, so unfortunately, I cannot do it here in the House at this stage. The amendment was to get the government to move to a system of proper appointments of these people, and not being political patronage appointments.

I realize I do not have much time. What I need to do now is express my frustration in a very meaningful manner, by moving an amendment. I move:

That Motion No. 4 be amended by replacing the amount $0.4375 with the amount $0.01.

Canada Elections ActGovernment Orders

12:20 p.m.

The Acting Speaker (Mr. Bélair)

I am advised by the Clerk that it should be taken into deliberation with a ruling in the next few minutes or so.

Canada Elections ActGovernment Orders

12:20 p.m.


Paul Crête Bloc Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC

Mr. Speaker, I thank you for allowing me to speak in this debate on the political party financing bill.

My first reaction to this bill is, “Finally”. Finally Canada will catch up to Quebec, in part at least, when it comes to political party financing. The bill will clarify many things and allow for corporations to contribute to democracy in an active and independent manner. That is what this bill and the amendments resulting from consultations contain.

I also feel that we must vote on this bill as soon as possible, because the member for LaSalle—Émard, who may be the next Prime Minister, seems to take an approach that is much closer to that of the Canadian Alliance. He has tried all kinds of ways, via members who support him, to slow down passage of this bill and to find ways that would allow corporations to continue to finance parties. We know that he himself comes from a business background, and he is probably not happy with the fact that this bill takes away from the influence that business has.

I think that it is important to realize that this bill and its amendments will help prevent the types of abuse that occurred in the past. We can be sure that there will be one less way to exercise undue influence over government activities.

Let us remember the scandals at Human Resources Development Canada, the sponsorship scandal. It is still making the news: today The Globe and Mail reported that Canada's ambassador to Denmark, Mr. Gagliano—who used to be the Minister of Public Works and Government Services—had managed to set up a system of measures and activities that allowed the Liberal Party of Canada to dole out patronage.

This type of problem flourishes when the environment allows it. I think we need to try to change this environment, and this bill before us allows for this to happen, at least partially, and it will improve democracy across Canada.

I think that this is interesting. Instead of having a process that leads to a question in the House or a newspaper article that sheds light on unacceptable and inadequate behaviour that frequently borders on dishonesty, the government, after a few days of questions, refers these matters to the RCMP. Probably, it is conducting these investigations in good faith but, ultimately, it is used like a sleeping pill to try to calm things down.

Obviously, in the HRDC and the sponsorship scandals, there are still dozens of incomplete investigations, which have not been thorough enough. Nothing is being done to complete these investigations. Consequently, the government has often used the RCMP to put out fires and avoid questions in this House.

With regard to the political party financing legislation, as I keep telling all Quebeckers, Quebec passed similar legislation some 25 years ago now, which restored order to political party financing, as well as overall democracy and the way in which governments are influenced.

I hope the bill on which we are voting today will have the same kind of influence on the federal government to avoid the repetition of such scandals. This can be accomplished by means of this bill, but possibly also by other means, which must continue to be developed, and particularly by means of the fundamental honesty by which parliamentarians must place the public interest before their own interests.

With the passage of this bill, I believe we will have an opportunity in future to avoid a repetition of scandals like those involving Human Resources Development, the sponsorships, and all the business of people close to members or to the party in power being able to benefit from government actions.

We had very clear and definite examples of this only weeks ago. There was a direct correlation between the amount donated to the party in power and the amounts received in contracts; the amounts were virtually the same. Let us hope this sort of situation will be remedied. At least peoples' desire to do this kind of thing will be done away with by tightening up the rules on corporate funding. I think this is a step in the right direction.

I also hope this legislation will be implemented promptly. There are no reasons left for delaying it. We may be a year away from the next election campaign. We must ensure that this improvement to electoral mores is in place for the next campaign. Otherwise, it will be nothing more than smoke and mirrors and hoping to gain some time.

As for the amendment proposed by a member who directly supports the member for LaSalle—Émard, I hope it will be rejected by this House and that at the end of the day we will have a bill that can be passed as soon as possible. Thus we will be able to assure the population that we have at least plugged some of the loopholes that jeopardized the transparency necessary to the work of a government.

This bill would be a kind of cornerstone, which is why I hope it will go quickly through report stage.

Canada Elections ActGovernment Orders

12:25 p.m.

The Acting Speaker (Mr. Bélair)

I am ready to rule on the tabling of the first amendment, the amendment to Motion No. 4. The Chair finds the amendment acceptable.