Mr. Speaker, it is a pleasure to speak to Bill C-53, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States.
The convention is also known as the ICSID Convention. We are renowned in the House for using acronyms but it is far simpler to use that when we are referring to the International Centre for the Settlement of Investment Disputes established by the convention.
I was first made aware of ICSID by a constituent of mine, a Mr. David Haigh, an internationally renowned dispute settlement arbitrator and a lawyer with Burnet, Duckworth and Palmer in Calgary, who has long advocated for Canada to bring ICSID into force. This gentlemen brought this to my attention back in my dark days when I was in opposition. We tried at that time to bring it forward at that time but were unsuccessful. However, now that we have a new government in this country we are actually able to get on with creating a business environment that is friendly to businesses.
I know that David, along with many Canadian investors, will be pleased that the government is moving forward with Bill C-53, and it is my pleasure to take part in the debate today.
Before a country can ratify the ICSID Convention, it needs to pass legislation providing for ICSID awards to be enforceable in its courts. For Canada, this means that it must pass and bring the act into force. In addition, any province or territory that is designated a constituent subdivision must bring similar legislation into force.
I would first like to discuss some of the pressing reasons for hastening Canada's ratification of the convention. I hesitate to use “hasten” because, as my hon. colleague just raised, we have been working on this since 1966.
There are three reasons why Canada should become a party to the ICSID Convention. It would provide additional protection to Canadian investors abroad by allowing them to have recourse to ICSID arbitration in their contracts with foreign states. It would also allow investors of Canada and foreign investors in Canada to bring investment claims under ICSID arbitral rules where such clauses are contained in our foreign investment protection agreements and free trade agreements. Also, it would contribute to reinforcing Canada's image as an investment friendly country.
I will tell the House more about the other advantages. When Canada ratifies the ICSID Convention, Canadian businesses investing abroad would finally be afforded the same level of protection as their competitors. There are numerous disadvantages associated with the absence of Canada from this convention. Canadian businesses are hurt. Even though Canadian investment abroad continues to rise, the ability of Canadian businesses to arbitrate investor state disputes is hurt by the fact that they must arbitrate without the infrastructure that ICSID would and could afford them.
Investors prefer ICSID to other arbitration mechanisms for many reasons, such as: the ICSID regime is an extremely efficient mechanism for the resolution of investment disputes; it provides better guarantees regarding enforcement of awards and more limited local court intervention; and ICSID's roster of arbitrators gives investors access to well-qualified arbitrators at ICSID at controlled rates and with extensive experience in international investment arbitration.
Since Canada has not ratified ICSID Convention, we are not granted a voice on ICSID's administrative council and cannot vote on changes to the ICSID arbitral rules.
I will turn now to the second advantage of ICSID: improving the dispute settlement process available under our treaties.
NAFTA and Canada's foreign investment protection agreements, or FIPAs, provide for ICSID dispute settlement as one of several options. However, up to now this option could not be used. Ratification of ICSID will provide investors with the option to use ICSID to resolve certain investor state disputes.
Chapter 11 of NAFTA provides that ICSID arbitrations may be used in cases where both the state of the complaining investor and the state complained against are party to ICSID. The U.S. is party to ICSID but not Mexico.
In the case of FIPA, most of our FIPA partners are already party to the ICSID convention. Consequently, when Canada ratifies the ICSID convention, arbitration using ICSID will become available under those agreements.
My final point is a simple one. Canada's absence from ICSID does little to augment our international image as a country which is open to free trade and foreign investment.
Already, as earlier mentioned, 143 countries are party to ICSID. It is time for Canada as well to become a party to ICSID. I will now explain why ratification is increasingly urgent.
First, we do not know when an investment dispute might arise in which Canadian membership in ICSID might be an important factor in preserving a Canadian investor's rights. Periodically, and again this year, we have been approached by investors who could have benefited significantly if Canada had already ratified the convention.
Second, some states that have ratified ICSID restrict enforcement of investor state arbitral awards unless such awards are made by an ICSID tribunal. It is difficult to persuade such a state to modify this practice when a solution is as simple as Canadian ratification of ICSID. Yet, until there is a solution, Canadian investors lack the protection provided by the availability of effective investor state dispute settlement mechanisms.
The Canadian business and legal communities support Canada's ratification of the ICSID convention.
The provinces and territories support ICSID. The convention allows Canada to designate provinces or territories as constituent subdivisions that will also be able to use the ICSID arbitration for disputes with international investors.
The Chamber of Commerce passed a policy resolution unanimously. Over 200 local chambers of commerce from coast to coast, at their AGM in September of 2006, passed a resolution which calls on the Government of Canada to ratify this convention.
I urge the House to listen to the call of Canada's investors, legal community and constituents like Mr. Haigh, and give expedient consideration to the bill in the interests of Canada's continuing international stature and healthy economy.