With respect to Bill C-53 more specifically, we can note the following. While it may appear complex because the Convention on the Settlement of Investment Disputes between States and Nationals of Other States is appended to it, also called the Washington treaty, Bill C-53 is relatively simple. It is only a dozen clauses on three pages, integrating into domestic law the requirements under the provisions of the Washington treaty.
Regarding arbitration and conciliation proceedings commenced after its coming into force, the bill provides, in clause 4, that the International Centre for Settlement of Investment Disputes and its personnel have the privileges and immunities, even fiscally, that it needs to operate in Canada. In clause 8, it provides for the legal recognition of arbitration awards rendered by the centre. Clause 7 prohibits, as required under the convention, proceedings before national tribunals on the substance of matters that have already been determined by the ICSID. Under clause 9, they are further prohibited from determining matters under arbitration.
These provisions may be startling in that they take away from national legislation. They are, however, pivotal to the functioning of international arbitration tribunals. Indeed, in many countries, the judicial system is not separate and independent from the political system. That is precisely why investment agreements call for neutral arbitrators.
If national tribunals were allowed to reverse arbitration awards or to have parallel proceedings on matters already under arbitration, it would be pointless to have international arbitration tribunals, and the safeguards in investment protection agreements would hardly be worthwhile.
Under clause 6, the bill makes awards binding on the federal government. This means that Ottawa would be bound by an arbitral award that might require it, for example, to provide compensation to an injured investor. Only the federal government is bound by the bill, not the provinces. In fact, apart from chapter 11 of NAFTA, which is binding on the provinces because they joined NAFTA, no bilateral agreement to protect investments is binding on the provinces.
If, for example, a province passed a measure that injures a foreign investor who is covered by an agreement to protect investments and ICSID ordered that he should be compensated, Ottawa would be responsible for paying. It may seem absurd, but that is how it is under the Constitution. The provinces are fully sovereign in their areas of jurisdiction and Ottawa cannot unilaterally arrogate one of their powers or impose obligations on them by concluding an international treaty. Anything else would amount to depriving them of powers conferred on them by the Constitution, and the courts have refused to do that.
That is why Quebec has always insisted on being closely associated with all stages of the entire process for concluding international treaties. That is the basis of the Gérin-Lajoie doctrine.
The federal government’s refusal to respect the logic of the division of powers and its wrongful arrogation of exclusive control over international relations not only hurts Quebec but is frankly dysfunctional. Once Canada ratifies this convention and joins ICSID, the provinces can do the same if they want. If they want, they can include clauses in the contracts they sign with investors providing for recourse to ICSID. Ottawa’s ratification does not impose any obligations whatsoever on Quebec or the provinces, although it does add further arrows to their quiver in their search for foreign investment.
Finally, it was the Uniform Law Conference of Canada consisting of representatives from the justice departments of all the provinces, including Quebec, and from the federal government that recommended five years ago that the federal government should join ICSID, ratify the convention and implement it. That would be the effect of Bill C-53.
In clause 11, Bill C-53 gives the government the power to designate conciliators and arbitrators in cases involving it that fall under ICSID.
There are generally three people on the arbitral tribunals. Each country that is party to a dispute appoints an arbitrator and these two arbitrators then agree on a third, who acts as the president.
It is in light of these considerations that the Bloc Québécois supports Bill C-53.