Madam Speaker, I am pleased to speak on behalf of the Bloc Québécois about Bill C-24, an act to implement the free trade agreement between Canada and the Republic of Peru, the agreement on the environment between Canada and the Republic of Peru and the agreement on labour cooperation between Canada and the Republic of Peru.
The Bloc Québécois is opposed to the Conservative government's strategy, which consists in making piecemeal agreements. Instead, we support a multilateral approach. The current economic crisis clearly shows that a market economy can work properly only if it is regulated and stabilized through an institutional, political and ethical framework. Rather than signing piecemeal agreements, Canada should work within the WTO to ensure that the rules governing international trade are the same for everyone.
The Bloc Québécois believes that trade can contribute to the prosperity of nations and, in that sense, that it can be a major social and economic development tool. However, this can only be the case if trade agreements include measures that will ensure sustainable development and that will promote the development of the populations involved. The Canada-Peru free trade agreement includes a clause to protect investments that is patterned on NAFTA's chapter 11 and that will allow businesses to sue governments. To include a chapter protecting investments could impede Peru's social and economic development.
Peru is a minor trading partner for Quebec. Quebec's exports to Peru represent 0.14% of total exports from Quebec, and Quebec has a $174 million negative trade balance.
Canada's main business activity in Peru is in the mining sector, and Peru's track record on worker protection in that sector is hardly a glowing one. In the absence of any real policy to hold Canadian mining companies accountable, ratifying this agreement will allow those companies to expand their activities without being subject to any rules or consequences when they pollute or when they flout human rights. Given the provisions of this bill, it should come as no surprise that the Bloc Québécois is opposed to it.
The investment protection agreement in the free trade agreement with Peru is a copy of chapter 11 of NAFTA, which allows investors from member states in the North American Free Trade Zone to claim compensation from governments of another party to NAFTA when they believe they have incurred a loss as a result of the adoption of regulatory measures that modify existing business operating conditions. The regulatory or legislative changes must, however, be such that they can be considered to be direct or indirect expropriation or a measure tantamount to an expropriation. NAFTA is the only major free trade agreement to which Canada is a party that contains such broad provisions regarding the treatment to be granted to investors from other parties.
Because the free trade agreement with Peru contains a similar clause, the Bloc Québécois believes that it is not in Quebec's interests to adhere to the agreement and is opposed to ratifying it. In fact, the free circulation of goods can hardly not go hand in hand with the free circulation of capital. Where specific provisions are not incorporated into free trade agreements, bilateral agreements generally provide for the protection of investments coming from the other party. All such agreements contain substantially similar provisions, that is, a neutral arbitration procedure in the event of disputes between the foreign investor and the host state of the investment. There are currently over 1,800 bilateral agreements of this type in the world.
The provisions of chapter 11 of NAFTA governing investments have been called into question. They are at the root of numerous proceedings that have been brought against various governments in Mexico, the United States and Canada and sometimes result in millions of dollars in compensation being awarded. In a nutshell, chapter 11 defines a complete scheme to govern investments. In addition, the definition of investments is very broad. Some of the provisions of that chapter, including the concept of expropriation, have generated numerous proceedings. In addition, the current trend is toward extending that concept to encompass lost profits.
I can provide a number of examples of litigation related to NAFTA chapter 11. Pope and Talbot, Inc. v. Government of Canada involved softwood lumber quotas.
The government expropriated the company.
The company claimed that its rights had been violated on five NAFTA provisions: national treatment, most favoured nations treatment, minimum standard of treatment, performance requirements and expropriation.
According to the suit, the government expropriated the company because the allocation of the quotas caused the company to lose profits. The government did not meet performance requirements because the quota system favours the provinces not affected by the system. The government did not meet the minimum standard of treatment because the allocation of quotas was unfair and inequitable, and had been done secretively.
It is clear that in Quebec, for instance, there are lumber quotas for forestry companies. Since a large part of the forest belongs to the state, the Quebec government, the quotas are allocated to the company. Once again, in this case, in an interim award in June, the tribunal determined that Canada was consistent with its obligations respecting performance requirements and expropriation, and the tribunal did not rule on the other issues.
Madam Speaker, I hear the fire alarm.