The right of corporations to sue governments is not unprecedented. Under Canadian law, both domestic and foreign owned companies have the right to file claims in Canadian courts if they believe that they have been treated unfairly by the government. Investor-state arbitration ensures that Canadian investors abroad have recourse to fair and transparent dispute settlement, especially in countries which may not provide the same legal and judicial protection that is guaranteed in Canada. Recourse to investor-state arbitration is an important feature of the North American Free Trade Agreement, NAFTA, and of bilateral investment treaties that Canada and many other countries have concluded.
The government works continually to ensure that its measures conform to its international legal obligations. Indeed, the government consults broadly and assesses a variety of implications in the development of policies and initiatives. The government's potential financial liability pursuant to challenges by foreign investors against allegedly non-conforming measures under the investor-state dispute settlement procedures of the NAFTA and a potential Multilateral Agreement on Investment, MAI, would depend upon the number and nature of the disputes in question.
Respecting subnational measures, Canada secured a grandfathering of all existing non-conforming subnational measures in the NAFTA. In the MAI negotiations, Canada has indicated clearly that the application of the MAI to measures under the jurisdiction of Canadian provinces cannot be assumed and would depend upon the content of any potential deal. Should the negotiations result in a satisfactory agreement for Canada, the coverage of provincial investment measures would not exceed the NAFTA. Canada would ensure that all existing non-conforming measures maintained by provincial and local governments would be excluded from the coverage of any agreement. As well, Canada would fully safeguard our freedom of action at both the federal and provincial levels in key areas, including health care, social programs, culture, education, programs for aboriginal peoples and programs for minorities.
Since the outset of the MAI negotiations in 1995, the government has consulted the provinces on a frequent and consistent basis. The provinces are debriefed after every negotiating session, copied on all reports and have access to all negotiating document. Numerous meetings between federal and provincial trade officials have taken place over the past three years to address issues related to the negotiations. The federal-provincial trade ministerial meeting of February 19, 1998 allowed for a thorough discussion of Canada's objectives and bottom lines.
The governement will continue to consult closely with Canadians respecting the MAI negotiations. Consultations with provincial and territorial governments, non-governmental organizations, business and individual Canadians are vital to ensuring that all our interests are properly reflected in Canada's negotiating position.
Question No. 96—