Mr. Speaker, it is a pleasure to speak to chapter 11 and to NAFTA in a more generalized way.
It always amazes me how the proponents of free trade continually talk about its merits, how those who work in the economy and work across the country are the net beneficiaries of free trade and that their living conditions, their economic situation and their social well-being has been enhanced by free trade.
That mantra is bandied about from this side of the House. I heard the member for Kings—Hants say that this morning and I hear the government continually suggest that this is the case. However, no one ever suggests that they look at the statistics. Why on earth would we ever look at statistics to find out if it is true? It is much easier just to say it. It sounds good. It sounds marvellous. It makes people feel good. Then again, if we read the Statistics Canada reports for the most recent period from 1989 to 2005, we find that the opposite is true. Most Canadians did not prosper under free trade and NAFTA. They regressed economically.
Why would we tell Canadians that? Because that flies in the face of negotiating another free trade agreement. We have to tell folks the mythology that this is good for them. It is somewhat akin to telling a child, when his or her first tooth falls out, that the tooth fairy will come. Of course the tooth fairy does come, but usually in the form of a parent, in the night, because there is not a tooth fairy. In the free trade debate, the tooth fairy needs to be put to rest. Clearly what has happened is the average wealth of Canadians has declined and the average wealth of a very small percentage of Canadians has increased.
Let me read into the record the Statistics Canada reports on the four quintile of income levels across the country and what happened to them.
The percentage growth between 1989 and 2005 for those at the bottom of the income scale declined by 14%. This meant they were worse off in 2005 than they were in 1989. Yet we were told by the Liberal government, and now the Conservative government, that free trade would help folks. The numbers do not support it. I do not make up these numbers. I am not the tooth fairy. These are Statistics Canada reports, which are available to all members.
If we look at the second quintile, the second group of folks whose income is relatively low, how did they fare? They fared marginally better than the bottom quintile, but their incomes still declined by 12%. They were 12% worse off in 2005 than in 1989, yet we keep hearing the mantra from Liberals and Conservatives that free trade will be good for them, that they are better off, yet the numbers prove otherwise.
If we look to the third quintile, these folks are moving into the middle income bracket. How did they fare? They did somewhat better than the second quintile in that they only lost 6% of their earnings.
It would be pretty hard for me to convince some of my neighbours to sign on to an agreement where in 16 years they will have less than they have now. That is exactly what we have done to Canadians. Sixteen years after the fact, we have the bottom quintile at minus 14%, the second quintile at minus 12% and the third quintile at minus 6%.
Finally, when we move to the upper middle income bracket, toward the top end, their incomes grew by a paltry 2% in 16 years.
Therefore, who actually benefited from these free trade agreements, the net beneficiaries of them? Lo and behold, when we look at those at the very top of the income range, those who did not really need to improve their incomes all that much from 1989 to 2005 because they were already rich, their incomes went up plus 17%.
We can see what these free trade agreements are about. It is really about certain groups doing really well at the top and everyone else sinking to the bottom.
My colleagues across the way do not like the stats. Why on earth would we suggest to Canadians that they are better off when they are not? Why would we tell them the truth? How can we sell free trade to them if we tell them to sign up and they will be worse off, that we think it is good for the economy, but it will not be good for them personally as workers in this economy.
Is it because workers were not working? The report shows that, on average, Canadian workers whose income was sliding backwards were working more hours. While they were losing in the economy, they were working harder, working more hours and were separated from their families and sliding backwards. In an effort to try to compensate for the fact that they knew they were sliding backwards they wanted to work more and it did not help.
What do we see with their debt load? Unfortunately, as their incomes slid back, we would have expected to see their debt ratio to their household income increase, and that is exactly what happened. In preceding years of the 1980s until about 1986 the average debt load in the household declined. However, starting in 1988-89, we saw an absolute upward trend that has not stopped and continues to this day. The debt load is just shy of 130% of household income or their true assets.
When one looks at that, one has to ask were workers better off because of free trade? I would suggest that statistics are telling us that the tooth fairy really did not come to Canadian workers at all. In fact, the grim reaper came. What they have seen is a decline in their income year after year to the point where all they have done is driven themselves into debt. They have worked an excessive number of hours to try to help support their families, but have slipped behind.
We continue to hear that free trade is good for us and that chapter 11 is a necessary piece, the very piece that takes things away from workers, their rights and their abilities to do things. It allows it to be in the hands of investors at the expense of those folks, which continues to happen.
It befuddles me and really suggests to all of us, I think, that we are not speaking for the right folks. We are speaking on behalf of an investor group at the top end of the income scale that has not slipped behind. It has continually done well. We either have forgot or have never recognized that all of those whom we represent are not doing well at all. We ought to remember them when we develop free trade agreements.
When we look at chapter 11, what does it actually talk to? It talks to the sense of it is going to develop rules. Earlier hon. colleague talked about the dispute resolution. It said that it was going to establish rules for investment in North America. By having rules and discipline with countries that are predictable, there would be a rules-based investment climate. That way the investors would be protected. Note that the investor would be protected. It does not talk about labour. It does not talk about the environment. It does not talk about Canadian workers being protected.
It talks about foreign investors will be assured that they will be treated no differently from domestic investors. I think that was probably the case in the majority of investments made in our country prior to NAFTA.
I learned as a child in school that we needed to get away from the branch plant mentality in our country and build our own Canadian firms because of all the foreign investment here and because this was a good place to come. It probably still is based on the fact that we have an abundant wealth of natural resources and skills and an absolutely world-class workforce that is ready to do its work. However, we still have this leaning toward one class of individuals called the investors.
The other thing that stands out and absolutely amazes me is that if we do something in the House which investors say will hurt their profits, they can decide to take it to the tribunal. It is not just about their actual losses. It says “expected profits”. I always expected that maybe I could be six feet two inches but It did not work out. Who do I sue? Should I sue my parents because I did not grow to six feet two inches?
In NAFTA, we have a provision under chapter 11 where companies can stand and say that we have created a new rule, an environmental protection for the benefit of our country, which is all well and good for us, but that it has hurt them as far as what they expect to make three, four, five years down the road. How do we know those companies will even be in a business three, four, five years down the road, never mind how much money they will make? However, under this ridiculous article, they can actually sue the Canadian government because they lost what they thought they might make. This does not discount the fact that those who run the corporations may have made bad decisions in that intervening period. They just believe they should be able to sue because they might have made a lot of money.
How would one quantify that? How do we quantify what we think we might lose? No one ever wants to lose anything in life but no one can quantify next week, next year or the year after. None of us know what will happen in the next five minutes. That is part of what we call life. It is the great unexpected.
To suggest that somehow there is a rule that allows people to decide they should receive payment for expectations is like relying on the tooth fairy. It seems to me that chapter 11 has more sense about it. It is like a myth. It is like the Aesop's fables one tells to one's children than it does about rules-based adjudication, because that is what it said it was about. In its rules it says that people can go to the tribunal and get a decision but it they lose, too bad. What if the arbitration panel has made a fundamental mistake? Too bad. There is no opportunity to say that there has been an error, a misinterpretation or actually a misreading of what it was about. There is no sense of appeal. That is supposed to be rules based.
All of the rules-based procedures that I and my colleagues in the legal profession are very familiar with understand that a decision made at one level has an appeals process to it because mistakes get made. It gives the party, which the decision went against, the opportunity in a rules-based system to ask someone at a higher level to actually take it into consideration. This one does not. It does not actually penalize those who might bring frivolous claims against us, regardless of what we think is the sense of what we will do.
My friends in the Liberal Party talked earlier about this prosperity. I want to relate what happened to the workers at John Deere in Welland under NAFTA. The corporation got up and left. Now, did the workers get to sue the corporation for leaving? No. Did the corporation close? No. Did the work it was performing in Welland cease to exist? No. It simply went away because NAFTA let it go. There was no payment to the workers or to the community. It had no sense of being sorry and made no apology. It simply left, went to Mexico and some work went to the United States. The company left those workers because the rules said it could.
Why, in this Parliament, would we write rules that do not talk about workers, our citizens, the people who live here and the people we represent? I did not get elected by major multinational corporations because they do not vote. They simply are entities. It is real life people who send us here to work for them, not the other way around. However, when we come here we seem to be working on behalf, when it comes to these trade agreements, of something other than the people.
The statistics that I quoted earlier from Statistics Canada clearly show that we are in decline when it comes to the ability of ordinary, hard-working Canadians to make a living and keep up. They are slipping behind.
The big issue being raised now by both the government and the Liberals around the buy America act is the recent pronouncements made last week. The buy America act has been in force for the best part of 40-odd years, perhaps even longer. Those of us who live close to the border knew what was transpiring because the Americans were not covered under chapter 11 and they used it exclusively to ensure they were the net beneficiaries. They continue to do it to this day.
Over the years, I have spoken with some local politicians who are friends of mine. I would defy any member in the House to ask their constituents this question: “When I collect your tax dollars, would you like me to spend it on, (a) you and your neighbours; (b) on those who live in Florida,; (c) on those who live in Germany; or (d) on those who live in Colombia?” I am absolutely certain that 99.9% of those constituents will choose (a) because it is their money.
We have collected their money and I am sure they would tell us that when all things are equal, we should spend it on them because that is really why we collected it in the first place. It was collected for the net benefit of all who live in this land and to make this country a better place.
All we have heard with NAFTA is a big sucking sound of the wealth of the majority of Canadians being drained out of the country. Some of it has gone to the upper end but a lot of it has simply left. One need not look any further than Ontario to see the de-industrialization of southwestern Ontario under NAFTA in the last 18 years as it has slowly evaporated. The rush lately has been even larger.
I appreciate that my friends talked about rules and the hon. member talked about the precautionary principle, which in science is actually a rule. We like rules and a science-based approach to things. The precautionary principle is actually used by scientists to suggest that what we ought not to do is wait until folks become ill and perhaps die. If we have a sense that something is wrong, we should take action, and that is what the precautionary principle is about.
In the case of Quebec and 2,4-D, the precautionary principle was exercised at the provincial level. We see what happened on the American side with the buy America act and sub-national governments. State and local government have clearly said that NAFTA does not apply to them and here we have a company telling Quebec that it applies to Quebec.
We can see there is a bit of a shift in dynamics where one country that is a signatory to NAFTA has said that sub-national governments are not included and yet the Canadian government has not banned it yet. The Canadian government is working on it through Health Canada and the pesticide management groups, but it is cities like Toronto and others across this country and the province of Quebec that are really sub-national governments. I find it odd that multinationals think it is okay to sue Canada when it comes to sub-national governments but not necessarily sue sub-national governments when it comes to the Americans.
It is peculiar that happens but we can look at lots of other instances. I know the members from British Columbia are much more in tune with the softwood sellout than I am and I will leave that for them to discuss because it really pertains to them.
I find it disheartening when we see the claims against Canada by outside multinationals pertaining to substances that we consider dangerous. One of them was the exportation of PCBs. When I look at the total number of claims, six were environmental protection challenges, five about our natural resources and one about our cultural industry out of eighteen challenges. Clearly, 14 of the challenges are about things that really belong to us, not someone else and yet the challenges are about those. We need to change chapter 11 to ensure we have fair trade, not free trade.