Madam Speaker, I would like to recognize we are on the traditional territory of the Algonquin people, and I thank my Liberal colleagues for sharing this speaking time with me.
The Green Party will support the new CUSMA. We believe in fair and equitable trade that improves health, safety, labour and environmental standards. I would like to congratulate the Canadian negotiating team for getting this deal done with the Trump administration in the White House. Things could have turned out much worse.
CUSMA is not a perfect agreement. It is still a corporate model of trade. There are deficiencies. Climate change is not mentioned. The softwood lumber agreement has not been fixed. The good regulatory practices chapter could be very problematic. The extension of copyrights was not necessary. Indigenous rights and title are a particular area of concern in both Canada and Mexico. Aluminum was not properly covered in the rules of origin. The dairy industry faces increased imports and constraints on its exports. The negotiating process could still be a lot more transparent and consultative.
However, there are significant wins. The proportionality clause for energy exports has been removed. Labour standards have been improved in Mexico. The rules of origin have been improved. Supply management has been protected. The environmental rules have been strengthened. The cultural industries remain protected.
In my view, removing investor-state dispute settlement provisions, or ISDS, is the biggest win. We need to remove ISDS from all our trade and investment agreements. ISDS gives foreign corporations extraordinary powers to bypass national court systems and challenge domestic laws in a private tribunal system. It gives foreign corporations rights that domestic corporations do not have. Foreign corporations can demand millions and even billions of dollars in compensation from governments for the loss of potential profit when domestic laws and regulations get in the way of their profits.
These secretive tribunals take place behind closed doors, with no public scrutiny or participation from some of the affected parties. Under some treaties, such as the Canada-China FIPA, the public may never know that a tribunal took place or that a Chinese state-owned corporation received financial compensation from Canadian taxpayers.
These are not real courts. Trade tribunals are made up of three corporate lawyers who work for major private law firms and earn $1,000 per hour or more. These lawyers switch roles in different arbitration cases. Sometimes they work for the corporation, sometimes they defend government and other times they act as the deciding judge.
I know the Conservatives are big supporters of investor-state dispute settlements, so I would like to correct some of what I have heard from them on this subject.
No Canadian corporation has ever been successful in bringing an arbitration case against the United States. ISDS has not been a helpful tool for Canadian corporations under NAFTA. Canada's laws and policies have been challenged by NAFTA investor-state rules 48 times, and we have lost eight of the 17 cases that were completed. Canadian taxpayers have paid out hundreds of millions of dollars to foreign companies for the loss of potential profits, not for real expropriation.
For example, Canada banned imports of gasoline carrying MMT, a known neurotoxin, to protect the health of Canadians. The U.S. company that makes MMT, Ethyl Corporation, went to a NAFTA tribunal and received $13 million in compensation from Canadian taxpayers.
Bilcon v. Canada is another egregious case. The Nova Scotia government told Bilcon it was open for business. Bilcon wanted to build a quarry and a shipping terminal and blast rock for 50 years in the vicinity of the calving grounds of the North Atlantic right whale. Bilcon failed the environmental assessment. It then bypassed Canadian courts and received $7 million in compensation from a NAFTA tribunal. It should have received nothing.
The U.S. government has not paid a penny for an arbitration case because it has not lost a single case under NAFTA. It won all of the 21 claims against it. We need to remove investor-state dispute settlements from all trade and investment agreements.
One of the most problematic of those agreements is the Canada-China Foreign Investment Promotion and Protection Agreement, or FIPA. This is an ISDS agreement that will be impossible to change.
NAFTA had a six-month notice clause for abrogation or renegotiation. The Canada-China FIPA is locked in for 15 years, and then there is a one-year notice period, after which corporations that invested get a further 15 years of investor-state. It is 31 years in total. The Canada-China FIPA locks in the discriminatory practices that China had in place at the time of signing. The Canada-China FIPA was negotiated in secret, and signed and ratified without a vote in the House. It was ratified by an order in council by the Harper Conservative government while there was an ongoing court challenge by the Hupacasath First Nation. Let us imagine that. It is complete disrespect of our judicial system and of first nations.
The Canada-China FIPA does not have a national security carve-out or exemption, so if Canada blocks Huawei based on national security grounds, then Canadian taxpayers could be on the hook for billions of dollars for the loss of potential profits that Huawei claims, and we may never know that there was an arbitration case or payout, because both parties would have to agree to make that information public. That is another egregious part of the Canada-China FIPA: secrecy.
Canada has FIPA agreements with the A to Z of small-market and developing countries, from Armenia to Zambia. This is where Canadian companies are using ISDS successfully. Canadian companies have won $2 billion in compensation from developing countries, and there is another $10 billion being sought through ISDS, predominantly from extractive companies. For example, the Canadian mining company Gabriel Resources is seeking $4 billion after the Romanian government, under massive public pressure, blocked a project that would have levelled four mountains, destroyed three villages and turned a valley into a toxic, cyanide-laced tailings pond. This is under the Canada-Romania FIPA.
Imagine if that happened in Banff. Imagine a state-owned mining company taking up Alberta on its open-for-business approach and putting in a proposal to level four mountains, relocate Banff and turn Lake Louise into a toxic tailings pond. Then imagine paying that corporation billions of dollars in taxpayer-funded compensation for the loss of potential profit when Albertans reject the project. Imagine that arbitration case and payout being kept secret.
The legal firms that specialize in ISDS shop these arbitration suits around to hedge funds and finance companies that also reap massive profits from these cases. The Wall Street hedge fund Tenor Capital invested $35 million in the Crystallex v. Venezuela case and got a whopping 1,000% return on its investment when the Canadian mining company was awarded $1.2 billion in compensation. The Crystallex case also came under a FIPA agreement. Indigenous people in Venezuela objected to the mine because it was destroying their community and territory. In this era of the UN Declaration on the Rights of Indigenous Peoples, we are going to see more challenges to destructive extractive projects not just here in Canada but around the world.
Canada has signed trade and investment agreements with some countries that have terrible human rights records. The Harper government negotiated and signed the Canada-Honduras Free Trade Agreement after a coup toppled the democratically elected government.
Is that how we reward anti-democratic behaviour? Should trade not lift all boats? Should the improvement of judicial systems, the rule of law and democratization not be part of these agreements? Should trade agreements not improve the health, safety, consumer, labour and environmental standards of all concerned? The Green Party believes so.
Investor-state dispute settlement, by its very nature, is anti-democratic and should be removed from all of our trade and investment agreements. I would like to applaud the Canadian negotiating team for getting rid of ISDS in CUSMA. Our work is cut out for us: one down, many more to go.
