Mr. Speaker, an American company, Dow AgroSciences, sued under chapter 11 of NAFTA for $2 million in compensation, claiming that Quebec's pesticide management code violated its right to sell 2,4-D in Quebec.
Quebec's pesticide management code, which was adopted in 2003, is the only one of its kind in Canada. It sets standards governing the use and sale of pesticides in Quebec. The code prohibits the sale of the herbicide 2,4-D for public health reasons. Quebec chose to ban this product because it considers 2,4-D harmful to human health and the environment. In case of doubt, the precautionary principle must apply.
Members will also recall that the Bloc Québécois member for Rosemont—La Petite-Patrie questioned the Minister of the Environment to make sure the government was committed to defending Quebec's pesticide management code. The government is talking out of both sides of its mouth, however. While the Minister of International Trade is saying he wants to defend Quebec's position on this issue, the Minister of the Environment is telling the United States that Canada must harmonize its policies with the American government's. According to my Bloc colleague, the member for Rosemont—La Petite-Patrie, the actions by the Minister of the Environment, in addition to undermining my efforts as the Bloc's international trade critic in this House at the time, were watering down environmental requirements and favouring the Dow Chemical Company at Quebec's expense.
We know that Équiterre, Ecojustice and the David Suzuki Foundation, along with other environmental groups, prepared an online petition that concerned citizens could sign to express their support for the code. Clearly, the response was in favour of protecting the code.
Moreover, this was the purpose of the motion the Standing Committee on International Trade adopted on March 31, 2009, a motion I had put forward. This motion said that the committee:
...recommends: that the Government vigorously defend Quebec’s Pesticides Management Code in the case opposing Dow Agroscience and the Government of Canada in order to safeguard Quebec’s right to enact legislation and make regulations in the public interest.
Two key elements stand out in all of this. First, there is chapter 11 of NAFTA and second, there is the right to protect public health and the environment. These two elements are obviously at loggerheads. This brings to mind the many, often heated discussions held on what was known as the SPP, the security and prosperity partnership of North America. The purpose of all these discussions was essentially to lower the bar for regulations in just about every governmental sphere of activity so that they would be comparable to those of the United States. There have been a number of examples or attempts in that sense.
As for chapter 11 of NAFTA, it was drafted and agreed to by Canada's negotiators. It is well known that Canada's negotiators have a very good reputation. I am not blaming them for all this. However, it is the government that tells them what it wants and thus they give direction to the negotiations.
We will always wonder why chapter 11 was included in NAFTA at the time if not primarily to protect corporate investments.
In the case of the United States, it was to protect the investments of their companies in Canada. In the case of Canada, it was to protect its investments in the United States. And look what happened. We began to see an increase in challenges, based essentially on the definition or interpretation of expropriation. We know it is not necessarily easy to draw a clear line in every case.
In Quebec and in Canada, in the wake of regulatory changes, a Canadian company does not have the same power to sue that a foreign company operating in Canada does. It is quite something to give foreign companies additional rights or the freedom to impose their views and to interfere in how Quebec or Canada operates. We know that the Government of Quebec has banned the use of this pesticide because it was being used in more domestic settings and was more likely to pose a threat to the public. When such a pesticide is used on big fields with close to zero population density, it is not the same. However, when the Government of Quebec legislated on this, it was to protect the environment and public health.
We can talk at length about chapter 11 on investments. I will come back to that. The real goal of the United States is to lower standards that restrict their trade. They are then free to sue Canada and in this instance Quebec.
We know this. It is all fine and well to talk about free trade, but the freedom to trade, as the lawyers say, goes something like this: when laws are passed, the freedom of some ends where the freedom of others begins. The freedom to trade, therefore, should also end where the freedom to health and a safe environment begin. Where is the balance? There are people who want to make money, who are prepared to sell all sorts of things. By all accounts, they do not think that way.
In this case, I believe, I am convinced, that the Government of Quebec is correct, and has the right to legislate and impose higher standards. I think that people in general feel that standards must be respected from one country to the next. For example, we heard from representatives of the European Union at the Committee on International Trade. They told us that the European Union had banned certain laundry detergent products. Naturally, the other countries made threats and even wanted to take legal action. The European Union stood its ground. When a sovereign country decides to establish quality standards based on its values and interests—I am talking about the health of its people and its environment—nothing should interfere with that decision. I said sovereign, and that makes me think that if Quebec were a sovereign country, it would likely establish standards and would demand that they be respected in its free trade agreements. That is one of the items discussed while the countries are negotiating.
The negotiating style of many countries makes it clear from the very beginning that some issues are non-negotiable. When a population respects its own priorities—which Quebec would do if it were sovereign—some issues are simply non-negotiable. Of course I support free trade, but not at just any price. We need limits and standards.
With respect to chapter 11, we know that Canada often signs bad agreements. Such agreements are part of a negative trend.They enable multinationals to sue governments directly over the policies they adopt. These companies believe that any measure—social, environmental or whatever—that cuts into their profits constitutes expropriation and requires compensation. These agreements also enable companies to sue for such astronomical amounts that they can prevent the government from working for the common good.
The Conservative government, which wants to give foreign investors complete freedom and does not want to regulate them, is involved in all kinds of bilateral negotiations to sign bad agreements modelled on chapter 11 of NAFTA and the Multilateral Agreement on Investment, the MAI, which everyone deplores.
Investment protection agreements do not have to be that bad. Of all the countries in the world, only Canada and the United States sign these kinds of agreements. The Bloc Québécois believes that Quebec would not copy the Canada-U.S. model, so we are asking the government to change its policy. Multinational corporations, like any other citizen, must submit to the authority of the state.
There can be no doubt that we support investment protection. It makes sense. A company looking to do business in a foreign country must be assured of a minimum level of respect and protection before dedicating assets, money and often human resources to set up shop in that country. However, that must not be at the expense of the country itself, its people or its environment.
Of course, in some countries, laws and regulations are too weak to protect people and the environment. That often happens with Canadian mining companies that are actually foreign-owned. They set up shop in Canada because they can take advantage of the Canadian government's unlimited protection for what they plan to do in foreign countries. These companies take action against labour rights and even the environment, but they are not punished for actions that would be unacceptable in Canada and Quebec.
We are in favour of foreign investment protection. We are in favour of protecting our companies' investments, and by the same token, we are in favour of investment protection in general, because a company can be expropriated for any reason.
For me, the word expropriation has a much broader meaning than to simply say that the company can no longer hope to bring in the same amount of profit as it had hoped when it was first established. As we know, things change. The expropriation we often see in municipalities, both in terms of property as well as measures taken by a municipal government, involves telling someone that he or she must physically change locations for some reason. Of course compensation is given, but not the same level of compensation that foreign companies think they should get, companies that come and set up in a country and then claim they have been divested, not of the assets they actually have and can exploit, but rather of their future, probable and expected profits.
Even the companies in each country cannot do it this way. There are three things wrong with NAFTA's chapter 11.
First of all, the definition of expropriation is so vague that any government measure, except for a general tax measure, can be challenged by foreign investors if it diminishes the profits generated by their investments. Indeed, a Kyoto implementation plan, which would have large polluters such as oil companies pay dearly, could be challenged under chapter 11 and result in government compensation. American companies hold majority interests in Alberta oil companies. Chapter 11 opens the door to the most abusive challenges.
Second, the definition of investor is so broad that it includes any shareholder.
And third, we have the definition of investment, which I will not explain, since I was just told that I do not have much time left.
What is important to take away from this is that any self-respecting nation, like Quebec if it were sovereign, would have high standards to protect its population and its environment, and those standards would be non-negotiable in a free trade agreement that is intelligently prepared and concluded.
I am convinced that protecting public health must be at the top of our priorities because the health of individuals is at stake. Usage must be legislated by those governments closest to their citizens, the municipalities, among others, supported in this case by Quebec.
Investment protection should be adjusted to a greater extent in the agreements the government enters into in the future and in those currently being negotiated, because Canada's existing agreements are bad agreements. We believe that there should be some protection for investments but not to the detriment of public health and the environment.
To conclude, in this agreement, unfortunately, we see the influence of what was once highly touted by the principal negotiators for Canada and the United States, this partnership for security and prosperity. We had to lower our standards to adjust to those of the United States in order to achieve prosperity. But they have been hard hit and that is not what we want in Quebec. We want to protect the health of the public and of the environment. When there is doubt, the precautionary principle must apply. That is what all environmental groups are saying. It is up to us to decide what is good for us and what we should defend in spite of chapter 11, which allows for bad agreements.
