Wayne Easter

[Business of Supply, April 18th, 2013]

Mr. Speaker, I listened to the remarks of the member for Willowdale.

I know he has done a fair bit of business at a personal level in China, so he certainly has firsthand experience. I think he would realize that there is an imbalance under the FIPA in terms of Canadian investors in China versus Chinese investors in Canada, and the fact that there are a lot of state-owned enterprises in China.

I just cannot understand for the life of me how the member could support the government position that we not hold adequate hearings to find the trouble spots and to hear from businesses like his. Without those adequate hearings, we have one of two choices: to go forward with what is clearly a flawed agreement and has a lot of opposition across Canada, or to go with the NDP motion which would basically turf that agreement out and then we would have nothing. That is really no choice at all.

I would ask the member, on the one hand, why he would not support holding hearings and encourage his own government to do that, and on the other hand, specifically what the implications would be if we went ahead and just tossed the agreement out.

[Business of Supply, April 18th, 2013]

Mr. Speaker, my colleague is absolutely right. Countries initially negotiate with Canada rather than with the United States. If they get an agreement with Canada, they then move on to the U.S., which has an economy 10 times bigger than ours.

At one point in time we heard that the Canada-Europe trade agreement was on the Prime Minister's desk for signature. We know that there are three problem areas, such as the procurement of pharmaceutical drug costs and issues related to supply management. However, the European Commissioner has basically now told Canada that unless it settles for less than what it wants, Europe will move on to the United States. In fact, the U.S. agreement is proceeding. That is why we are now playing second fiddle to the United States. The Europeans are now emphasizing that particular negotiation. I would suggest that all we will end up with in Canada right now is a bad agreement. That is the result of the government not doing its job aggressively enough when it had the opportunity.

I might point out, as well, as I did not have enough time in my remarks, that the United States is very concerned about the Chinese agreement and how the Chinese government guides foreign direct investments to those sectors it sees as strategic. Canada has to recognize that concern and ensure that we protect those industries in Canada and ensure that they benefit Canadians rather than become subservient to Chinese needs.

[Business of Supply, April 18th, 2013]

Mr. Speaker, I think the questioner started off talking about the CBC, saying that the poor government was solely focused on the economy. My only hope would be that it does not focus on much else, because when it is has focused on the economy, it has become a disaster.

The Minister of Finance has not hit a target yet. The government started off with a surplus, and it now has a deficit. We are finding out more and more about the budget. As our leader said the other day on the budget, the increasing of tariffs on something like 1300 items is going to cost middle-class Canadians more.

Maybe the member who raised the question is not concerned about the families that buy those little red wagons for their children, but it is going to cost them more. Maybe the member is not concerned about the people who go out and buy bicycles that are going to cost them more.

If the member would just admit it, she would stand up here and say that yes, the government has been misinforming Canadians all along. It is, in fact, raising taxes in a number of areas, and its policies are damaging the ability of middle-class people to make a decent living in this country.

[Business of Supply, April 18th, 2013]

Mr. Speaker, I will comment on those numbers, but I am disappointed that the NDP would not support the amendment to basically send this to the trade committee and do hearings across the country. Yes, it was rejected at the trade committee, clearly on direction from the government, but I thought that maybe in this place, where there are a number of backbenchers now starting to speak out and rally against the tight control by the Prime Minister's Office, that they might have the backbone to stand and say that we should do our jobs as parliamentarians and hold the proper hearings on issues such as this.

Be it as it may, that is the decision taken by the NDP members, and I do not understand where they are coming from.

On the numbers that the trade critic for the NDP talked about, he is absolutely right. We are in 18th position among those countries. For the first time in 30 years, we have an annual trade deficit. Merchandise trade is showing problems all the time. the Canadian government has failed to implement an FTA with South Korea. As a result, in that market now, we are losing a billion dollar market for beef and hogs. The United States is displacing us in that particular market. The CETA has been now moved back to summer. We are playing second fiddle to the United States there.

Conservatives may talk numbers in terms of trade agreements, but the results of the government in terms of trade is 18th worst, and it seems to be getting worse all the time.

[Business of Supply, April 18th, 2013]

—seventeen, but the government has a responsibility. All parliamentarians have a responsibility to come up with the best agreement for Canada that we can come up with.

The problem with the government is that it either denies debate or limits debate, so that the proper hearings cannot be held across the country, and in this case globally, I would submit, to find the best solution for Canadians on an investment treaty with China, to fix those flaws.

That is where we want to be. We want to ensure the facts are laid out, both the good points and the bad points, so that we can fix the flaws in this particular agreement to ensure that it is best for Canada.

The facts are these: Foreign investment protection agreements are important for Canadians investing abroad, as well as businesses here at home. While the Canada-China FIPA contains several flaws that raise serious concerns, completely abandoning the treaty is not the answer to assist Canadians and Canadian businesses in dealing with investments and trade issues with China, which is a major player in the world.

Second, a better opposition day motion would have toned down the anti-foreign investment and trade rhetoric by highlighting the areas that require improvement, and I hope I can do that through the course of my remarks.

There is no question that the Canada-China foreign investment protection agreement needs to be improved, but not completely discarded.

The Liberal Party has raised concerns about provisions in the Canada-China investment agreement, particularly on issues of transparency during arbitration, termination of the agreement and the length of time the agreement is in force. Liberals have consistently called for a public debate on the issue, not on a motion such as this but a real debate where the treaty is actually laid out. I would submit that beyond that, we need to be bringing in witnesses, going to see businesses, some in favour and some opposed, to see the implications from their perspectives.

Unfortunately, the government has failed to take responsibility for this treaty and has blocked discussion on it, creating a vacuum that has been filled with misinformation and fearmongering. That really concerns me because there are two major extremes, and that is causing a lot of dissension toward the agreement. Indeed, if the government had the will, the FIPA could be fixed.

It is important to keep in mind that the only briefing ever provided to the Canadian public and Parliament came about as a result of a motion presented to the international trade committee, at which government officials were permitted to speak for a single hour. The minister never went before committee on this issue. By way of a motion that the government members were too embarrassed to defeat, officials were before the committee for one single hour. Does anyone think that on an investment treaty this broad that is enough time to debate the issues and get some answers? I certainly think not.

From what we know, the key issues surrounding the Canada-China FIPA are these: one, transparency in terms of public awareness of disputes; two, federal liabilities for provincial decisions based on the Constitution; three, restrictions on investment and joint ventures in China, restrictions on what industries Canadians can invest in in China vis-à-vis what China investment companies and state-owned enterprises are allowed to invest in in this country; four, security concerns raised by both CSIS and United States security agencies; five, energy investments such as CNOOC and national treatment on further investments. Those are the five key areas about which there are concerns. To a great extent, if the government had the will to allow itself to debate the issue, many of those key issues could be solved and we could have an investment treaty that in fact works. Let us not just throw it out, but let us also not just do as the government does and sign it because it is under a bit of pressure.

Let me come back to each of the issues. On the transparency issue, in terms of disputes to be resolved through arbitration, officials told the committee the following:

...it is Canada's long-standing policy to permit public access to such proceedings. Canada's FIPA with China...will allow Canada to make all documents submitted to an arbitral tribunal available...subject to the protection of confidential business information.

Later in the same testimony, we found out Canada has little to do with it. In response to the question that stated that FIPA means that “China...does not have to have public hearings and does not have to disclose documents if they don't want to”, the response from officials was, yes, that was correct.

On the transparency issue, I am saying that officials, in that single hour of testimony we had from them in questions, admitted that there is an entirely different situation related to transparency on disputes that has to occur in this country versus the transparency that has to occur for Canadian investors having a dispute on the China side of the equation.

When asked if the government has done an economic impact assessment of the agreement, something that has been done for all the FTAs, which has been used as the basis of defending them, officials confirmed that no such analysis was undertaken or apparently attempted. That is a serious issue, when we have the Government of Canada undertaking a major international agreement, which any of us who have read the document and the timeframes know is basically locked in for 31 years, and the government has not done a cost-benefit analysis. That is just about unbelievable, but in fact it is true.

The second major concern that I raise was a termination clause. In other FIPAs, there is usually an easy mechanism to end the agreement early if the agreement does not end up providing Canadians the protection it is supposed to. This agreement remains in force indefinitely, and the exit mechanisms generally consist of a six-month or one-year notice and then the exiting investments remain in force for a period of a certain number of years that would be spelled out.

For example, under NAFTA, which is a major agreement, a party may withdraw six months after it provides written notice of withdrawal to the other parties. If a party withdraws, the agreement shall remain in force for the remaining parties. In our agreement with Lebanon, there is a one-year notice for termination, and then existing investments remain in force for some 20 years. In Jordan, it is the same thing; there is a one-year notice of termination, but the existing investments would remain in force for 15 years. In Argentina, it is much the same.

However, and this is the point I raised earlier, the parliamentary secretary said that this FIPA with China is the same, but it is not the same in many respects. It is similar, but with many different qualifiers around it. With China, this agreement is not indefinite until termination notice. In other words, we are locked in for an initial period of 15 years, which is unprecedented in terms of these agreements. Then it can be terminated on one year's notice and existing investments remain in force for another period of 15 years. Hence, that is where we get the 31-year agreement point that many people keep citing. This is a departure and locks us into the agreement, regardless of whether it ends up providing Canadians the protection it is supposed to.

The third point of concern is federal liability for provincial decisions and the constitutional impact. At the international trade committee on October 18, 2012, in response to the direct question, “Would this FIPA subject provinces to claims for damages as a result of this legislation if a Chinese investor believed that provincial actions had violated this deal?” officials responded, “No, it doesn't subject provinces to any claims. The federal government is responsible. The federal government would be accepting all obligations”.

That is something we seriously have to consider. If a province makes a decision, and a Chinese business is upset because it believes that it has future lost profits as a result, and it wins the case, the federal government is responsible for all those obligations. The federal taxpayer could end up having to pay for those obligations.

That is key. That is not different from some of the other trade agreements. I recognize that. However, we should go in with eyes wide open and look at whether there is any way of limiting that liability to the federal taxpayer as a result of provincial decisions, for whatever reason they are made.

The fourth area is restrictions on investment in China and on joint ventures.

During the briefing by officials at the international trade committee, the following was stated:

Some sectors are completely off limits to foreign investment, such as mining of certain minerals. In other sectors, foreign investments are restricted or “encouraged”, meaning that they are subject to foreign equity caps or requirements for Chinese control or joint venture arrangements.

The official went on to state that this agreement:

will support Canadian businesses' efforts to explore the growing investment opportunities in the world's second-largest economy across a range of key sectors, including financial services, natural resources, transportation, biotech, education, information technology, and manufacturing.

Further to this point concerning restrictions with China, and to the point the Prime Minister raised in the House on October 23, 2012, regarding reciprocity, the following should be noted from the U.S.-China Economic and Security Review Commission report of 2012, which states:

The Chinese government identifies “oil and petrochemicals” as one of seven strategic industries for which the state must maintain “absolute control through dominant state-owned enterprises.”

As such, foreign companies are not permitted to participate in China's domestic strategic industries, except through joint ventures.

There we have it. There are different rules for our investments in China versus its investments here. We need to be looking out for those pitfalls in terms of this particular agreement.

The point is that state-owned enterprises in China are designed in such a way as to enhance total economic endeavours and the foreign, political and trade policies of China. We need to recognize that up front. That is not necessarily a bad thing, but we need to go in with eyes wide open and ensure that we protect ourselves from any problems that may occur as a result of that strategy.

I would like to move that the motion be amended by replacing all the words after the words “China that” with the following: prior to any decision and the ratification of the Canada-China Foreign Investment Promotion and Protection Agreement, the said agreement should be referred to the Standing Committee on International Trade to conduct hearings across Canada and report back its findings and any recommendations to amend the agreement to the House.

[Business of Supply, April 18th, 2013]

Mr. Speaker, I will start off by stating what the parliamentary secretary did not say in response to that question. Yes, the FIPA with China and Canada is similar, but it is certainly not the same.

We are dealing with what is now or will be the biggest economy in the world, and we are also dealing with state-owned enterprises. There is a lot of difference in terms of the China agreement, and some other countries have recognized that and have put in specific safeguards in their own country's interests on SOEs. They have done it in a way to protect their own interests and still have a foreign investment protection agreement. That should be added to the parliamentary secretary's answer.

I am pleased to speak to the motion, but I want to point out a few facts as I begin. What the motion really shows in this place is the extreme position of both the Conservative government and the NDP opposition on major issues that affect Canadians.

On the one hand we have the Conservative government that will sign any deal just to get a deal, just to get the number. It will sign basically anything, regardless of the long-term consequences on Canadians.

On the other hand, we have the NDP, which seems to oppose any trade or investment treaty, and leaves us with the impression that the NDP position is anti-trade in its approach to the economy. That kind of thinking belongs in the early 20th century, not today.

We have the two extremes. What the Liberal Party wants to do is find the balance. That is why, as I said earlier in a question, we will not be voting for the NDP motion because we really think what we should be doing is holding the proper hearings. We cannot just throw out an investment treaty that has some flaws in it. We need to fix the flaws. That is really what we need to be doing.

In order to do that, and the parliamentary secretary can say all he likes about the fact that there were seven opposition days and more—

[Business of Supply, April 18th, 2013]

Mr. Speaker, I have to laugh at some of the responses from the parliamentary secretary. He did say that these were difficult times. What he failed to add was that these times were all the more difficult as a result of the government's actions.

The international trade critic for the NDP mentioned some trade facts and I would like to add to them. There was a surplus when the Conservatives came to power and now there is a serious trade deficit, the first trade deficit in 30 years. Canada has been in a trade deficit 10 months out of the last 12 months. The Conservatives like to talk about the number of agreements they have signed, but they never want to talk about results. Why? Because the results are absolutely terrible.

The CETA agreement was supposed to be agreed upon and signed over a year ago. It has now been moved to the summer. We are playing second fiddle to the United States negotiations and that puts us in a lose-lose position. We are losing a billion dollar market on pork and hogs as a result of the government's FTA with South Korea. The U.S. secretary of agriculture is bragging to the U.S. beef industry about stealing the beef market from Canadians in South Korea. Those are the results we are seeing.

Will the parliamentary secretary answer my question directly? Who is responsible for liabilities as a result of a provincial government decision under the FIPA that may affect a Chinese company investing in this country that feels it has been wronged and sues in court? Who accepts liability for that? I believe if the member answers honestly, he will say that federal taxpayers do.

[Business of Supply, April 18th, 2013]

Mr. Speaker, I enjoy working with the trade critic for the NDP and expect my office received many of the same emails that he mentioned receiving overnight on this particular issue.

I disagree with the NDP motion, by the way, to just throw this out. We need rules around investment, serious rules, but I understand why the motion was put. As the member said, there was a request for an emergency debate, which was denied by the Speaker as it was not seen as an emergency, and there were several attempts by myself and the NDP to have the committee look at this issue, but, of course, the Conservative members on the committee would not even allow that debate to happen in public and the motions were lost.

My question to the member relates to the box that I think all parliamentarians are in. This motion is to reject the agreement. I believe the member would probably agree that if we had transparency around the discussion and hearings across the country and maybe other countries around the world to put in place the safeguards to make this investment treaty work for Canadians, then maybe we could come up with a better treaty. My question to the member is along those lines. Why can we not get that kind of transparent and open debate and would that not be a better procedure, so that there is investment protection for Canadian investors and we can improve our economic relationship?

[Questions Passed as Orders for Returns, April 18th, 2013]

Mr. Speaker, I gave the Clerk a letter saying I would hold it for another day, that I would not point that question of privilege today.

[Family Homes on Reserves and Matrimonial Interests or Rights Act, April 17th, 2013]

Mr. Speaker, this is the 31st time allocation motion. The motion we are debating is not about the merit or the lack of merit of the bill; it is about limiting debate. It is an affront to democracy. If there is anything the government is becoming infamous for, it is its undermining of democracy, everything from the omnibus bills to 31 time allocation motions.

We have seen some legislation go through this place that did not have proper review and has now been turned back by the courts. We will likely see more because this place is not allowed to function properly under the Conservative government. The backbenchers over there are not allowed to speak most of the time. We are seeing some of that these days. They jump up and down like they are trained to do, which is a sad affront to democracy as well.

What does the minister have to fear about allowing proper debate and proper hearings, so the good and the bad points of legislation can come out, so this place can pass legislation that will stand the test of time? What does the minister have to fear?