ENVI Committee Meeting

37th PARLIAMENT, 1st SESSION

Standing Committee on Environment and Sustainable Development

EVIDENCE

CONTENTS

Thursday, March 14, 2002

¿

0905

The Chair (Mr. Charles Caccia (Davenport, Lib.))

À

1000

The Chair

Mr. Alan Tonks (York South--Weston, Lib.)

Mr. Roy Bailey (Souris--Moose Mountain, Canadian Alliance)

Mr. Alan Tonks

À

1005

The Chair

Mr. Tonks

The Chair

Mr. Roy Bailey

Mr. Alan Tonks

À

1010

The Chair

Mr. Alan Tonks

The Chair

Mrs. Karen Redman (Kitchener Centre, Lib.)

Mr. Roy Bailey

The Chair

Mr. Alan Tonks

À

1015

The Chair

Ms. Scherrer

The Chair

Ms. Hélène Scherrer

Mr. Tonks

Mrs. Karen Redman

The Chair

Mrs. Karen Redman

The Chair

Mr. Roy Bailey

The Chair

The Clerk of the Committee

The Chair

The Clerk

The Chair

---

CANADA

Standing Committee on Environment and Sustainable Development

---

NUMBER 063

l

1st SESSION

l

37th PARLIAMENT

---

EVIDENCE

Thursday, March 14, 2002

[Recorded by Electronic Apparatus]

¿  (0905)  

[English]

    The Chair (Mr. Charles Caccia (Davenport, Lib.)): We are here to view Trading Democracy, Bill Moyer's report on chapter 11 of NAFTA. Mr. Moyer's film focuses on a side of NAFTA that is little known, and if it is known, it is usually because of the impact it had, namely, the chapter 11 provision, on Canada at the time of the MMT affairs. You're familiar with the MMT case, so we won't go into that. Last week in Montreal, at the Commission for Environmental Co-operation, which has been set up as a result of NAFTA to look at environmental policies, as the labour commission has been set up in Washington to look after labour matters, someone showed it to me, and I thought, as a committee, we should be aware of the content of this movie.

    If you like, we can proceed without delay, and then we can have a short discussion. Is that agreeable? Then let's go.

    [Video Presentation]

À  (1000)  

    The Chair: Well, what do you think?

    Mr. Alan Tonks (York South--Weston, Lib.): I saw an article just last week, and I'm trying to remember it, because it was sort of a subliminal intake. The Federation of Canadian Municipalities is concerned with the indirect implications on local bylaws as they regulate. I think the NAFTA agreement was called in as part of that. But I can't remember the details. It was on the business page, and Jack Layton was making some comments on behalf of the Federation of Canadian Municipalities. I'm going to have to go back and find out just what that was all about.

    Mr. Roy Bailey (Souris--Moose Mountain, Canadian Alliance): One of the incidents related here comes very close to me. A friend of mine bought a low-cost funeral home in competition against the well-established ones. As he dropped in to visit periodically, he told me the background to these things. It's almost like a mafia operation. That film depicted a great deal of what he was trying to tell me, which I actually had trouble believing. Now I see it in reality, now I understand why, even within the province, the funeral director associations were so powerful that he couldn't get a licence for embalming. Eventually, he did. The materials he needed would be two and three times the price of what they were paying. So it troubles me when you hear it, and then you see that in actuality, this is what goes on.

    The whole concept of democracy comes into question. You really have to question democracy with these massive undertakings that are there not to protect what we generally consider in democracy, but rather to protect the God Almighty dollar. It was an awakening all right.

    Mr. Alan Tonks: Yes. But surely what legislatures can do at the stroke of a pen they can undo with a stroke of the pen. The negotiator at the end indicated that “tantamount to expropriation” had a different connotation in law in his mind, it was a quantitative concept, as opposed to qualitative one. One could argue that one's rights were being impinged upon with respect to an investment and issue a claim. You could counter-sue on the basis of the principle of expropriation and receive full restitution of whatever it is that you're claiming. And the first one was a matter of hundreds of millions of dollars. Even the United States can't sustain those kinds of costs.

    In relation to the Mexican issue, I'm not sure, if that lawyer at the end was arguing the case, it wouldn't have been expropriation, but it would have been the cost of doing business that could be attributed by a jury. In other words, the case that Mexico was making in the local municipalities was, we don't want to expropriate, we want you to clean up the site. And that's the cost of doing business. So I think, just as a lay person, that's something legislators need to reopen, now the courts are adjudicating in the manner that they are. It appears, Mr. Chairman, that there should be a review, because the implications are huge.

À  (1005)  

    The Chair: A review of what? Chapter 11?

    Mr. Alan Tonks: A review of chapter 11 with respect to how the courts are interpreting that.

    The Chair: You may recall that on Monday Pettigrew, in the House of Commons, gave a fairly exhaustive reply about the types of negotiations that are going on right now. So definitely, the Government of Canada is concerned about this issue, but the Americans eventually will be too, particularly when their jury system begins to be hurt or offended so deeply that there will be a groundswell reaction to all of this, as is shown by the judge towards the end. They are really angry at the fact that the system in which they had believed, namely the jury system, is being overturned.

    It could be a great help if that happens. I don't know how much help we can expect from Mexico, but certainly, there is here a big issue, because the question that emerges in all this is whether the expropriation will also apply to profits, not just to property. There are also profits now that are being claimed.

    Mr. Roy Bailey: I'm not being critical so much of the formation of NAFTA, but the haste of NAFTA left out our parliamentary and our democratic institutions, it left out provincial governments, it left out local governments, which are closest to the people. I think that somehow in chapter 11 we have to revisit that. Otherwise, you're way above the ordinary citizen, like myself, ever being in the position to challenge something in the courts, like the people with the drinking water and so on. The only thing you could hope for so an individual like myself can challenge something in the courts today, as it refers to NAFTA, is a groundswell of emotion, and that shouldn't have be. It should have to be factual, and one individual, albeit a peon, should be worth as much to society as the CEO of a crown corporation or a big corporation. That is lacking in NAFTA.

    Mr. Alan Tonks: There are two side issues, Mr. Chairman, that jump out at me. One is what you might refer to as a little bit of BAS in this thing--the best available science. We have been given to believe that the State of California operates on the basis of best available science. It was the State of California that used MTBE in the first place. So one can ask whether that best available science is enough to sustain the counterclaim. That's one issue. I cite that because we're caught up in the question of the role of best available science at the moment with respect to a whole variety of things, not the least of which is endangered species.

    The second matter is compensation. We see how compensation, in a quantitative way, hinges on three words: “tantamount to expropriation”. Is it a leap in logic that we must be very careful how we word anything in respect of compensation? It's a huge anvil over any kind of regimen dealing with environmental protection. And that anvil, as you have pointed out on occasion, Mr. Chairman, is more in the hands of the corporate side with respect to challenges on environmental legislation.

À  (1010)  

    The Chair: They called it in the movie a huge Trojan Horse.

    Mr. Alan Tonks: Yes, a huge Trojan Horse. But again, it can go both ways. Karen has just pointed out, and it's the first time I have seen it, that we have American capital going after our interpretation of “tantamount to expropriation”, and we have it going the other way.

    The Chair: Thank God it's beginning to be heard.

    In the case of Methanex, you should know that some of us, before the last election, got involved with Pettigrew. He was very responsive, and the result was that IISD in Winnipeg, to which Howard Mann belongs--Howard Mann is a lawyer here in Ottawa who works for the International Institute for Sustainable Development in Winnipeg--in the year 2000 asked for support to become amicus curiae, an officially recognized spokesperson in court. Pettigrew went along and it was established. That case is still on. So we have a Canadian NGO now in court in the U.S. fighting Methanex through IISD. If you want technical advice on this issue, if you want to raise it in the House, which would be very helpful to Pettigrew and the government, talk to Howard Mann. He is very approachable. He is very technical, of course. Then you will have to translate what he says into political language, but you will get all the background you need. Or you can go straight though IISD in Winnipeg.

    Mrs. Karen Redman (Kitchener Centre, Lib.): I think the real challenge is creating the political will to stop the bleeding against the international financial interests. Roy talks about a groundswell, but the sad reality we've seen is, you still pay. It doesn't matter if you win, you still pay.

    For the United States, their democracy and their legal system are absolute motherhood. I'm really pleased to see that, because now we will get their attention, and maybe there will be a trilateral appetite to look at this. But you also have to balance that with the precedent-setting cases. When more of these cases are dealt with, you will have a body of experience against which to hold all new cases. So I think the sooner we get that political appetite to take on the multinationals, the better off we'll be.

    Mr. Roy Bailey: Most people, the average person out there, if you ever mentioned that, would say, well, what's currently going on in the softwood lumber dispute or the challenge to the Canadian Wheat Board? From what we saw today--and this was an excellent video--they're not involved with the serious elements of the ability to sue one company or the other to protect themselves. They don't see that in NAFTA.

    Who produced this video?

    A voice: PBS.

    Mr. Roy Bailey: PBS. I thought I saw the logo in the corner, yes.

    I'm glad I came, because it gave a lot of meaning to some of the things in the paper. Now I understand. I read it and I thought I understood it, now I really understand it. So whoever brought the video in, I thank you for that.

    The Chair: When he said “this is a ticking time bomb in the process of liberalization”, it's a very telling observation. It is probably because the U.S. civil justice system is being challenged.

    Mr. Alan Tonks: But the powers of a person are entrenched in civil entities, such as municipalities in our justice system. I'm not sure that to the same extent Mexican.... In that it was challenged that the local authorities had no authority. That found its way right up to the federal government. The federal government was, because of the difference in legal system, found to be the entity responsible, and so they were charged. But in the second case, the United States case, similarly, the Supreme Courts now have no authority over the local court system. It now is a matter for some sort of tribunal. That's a really serious thing.

À  (1015)  

    The Chair: The question is, and it probably cannot be answered, why could a payment of $16 million by the Mexican government to the company not be made conditional on that company's cleaning up the site? Why wouldn't they even have that type of muscle, that type of bargaining?

    Ms. Hélène Scherrer (Louis-Hébert, Lib.): Is methanex being used anywhere in the world now?

    The Chair: I assume in the U.S.

    Ms. Hélène Scherrer: Aside from the U.S.?

    Mr. Alan Tonks: Maybe they're using another word.

    Mrs. Karen Redman: Charles, what's the availability of this for use? If it's PBS, could we, for instance--

    The Chair: Library of Parliament.

    Mrs. Karen Redman: We have our half-hour Rogers thing. I wonder if we could show it. I think it's outstanding. It brings a lot of clarity.

    The Chair: It's available, public property.

    Mr. Roy Bailey: Trying to mesh the two terms together I think is incorrect in some respects, that is , globalization and the spread of democracy. That's not necessarily a good union, a correct union. It should be the spread of democracy, but as you've witnessed today, one would have to question that. In North America, certainly the United States, that's a big thing, that's a big word, democracy. So are you trying to justify chapter 11, which is obviously written for the investor, outside government, which probably combined has more money than the government? It seems to me that's a bit tricky, and yet we can't do anything about it. It's somewhat misleading.

    The Chair: Thank you for your comments.

    We will meet on Tuesday, unless Bill C-5 is in the House.

    The Clerk of the Committee: Also, this video is available on demand. So if your colleagues want to see it in their offices, call the broadcasting branch.

    The Chair: Simple as that?

    The Clerk: Simple as that, yes.

    The Chair: The meeting is adjourned.