CIIT Committee Report

Dissenting opinion of the Conservative Party of Canada

The Conservative Party of Canada would like to thank the analysts, clerk, and staff of the Standing Committee on International Trade for their work in preparing this committee report on selected impacts of the investor–state dispute settlement mechanisms. We are also appreciative of the witnesses who appeared to share their testimony and views during the meetings on this topic.

Conservatives recognize the important role investor–state dispute settlement (ISDS) mechanisms can have in the de-politicization of investment disputes not just in Canada but across the globe. We also recognize the need for ISDS mechanisms to provide more certainty for Canadian businesses seeking to invest abroad in states who may not have a fully developed and independent court system.

As we heard from Professor Barry Appleton, ISDS:

“provides a depoliticized and independent mechanism that allows for the application of the rule of law to disputes between states and investors.”^[1]

Professor Charles-Emmanuel Cote also re-iterated this point, stating that:

“ISDS primarily provides a political advantage by helping to depoliticize the settlement of investment disputes. It means that a state is not required to get involved in problems being experienced by its investors abroad. It prevents the souring of relations between investors' state of residence and the foreign states in which they invest.”^[2]

ISDS mechanisms continue to remain s relevant and critical part of trade agreements. The benefits of de-politicization can not be neglected as the Government of Canada seeks to negotiate new trade agreements, and looks to expand in new markets such as ASEAN and MERCOSUR.

We also express reservations regarding Recommendation #4 of the committee report, which asks that “the Government of Canada produce a report on all past and present litigation against the Government of Canada and against the government of a foreign state brought by Canadian businesses under investor–state dispute settlement mechanisms, including the total amount of damages paid to foreign investors and any other costs to Canada.” Conservatives feel that this recommendation seeks to identify narrow and select information in an effort to portray ISDS mechanisms as only have negative consequences. It is important that such a report would produce a comprehensive and well-rounded picture on ISDS.

Conservatives also ask that the government seek to include a form of ISDS in any potential future trade agreement with Indonesia, which the Government of Canada has begun consultations on. We heard clearly during committee testimony from several witnesses on the importance of including ISDS in this potential agreement, and to provide clarity for Canadian businesses who would look to invest in Indonesia if said agreement is negotiated and signed.

In conclusion, the Conservative Party of Canada would again stress the importance of ISDS mechanisms in our trade agreements to protect Canadian investments abroad as well as ensure a process which is de-politicized and separate from the influence of governments. We list the below recommendations for the consideration of the Government of Canada:

Recommendations

1. That the Government of Canada negotiate the inclusion of an investor–state dispute-settlement mechanism in any potential Canada—Indonesia trade agreement.
2. That, alongside Recommendation #4 in the committee report, that the Government of Canada also include in the produced report the cases won by the Government through all past and present litigation via investor—state dispute-settlement mechanisms, and the total monetary value which was therefore not paid to those claiming damages.
3. That the Government of Canada work with the European Union to expeditiously establish and enact the investor—state dispute-settlement mechanism, via an investment tribunal, which was negotiated in the Comprehensive Economic and Trade Agreement (CETA).