Public Values

End private trade lawsuits against governments – civil society groups

Corporate lawsuits costing taxpayers millions.

OTTAWA, December 3, 2010: With the meeting today in Saskatoon of ministers who make up the Committee on Internal Trade (CIT), a long list of Canadian civil society groups is urging governments to deny corporations the right to sue the provinces and territories under the Agreement on Internal Trade (AIT) as requested by a coalition of business groups this week.

The civil society groups are also calling on the Harper government to remove the investor-state dispute process from the North American Free Trade Agreement (NAFTA) and other bilateral trade treaties that Canada has signed.

The groups are also asking the CIT to refrain from including the controversial process in the proposed Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

Investment treaties have been a disaster globally because they prioritize the protection of property and narrow economic interests over the right to regulate in the public interest.

The investor-state dispute process in NAFTA has allowed US investors and the occasional Canadian firm registered in the US to bypass Canadian courts and directly challenge health, environmental and resource-related policies before private trade panels.

Canada has paid out over $150 million to private investors under this process – with $130 million going to just one company, Abitibi-Bowater, this year.

The NAFTA lawsuit by Dow AgroSciences against the Quebec government's ban on the cosmetic use of pesticides is an egregious example of how foreign investors abuse trade agreements to discourage public health or environmental policy in Canada.

The Central American Free Trade Agreement (CAFTA) investment challenge from BC-based Pacific Rim Mining Corp. against the sovereign right of the government of El Salvador to deny mining permits offers an equally sad example of how the process is used by Canadian firms to undermine human rights and environmental protections abroad.

The federal, provincial and territorial governments recently made controversial changes to the AIT province-to-province (or territory) dispute process without public consultation.

Two years ago CIT agreed to include penalties of up to $5 million against provincial or territorial governments whose measures are found to interfere with interprovincial trade or investment flows.

Ontario's restrictions on the sale of dairy blends (oil-based spreads and other products containing less than 50 per cent dairy) were struck down last month by an AIT panel. The province must now change its laws or face a fine. This is contrary to basic notions of democracy.

Despite high-profile cases such as the Alberta-Ontario challenge, there has been little use of this heavy-handed AIT dispute process by provinces and territories in Canada. However, private investors have proven much less scrupulous around the world where investment rights have been enshrined in binding trade treaties.

Including an investor-state dispute process in the AIT would multiply the number of challenges to provincial and territorial policies. The result would be a chill on government policy of all types for fear of sparking costly and time-consuming lawsuits.

The groups below are asking federal, provincial and territorial governments to reconsider their adherence to the new penalty system within the AIT's province-to-province (or territory) dispute resolution process, and to soundly reject the inclusion of an investor-state dispute process as proposed by Canadian business lobby groups this week:

  • Alberta Federation of Labour (AFL)
  • ATTAC-Québec
  • Canadian Auto Workers' Union (CAW)
  • Canadian Conference of the Arts (CCA)
  • Canadian Federation of Students (CFS)
  • Canadian Health Coalition (CHC)
  • Canadian Labour Congress (CLC)
  • Canadian Union of Postal Workers (CUPW)
  • Canadian Union of Public Employees (CUPE)
  • Canadian Union of Public Employees – Ontario (CUPE-Ontario)
  • Common Frontiers
  • Communications, Energy and Paperworkers Union of Canada (CEP)
  • Council of Canadians
  • National Farmers Union (NFU)
  • National Union of Public and General Employees (NUPGE)
  • New Brunswick Federation of Labour (NBFL)
  • Newfoundland and Labrador Federation of Labour (NLFL)
  • Nova Scotia Federation of Labour (NSFL)
  • Ontario Council of Hospital Unions (OCHU)
  • Ontario Federation of Labour (OFL)
  • Public Service Alliance of Canada (PSAC)
  • Registered Nurses' Association of Ontario (RNAO)
  • Saskatchewan Federation of Labour (SFL)
  • Union paysanne of Qébec
  • United Steelworkers (USW)
  • Yukon Federation of Labour (YFL)

Posted: December 07, 2010

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