Trade ministers urged to deny corporations ability to sue provincial, territorial governments

Press Release: Council of Canadians, Ottawa

Trade Ministers Urged to Deny Corporations Ability to Sue Provincial, Territorial Governments

2 December 2010

OTTAWA, ONTARIO—(Marketwire - Dec. 2, 2010) - With the upcoming meeting of the Committee on Internal Trade (CIT) ministers in Saskatoon on December 3, a wide cross-section of Canadian civil society groups are 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 listed below are also calling on the federal government to remove this investor-state dispute process from NAFTA and other bilateral trade treaties Canada has signed, and to refrain from including it in the proposed Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

Investment treaties have been a disaster globally because of the way 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 U.S. investors, and the occasional Canadian firm registered in the U.S., to bypass Canadians 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 - AbitibiBowater - 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 investors abuse trade agreements to discourage public health or environmental policy at home. The CAFTA (Central American Free Trade Agreement) investment challenge from BC-based Pacific Rim 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, the Committee on Internal Trade agreed to include penalties of up to $5 million against provincial or territorial governments whose measures are found to interfere with inter-provincial 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. Private investors, on the other hand, have proven much less scrupulous around the world where investment rights have been enshrined in binding trade treaties. Including an investor-to-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 ask federal, provincial and territorial governments to reconsider their adherence to the new penalty system within the AIT’s province-to-province (territory) dispute system, and to soundly reject the inclusion of an investor-state dispute resolution process as proposed by Canadian business lobby groups this week.

Endorsers: Alberta Federation of Labour, ATTAC-Québec, Canadian Auto Workers’ union (CAW), Canadian Conference of the Arts, Canadian Federation of Students (CFS), Canadian Health Coalition, Canadian Labour Congress, Canadian Union of Postal Workers (CUPW), Canadian Union of Public Employees (CUPE), Canadian Union of Public Employees – 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, Newfoundland and Labrador Federation of Labour, Nova Scotia Federation of Labour, Ontario Council of Hospital Unions, Ontario Federation of Labour, Public Service Alliance of Canada, Registered Nurses’ Association of Ontario (RNAO), Saskatchewan Federation of Labour (SFL), Union paysanne of Québec, United Steelworkers (USW), Yukon Federation of Labour.