Harper’s “free trade” legacy one of special privileges for foreign-owned companies

TORONTO, ON – OPINION – What do the European Parliament and the U.S. Congress have in common? They both have done more to protect Canada’s sovereignty than our House of Commons.

Since winning a majority in 2011, the Harper government has been giving away Canadian sovereignty as if it was candy on Halloween.

The first hand out was the Foreign Investment Promotion and Protection Agreement (FIPA) with China The FIPA was finalized in 2014 and is now locked in for decades. Because of the FIPA, a decision of Canada’s Parliament or Supreme Court that displeases a Chinese investor is no longer final until the investor runs out of time to bring a FIPA claim against Canada. Under the FIPA, that cut-off is three years.

If the FIPA claim is successful, Canadian taxpayers will typically have to compensate the Chinese investor for Canada’s law or court judgment – potentially for billions of dollars. Canada’s legislatures and courts are no longer supreme over the country’s public budgets, and the new supreme decision-makers are not courts.

The second concession – not finalized thanks to European opposition – is the Canada-Europe Comprehensive Economic and Trade Agreement (CETA). The CETA was hurriedly announced at a dummy ceremony in Ottawa last summer. Yet, it has not been signed, let alone ratified.

Many Europeans have objected to the CETA’s proposed shift of power from European institutions to foreign companies and private lawyers. Most of all, the CETA — in advance of another proposed deal between Europe and the U.S. – would expand a system of pseudo-courts for foreign companies that has raised widespread concerns in the European Parliament and Austria, France, and Germany, in particular. Euphemistically, the pseudo-courts are called “investor-state dispute settlement”.

The third give away of Canadian sovereignty would come in the Trans-Pacific Partnership (TPP). The TPP has been led by the U.S. government and followed by 11 relatively compliant Pacific Rim countries. Canada joined the march after Harper won his majority.

Like the FIPA and CETA, the TPP would shift power over public budgets from national institutions to the pseudo courts of private lawyers. Like the CETA, Canada’s sovereignty got more protection from elected officials in other parts of the world.

The high point of Canada’s sovereignty was from 1982 until 1994. In 1982, the Constitution was repatriated. For the first time, a decision of Canada’s Parliament was supreme, subject to Canada’s constitution as interpreted by our courts. Canada ticked the boxes of formal independence.

In 1994, NAFTA took effect. For U.S.-owned parts of our economy, Canada’s laws and courts became subject to another (extraordinarily powerful) level of international review in investor-state dispute settlement. Canada was, and has remained, the only Western developed country to have conceded its sovereignty to the U.S. in this way.

But NAFTA was limited to U.S. companies in Canada. In the FIPA, the pseudo-courts were extended to Chinese companies. In the CETA and TPP, they would be extended again, most notably to Western European and Japanese companies.

The attempts to expand the pseudo-courts for foreign companies – with scant evidence of any benefit to the public to match the obvious costs and risks – have caused a great deal of opposition and debate in Europe and the United States. Why not Canada?

And, why is Canada a world leader in conceding our sovereignty this way?

Gus Van Harten is a professor and investment law specialist at Osgoode Hall Law School. He is the author of Sold Down the Yangtze: Canada’s Lopsided Investment Deal With China.

By Gus Van Harten
Professor
Osgoode Hall Law School 

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