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Canada quietly ratifies controversial international investment convention

In August 2012, the Financial Post reported that Canada was close to ratifying the ICSID Convention, a binding set of rules for how investor-to-state disputes (like the Lone Pine case against Quebec’s fracking moratorium) are handled that some countries (e.g. Bolivia, Venezuela, Ecuador) are pulling out of because of how these rules undermine state sovereignty. Canada had signed the Convention, and already agrees to 99 per cent of its arbitration rules, but could not be a full member until all of the provinces had passed ratifying legislation.

Apparently that has quietly happened, despite our request that the holdout provinces seek publc approval for ratification, since the Harper government announced November 1 that it had was now a full member of ICSID. Trade Minister Ed Fast declared, “Ratifying this investment treaty is an important step toward further ensuring predictability and stability for Canadian investors operating abroad. This is the latest example of how our pro-trade, pro-investment plan to help our businesses grow and succeed abroad continues to get results for our exporters, workers, investors and businesses.”

This is nonsense. As we’ve explained on this site before, the most important differences for ICSID Convention member countries (versus signers only) are all negative. Canada surely felt rushed to become a full ICSID member because of its CETA negotiations with the European Union, since the EU disapproved of the flexibility, as limited as it was, for Canada to review investment arbitration awards in Canadian courts.

The EU may sound like a lovely, socially progressive place with high standards and good cheese. But when it comes to corporate power, they are bullish in international trade and investment negotiations. The European Commission wants maximum protection for EU companies against environmental and even financial stability policies that indirectly affect corporate profits. They want, and Canada largely agreed, people to have to pay to regulate corporate activity.

The CETA investment chapter and investor-to-state dispute settlement process are guaranteed to attract many more lawsuits against legitimate Canadian policy like the fracking moratorium. If Canada is a full member of the ICSID Convention, it means we have no objective legal means to review the decisions of private arbitration panels in these lawsuits.

As Gus Van Harten of Osgoode Hall Law School explained to me last year, if Canada ratifies the ICSID Convention, arbitration awards against Canada would be subject to review only by other arbitrators and not by any national or international court. The arbitrators lack the hallmarks of judicial independence and may reasonably be perceived as beholden to appointing bodies that are dominated by the United States, major Western European states, or the international business community.

Ratification would be a further significant step in the concession of Canada’s judicial sovereignty to international arbitration processes that are not independent, public, and accountable in the manner of courts, suggested Van Harten, and thus a step back from Canada’s historical commitments to fair and independent processes of international dispute resolution.

We are used to the Harper government trampling on democracy in this country. It’s disappointing to see the provinces (Alberta, Manitoba, Prince Edward Island, Quebec and New Brunswick and Nova Scotia were the holdouts on ICSID) following suit.

First our provincial governments negotiated the CETA agreement with the federal government in near secrecy, hiding behind a confidentiality agreement that made public consultation meaningless. Then, at the end of October, they gave Harper their near unconditional support for the Canada-EU deal (CETA) without publicly explaining what’s in it or giving the electorate a chance to review or revise the deal.

Now, with ICSID ratification, they have helped the Harper government dilute their own constitutional rights to govern in areas as important as resources, public services and environmental protection — at a time when many countries, including Australia and South Africa, are second-guessing corporate rights treaties like CETA and Canada’s FIPAs. We need to put our foot down.

To write to your provincial government demanding a democratic say in the Canada-EU deal — a chance to review and even to reject CETA if it’s not in the public interest — use our action alert here. The action focuses on the enormous impacts that CETA will have on public health care and prescription drug costs. But it ends with an appeal to fix the democratic deficit in Harper’s corporate trade and investment agenda.

Canada’s ICSID Convention ratification continues the Harper government’s watering down of Canadian democracy and sellout to multinational corporate power. The Canada-EU deal will take that agenda a step further. We can’t let Harper get away with it without a fight.