P Is Canada’s constitution and solvency less important than Europe’s? I’m asking that question because the pending Canada-Europe trade deal (or CETA) is leading to little-known discussions in Europe — but not in Canada — about the deal’s constitutional and fiscal implications. As planned, the deal will allow investor-state arbitrators, outside Canadian or European courts, to award vast sums of public money to a special class of private litigants: foreign owners of assets. In light of this, the federal government and the provinces need to clarify, as the Europeans are doing, how they plan to protect federalism and public budgets from the ravages such open-ended liability could have on our economy. While the role of investor-state arbitrators is opaque, it is more powerful and far riskier for voters and taxpayers than other international forums such as the World Trade Organization. For example, the arbitrators can award large amounts to foreign investors without giving a government the opportunity to avoid liability by altering the decision which it condemns. More worrying, the arbitrators are not judges, and even have an apparent interest to favour investors because, unlike in other forms of arbitration, only one side — the investors — can sue and, in turn, create future lucrative work for the arbitrators. Put simply, under CETA, foreign investors will enjoy powerful rights under a lopsided process, without assuming any responsibilities that are actionable by governments. Since the arbitrators began using their power over the public purse in the late 1990s, Canada has paid out about $160 million under NAFTA to U.S. companies. The U.S. has paid nothing to Canadian companies. Other countries under similar treaties have been ordered to pay billions and, although federal trade officials downplay the risk, the trade deal with Europe undeniably heightens the prospect of dubious yet costly awards against Canada.
Posted on: Fri, 27 Sep 2013 02:28:04 +0000
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