October 22
To: Premier Christy Clark, BC Envirnoment Minister Terry Lake
From: Gus Van Harten

Dear Premier Clark and Minister Lake,

I wrote to Premier Clark by email on October 10, 2012 urging her to take action to stop the federal government from ratifying the Canada-China investment treaty (aka FIPA) on or about October 31, as planned, until the treaty's constitutional and other implications could be assessed properly and resolved.

I have not as yet received a reply and would like to follow up, on an urgent basis, after uncovering this weekend a BC legislative committee report that made essentially the same recommendation in 1998 in relation to future investment treaties.

In particular, I recalled yesterday that there was a BC legislative study of the OECD's proposed Multilateral Agreement on Investment (MAI) in 1998. As proposed, the MAI contained an investor-state mechanism essentially the same as that in the Canada-China treaty. It would also have empowered arbitrators outside of Canadian law and Canadian courts to review legislative, executive, and judicial decisions in Canada. Ultimately the MAI was not concluded due to concerns by some OECD governments about, among other things, the implications of investor lawsuits for their ability to govern effectively. Since this time, developed Western European and North American countries have signed few if any bilateral investment treaties amongst themselves.

I found in my basement this evening a copy of the report by this commitee, the "Special Committee on the Multilateral Agreement on Investment" (3rd Sess, 26th Parliament; Ms. Joan Smallwood, MLA, Chair), dated 29 Dec 1998. It states among other things and directly on point to the Canada-China treaty (I regret any typos as I have entered this by hand):

Recommendation no. 22 of the Special Committee

"Your committee recommends that when negotiating the MAI or any future investment treaty, the federal government must ensure that the agreement does not apply to matters within provincial jurisdiction, including local government measures, without the express consent of the Legislative Assembly of British Columbia. Such consent must be obtained before the federal government makes international commitments that apply to provincial or local government measures. If the federal government fails to provide for such consent, then the provincial government should explore all means, including legal action, to defend vigorously its own jurisdictional rights and those of local governments to represent the interest of British Columbians."

 Relevant discussion by the committee (last pages of the report)


"Respecting Provincial Government Jurisdiction

It must be emphasized that provincial governments are not simply another set of "stakeholders" to be consulted by the federal government en route to treaty signature and implementation. Under the Canadian constitution, the federal government is incapable of unilaterally implementing international treaty obligations in areas that fall within provincial jurisdiction. Nor is it acceptable for the federal government to use its treaty-making powers to do an end run around the federal-provincial division of powers or in a way that diminishes Canadian federalism and democracy.

Investor rights of the scale and breadth contemplated in the MAI would affect many matters that fall partly or exclusively within provincial legislative jurisdiction. Some of the more important to British Columbians include: the management and conservation of natural resources; health care, education, and other social services; the regulation of property and civil rights in the province; and municipal institutions and governments.

How is it that the federal government can expose provincial measures to binding international arbitration without the province's consent? ... Who will pay if a provincial measure is found to violate the federal government's treaty obligations? If the provincial government maintains an inconsistent measure, might the federal government be required to pay ongoing damages? Setting aside the jurisdictional issues, is it fiscally responsible for the federal government to negotiate an agreement that exposes it to open-ended liability for provincial government measures? And, faced with an adverse ruling, what steps might the federal government take to try to force provinces or municipalities to remove offending measures? 


The cost to Canadian taxpayers to defend provincial and local government measures against challenge and to vet future measures for potential inconsistency also cannot be ignored. Nor, just as importantly, can Canadian ignore the cost to democracy of the chilling effect such potential threats exert on provincial and local governments' ability to govern.

... the committee's view is that if British Columbia's support is not explicitly given, then the federal government should negotiate only with respect to federal measures. In the committee's view, if the federal government fails to gain the express consent of the Legislative Assembly, then the Province must vigorously defend its authority on behalf of all British Columbians."