Mr. Speaker, I rise today, like my colleagues did earlier, to oppose Bill C-29, an act to regulate interprovincial trade in and the importation for commercial purposes of certain manganese-based substances.
This bill, as its title indicates, seeks to prohibit the importation of certain manganese-based substances, specifically MMT, in Canada, and their interprovincial trade.
The debate on this bill is very interesting, because this is a rather unusual piece of legislation.
It is unusual in that this government attempts to prohibit the use of MMT, not through the Canadian Environmental Protection Act, as one would expect, but through a roundabout means, at the commercial level, by using a false pretence, namely the harmful effects of this product on health and on the environment.
Instead of prohibiting the sale of MMT in Canada, or simply saying that this is a toxic or dangerous product, the government is trying to legislate to prohibit the importation of this product and its trade between the provinces. This is a blatant violation of NAFTA and interference in a field of provincial jurisdiction. It is strange however that a company could produce and sell MMT in a province without violating in any way the provisions of Bill C-29.
If the government is so afraid of the alleged toxic effects of MMT, why did it not completely prohibit its use, instead of restricting its importation and its interprovincial trade?
If the Minister of the Environment had any proof of MMT's harmful effects on health or on the environment, he would have drafted his bill differently but, unfortunately for him, the minister does not have any such proof. Incidentally, the U.S. Environmental Protection Agency, the EPA, also tried to prove that MMT is harmful to one's health, but it failed in its attempt to do so.
Until last year, the use of MMT in unleaded gasoline was prohibited in certain American states. However, in April 1995, Ethyl Corporation, won a legal battle against the EPA. The U.S. court of appeal for the district of Columbia ruled that the EPA had not proved its allegations to the effect that MMT is harmful to one's health.
As for the auto industry, it was not able to prove that MMT is harmful to cars' anti-pollution systems. The EPA did not appeal the decision. Therefore MMT is now allowed in some American states. In the circumstances, I wonder why the Minister of the Environment assumes he could prove this product is harmful.
Furthermore, on December 6, 1994, Health Canada published the results of an independent study on the so-called risks connected with the use of MMT. The study concluded that the use of MMT in gas did not constitute a health risk for any section of the Canadian public.
Finally, a number of international and Canadian scientific organizations have all concluded that low levels of manganese, as in the case of MMT in unleaded gas, do not represent a health risk.
Therefore, contrary to what the Minister of the Environment seems to think, for the time being there is no hard evidence for banning MMT. Consequently, Bill C-29 is redundant until such time as respected and serious studies provide evidence of a negative impact of MMT on health and the environment.
To prohibit MMT and replace it with another product such as ethanol, for instance, which does cause environmental problems, is merely deferring the problem. It would be better to do a number of serious studies before passing a bill than to do so after the fact.
The Bloc Quebecois is, of course, very concerned about the health of Quebecers and Canadians, as it is about environmental issues, and that is why we want these studies to be done before prohibiting MMT.
I might as well say right now that the bill in its present form will always be unacceptable, since the Minister of the Environment wants to regulate the market, not the environment.
And in that case we have some serious questions about the real motives of the Minister of the Environment for going ahead with Bill C-29, although he knows perfectly well that the bill will generate considerable costs for Quebec and Canadian taxpayers, including a likely increase in the price of gas, loss of jobs in the oil industry and the cost of a possible request for compensation under NAFTA.
It may be that privately, and I am sure unconsciously, the present Minister of the Environment, like his predecessor, has realized that the product that would replace MMT-by the way MMT is manufactured exclusively by Ethyl, an American company-is ethanol, which, coincidentally, is manufactured using corn, which is grown mainly in Ontario. We note that ethanol creates environmental problems.
However, there is one aspect the minister has not yet understood, although his colleague for international trade may have tried to explain it to him. Bill C-29 goes counter to a trade agreement we signed with the United States and Mexico: NAFTA. Under this agreement, the Canadian government does not have the right to restrict trade and allow goods to be produced only within its borders, as it intends to do with this bill.
By banning interprovincial trade in and the importation of MMT, the bill before us today requires that all MMT sold in Canada be produced in this country. Furthermore, the minister wants to stop
the importation of a product that is not necessarily harmful to the environment by hindering the free flow of goods. By violating NAFTA, the federal government lays itself open to a compensation claim as provided for in NAFTA.
In a letter dated February 23, the Minister for International Trade warned the Minister of the Environment that Bill C-29 violates some of NAFTA's basic principles and that, if this bill is adopted, Canada might receive a compensation claim under NAFTA. But the Minister of the Environment dug in his heels, preferring to expose the Canadian people to possible, even probable prosecution involving millions of dollars. I feel like quoting an excerpt from this very eloquent letter. The Minister for International Trade feels that, and I quote:
"An import prohibition on MMT would be inconsistent with Canada's obligations under the WTO and the NAFTA: (1) it would constitute an impermissible prohibition on imports, particularly if domestic production, sale or use is not similarly prohibited; and (2) it could not be justified on health or environmental grounds given current scientific evidence".
The Minister for International Trade concludes by asking his colleague to drop Bill C-29. The possibility of a lawsuit looms closer every day since a notice of intent to submit a claim was formally filed September 10 by Ethyl Corporation from the U.S. Ethyl is asking for US$201 million in compensation. A claim may be submitted within 90 days of the notice of intent.
This claim process under article 1116 of NAFTA has already been used in the past in two other areas. In fact, two other notices of intent to submit a claim under article 1116 of NAFTA have already been filed against Canada this year and are still pending. One is from a Mexican pharmaceutical company called Signa for $50 million, and the other is from Waste Management Inc. for a secret amount.
The U.S. company feels that its Canadian subsidiary will be hurt by Bill C-29 and that is why it is asking for compensation under article 1116 of NAFTA. This article provides that an investor of a party may submit to arbitration a claim that another party has breached an obligation under NAFTA and that the investor has incurred loss or damage by reason of, or arising out of, that breach.
Some say that NAFTA allows the Canadian government to pass legislation aimed at protecting human, animal or plant life and health. The exception procedure under NAFTA is complex and the Canadian government must at least be able to demonstrate that the substance in question has an adverse effect and that there is indeed a need to restrict this substance. The Canadian government could not do that in the case of MMT.
The tragedy is that, if Ethyl wins and the Canadian government has to pay the company several millions of dollars in compensation, this money will come out of the pockets of taxpayers in Quebec and Canada.
Ethyl Corporation, the sole manufacturer of MMT and sole exporter of this substance to Canada, claims that the Canadian government was in breach of its obligations under NAFTA on three counts: article 1110 on expropriation and compensation; article 1106 on performance requirements; and article 1102 on national treatment.
Under the expropriation provisions, Ethyl complained first about a loss of goodwill because Canada tarnished its reputation both nationally and internationally by saying without proving it that MMT is harmful. The American company also complained about the expropriation of its Canadian investments since Bill C-29 would preclude the commercial use of MMT by Ethyl Canada.
Moreover, Ethyl claims that the bill would create a preference for national content by authorizing the production of MMT in Canada, which violates article 1106 of NAFTA. International law requires governments to pay compensation each time they expropriate.
Finally, Ethyl claims that article 1102 dealing with national treatment was violated because it is discriminatory for the Canadian government to prohibit the import of MMT knowing full well that Ethyl is the sole manufacturer of this product.
In closing, how much is the government prepared to pay in compensation? As the Minister of the Environment so eloquently said, in response to a question I asked him on September 25, a U.S. multinational corporation should not dictate what the Government of Canada should do in the best interests of Canadians, both environmentally and healthwise. However, such a corporation has every right to remind the Government of Canada of the trade agreements it has signed.
Considering the enormous cost for Quebec and Canada taxpayers due to the absence of any advantage in prohibiting MMT in the bill proposed by the Minister of the Environment, I can only ask members to vote against Bill C-29, thus avoiding a financial disaster in Canada.
In closing, I would ask unanimous consent of the House to table a letter written by the Minister of International Trade to the Minister of the Environment.