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The Trans-Pacific Partnership Is A Hidden Tax On Canadians By Multinationals

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The most pressing environmental policy problem facing Canada is the possible ratification of the "trade deal" known as the Trans-Pacific Partnership (TPP). The investor protection provisions (called the Investor State Dispute Settlement mechanism, or ISDS) in that agreement presents a major threat to environmental protection in Canada. Let me tell you why.

The ISDS in the TPP is the latest version of investor protection originally embedded in NAFTA. Canada has already been sued multiple times under NAFTA and found liable to fines of hundreds of millions of dollars simply for trying to administer its environmental rules. These ISDS suits are heard by arbitration panels of trade lawyers to which there is no appeal.

Simply put: the TPP should not be ratified.

National courts are excluded. This circumvents Canada's sovereignty and allows foreign corporations to be compensated for loss of investor's "expectations" (i.e. future profits) just because we applied our environmental laws.The even more powerful provisions under the TPP will result in many more lawsuits against Canada. University of Ottawa Law Prof. Michael Geist has provided detailed analysis on his blog covering these points.

Paying these fines amounts to a form of taxation of the Canadian public by multinational corporations. The Green Party of Canada opposes the idea that we should be taxed by corporations simply for passing laws that protect Canadians and Canada's environment.

Simply put: the TPP should not be ratified.

Turning make-believe profits into a tax on Canadians

Under the Investor State Dispute Settlement mechanism in NAFTA, and now more powerfully in the proposed TPP, foreign corporations can sue Canada if we apply environmental rules or change our environmental law in such a way that there is a loss of expected future profits. If the arbitration panel of trade lawyers rules in their favour (which they frequently have), Canada is forced to pay these companies compensation in the millions of dollars from public coffers.

How can these corporations claim the loss of future profits is real money? Future profits have to be earned in the marketplace. There are no certainties in markets, only risks that must be addressed. Companies must convince customers to make a purchase presumably in a marketplace fraught with uncertainties and active competitors.

If a corporation can prove that they have lost future profits with certainty, it can only mean that they are operating in a monopolistic environment. That's the only way they could be assured of profits. If that is the case, they are not operating in a free market. It's not the responsibility of government to support such a broken system. It's the job of the government to break up those those monopolies, restore the free market, and in doing so, remove the guarantee of future profits that they claim to have lost.

I encourage everyone to write their local Member of Parliament and tell them the TPP is stacked with benefits for foreign corporations. Tell them you don't want your tax dollars used to pay those foreign corporations when the government acts to protect our environment. Tell them you're sick of backroom trade deals that sell Canada's sovereignty down the Yangtze River.

Gord Miller is the former Environmental Commissioner of Ontario and a Infrastructure and Community Development Critic for the Green Party of Canada.

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