SPECIAL COMMITTEE ON THE
MULTILATERAL AGREEMENT ON INVESTMENT
FRIDAY, OCTOBER 2, 1998
Issue No. 7
|Chair:||* Joan Smallwood (Surrey-Whalley NDP)|
|Deputy Chair:||* Colin Hansen (Vancouver-Quilchena L)|
|Members:||* Pietro Calendino (Burnaby North NDP)
* Evelyn Gillespie (Comox Valley NDP)
Erda Walsh (Kootenay NDP)
* Helmut Giesbrecht (Skeena NDP)
* John Cashore (Coquitlam-Maillardville NDP)
* Steve Orcherton (Victoria-Hillside NDP)
* Ted Nebbeling (West Vancouver-Garibaldi L)
Barry Penner (Chilliwack L)
* Lynn Stephens (Langley L)
* Kevin Krueger (Kamloops-North Thompson L)
|Clerk of Committees:||Craig James|
|Also Present:||Rob Clift (Confederation of University Faculty Associations of British Columbia)|
Ed Lavalle (College-Institute Educators Association)
Michael McBane (Canadian Health Coalition)
Maura Parte (Canadian Federation of Students, B.C.)
[ Page 211 ]
The committee met at 9:08 a.m.
[J. Smallwood in the chair.]
The Chair: I call the Special Committee on the Multilateral Agreement on Investment to order. The first order of business today is the potential impact of the MAI on health care and education.
I might, in beginning the panel for our new presenters that are here, just give them a sketch of how the hearings have been working and what our objectives of this particular stage are. The special committee is a committee of the Legislature. It is an all-party committee, and it was struck back in April of last year. The committee's strategy basically is to develop two different components. The first part of our process for fulfilling our mandate or beginning our mandate is an educational component. The expert witness portion of our inquiry is, hopefully, to lay a foundation, to make information available to the public generally and to culminate in an interim report. The interim report will be available in approximately November of this year. It is our hope that along with the interim report we'll have a video summary of the hearings and that those two documents combined will support a broader dialogue in this province and elsewhere on the issue of the MAI.
The committee is then, after Christmas, prepared to tour this province to talk to British Columbians about how this information relates to their lives, how the MAI will affect them in their neighbourhoods and their workplaces, and affect the issues they're most concerned about. The committee will report to the Legislature. Both the interim and the final report will be tabled in the Legislature in the spring of the year.
The format that we've been using is that we've asked presenters to introduce themselves, to speak briefly about their credentials and their involvement in this issue and then give their presentation. We have then gone on to other presenters if there were other presenters available at the time, to conclude with a round table and questions from committee members. Our next panel is the potential impact of the MAI on health care and education. Our first presenter is Michael McBane.
Thank you for being with us, Mr. McBane. If you'd be good enough to introduce yourself.
M. McBane: Thank you, Madam Chair. I'd like to thank the committee members for providing this very important opportunity not only for British Columbians but, I think, for Canadians across the country to have a democratic discussion, an open examination of the implications of a very comprehensive, far-reaching treaty. We would hope that this is the kind of leadership that could be emulated in other jurisdictions.
I'm the national coordinator of the Canadian Health Coalition, which is an umbrella group which was formed in 1979 to basically preserve and expand public health insurance. Our work led in 1984 to the adoption of the Canada Health Act; we've been working overtime ever since to preserve the principles of that act. We believe the MAI threatens those principles fundamentally. In a word, the MAI and the Canada Health Act are incompatible.
The coalition has a broad membership of seniors, students, health care providers, other trade unions and church groups -- basically, the groups in society that came together to push for medicare to begin with. So we are non-interested public advocates for health care.
In terms of our involvement in this specific issue, we intervened in late 1995 and 1996 during the NAFTA reservations process, which was a process designed to bring provincial jurisdiction under the scope of the NAFTA. At that time we argued that the federal government was incorrect in assuming that the reservations in the NAFTA were adequately protecting medicare. We worked very hard on that. We commissioned a legal opinion, and our views were shared by a number of jurisdictions, including the government of British Columbia and a large number of health advocates. At the end of the day, we did succeed in getting the federal government to reverse its policy and to take added protection in negotiating a general reservation in annex II with NAFTA.
[9:15]Our competence on that one is very relevant because the exact same reservation that was inadequate in NAFTA has now been dumped back on the table by the federal government in the MAI, word for word. That is really the summary of our concerns -- that the reservation for health and social services submitted by the Canadian negotiators in the current negotiations on the MAI is seriously flawed. The reservation is identical to the one in NAFTA II-C-9. It does not fully protect medicare, and this was recognized, as I just said, by the government of Canada when it negotiated a general reservation with its NAFTA partners, excluding all existing measures. The proposed reservation for health and social services in the MAI needs to be replaced by a complete carve-out for health and social services.
The federal government's trade negotiators have proposed a draft reservation on the MAI. Legally, this reservation is qualified and therefore inadequate to protect health care and social services from MAI rules. The shield in the MAI text that's supposed to protect medicare and that is said to be ironclad from the market is full of holes. The draft MAI reservation for health and social services is identical to the one contained in NAFTA. It reads:
"Canada reserves the right to adopt or maintain any measure with respect to the provision of public law enforcement and correctional services and the following services, to the extent that they are social services established or maintained for a public purpose: income security or insurance, social security or insurance, social welfare, public education, public training, health and child care."It's clear when you read it closely that this reservation shields public law enforcement and correctional services categorically from the full force of the MAI. All other areas covered by the reservation, including health, are qualified and are protected only to the extent that they are "social services" or maintained "for a public purpose." None of these key terms in this important agreement are defined -- social services, public purpose or even health. The scope of this reservation is therefore unclear and obviously open for interpretation.
While the Canadian trade negotiators interpret public purpose broadly, reservations to multilateral agreements are interpreted narrowly by international courts and tribunals. More importantly, the United States government has stated that this specific reservation, word for word, will be interpreted in a very narrow manner. The office of the United States trade representative issued detailed guidelines to state
[ Page 212 ]officials of the official U.S. government interpretation of the reservation for health and social services in NAFTA II-C-9 -- the identical text that is now submitted by Ottawa in the MAI negotiations.
One recalls the comment of Clayton Yeutter, the chief U.S. trade representative in '87: "The Canadians don't know what they've signed. In 20 years they'll be sucked into the U.S. economy." One wonders. Perhaps some government officials know what they're proposing, but do the Canadian people really know what it means to sign these conditional reservations? I've attached a series of documents, including the letter from the United States trade representative, outlining their interpretation of what's covered and what's not covered under this reservation -- appendix 1, which I've submitted to the Clerk.
In March 1996, the United States trade representative issued the following response to the questions raised by the Attorney General of Oregon. Oregon asked: "Describe and explain the scope [of the reservation], including the definition of 'public purpose.' " The United States trade representative responded: "The reservation
The ultimate decision on whether public purpose will be interpreted broadly, as the Canadian government wants, or narrowly, as the Americans want, will rest ultimately with a trade dispute panel. If an MAI panel were to uphold the American position, then obviously the Canada Health Act would be rendered meaningless, and we would be open to market medicine like we've never seen before.
I'll refer to a legal opinion that we commissioned in 1996 from Manitoba lawyer Bryan Schwartz, outlining our concerns and the flaws of the reservation on health care and social services. This legal opinion is also attached, as appendix 2. I'll read a brief section from this legal opinion:
"Obviously the grey areas in these terms -- what is a social service? what is a public purpose? -- are very disturbing. There are grey areas that exist in the health care sector. U.S. providers and their federal government can be expected to exert political and economic pressure on Canada and the provinces to open up markets. Canada and the United States might choose to refer some disagreements to dispute-settling panels, where each side may win some cases. Sometimes even a panel victory will not secure such relief for a part of the health sector that's under challenge from the United States. As you well know, in British Columbia with the experience of softwood lumber, pressure from the United States can be relentless. In some cases, it's almost independent of what you have in your agreements. I'd also refer to pressure in the United States against the Clinton health reform plan -- just to highlight the enormous weight and power of American health care industries.
. . .Canada or a province might oppose foreign entry and competition in some sensitive sectors such as health care for the following reasons:
"A government might want a single-tier publicly controlled system [because it would] be seen as more equitable
. . . .It can also be argued that if better-off citizens must use the same system as everyone else they [would then] be more willing to support government measures, including taxation, needed to ensure that the system is of high quality. Under a two-tier system, the wealthy might use the private tier and allow the public tier to deteriorate.
"A government might tolerate a few private operations on the fringe
. . . .However, opening up the market to U.S. entrants might expand the fringe into a massive part of the system.
"A government might believe that it can observe and police a sector better if all aspects of it, including management, are within the borders of the province or at least [the country.]
"A government might believe that if [its] service providers are all members of the [local community]" -- they will not be motivated solely by profit but by a concern for fellow members of the community. "Corporate management will arguably put more emphasis on consumer safety or environmental protection [in health standards] if the adverse consequences of corporate decisions are visited on management's own neighbours
. . . ."
So after we released the opinion, we did manage to get a meeting with the federal Minister of Health at the time, David Dingwall. Basically, in a nutshell, we said to him: "With these grey areas, do you want to be the Minister of Health that goes down in history as having gambled and lost down the road when it comes to a dispute and we lose? Why would you take the gamble for grey areas? If your policy objective is to be ironclad, then don't stick with grey areas and undefined terms and terms that are clearly under dispute between the principal parties." Shortly after our meeting, the federal cabinet committee instructed the International Trade minister to exchange letters with general exemptions for all existing measures, including health and social services. The exchange of letters is also attached, in appendix 3, and its implications in other documents, in appendix 4 -- particularly the document Inside NAFTA.
You can understand, then, given the experience of the Canadian Health Coalition, why we are disturbed to see the inadequate reservation used in NAFTA annex II-C-9 as the identical reservation now on the table in the MAI. The MAI draft reservation as submitted by Canada's trade negotiator is, at best, inconsistent and imprudent and, at worst, a deliberate attempt to expose health care to commercial forces. In discussions with the Canadian Health Coalition recently, senior officials at the International Trade Office in Ottawa acknowledged that the NAFTA reservation for health and social services which we now see in the MAI is a problem. We would argue that problems need to be fixed. Under no circumstances should problems like a flawed reservation for health be introduced like a virus into the MAI. Instead, Canadian governments need to learn from the NAFTA experience with flawed reservations for health and social services.
In light of the obvious weakness of this reservation now before us in the MAI, the Canadian Health Coalition recommends the following: that the Special Committee on the MAI strongly recommend to the federal Minister of International Trade and his MAI negotiators that Canada's current draft reservation for health and social services be replaced by a complete carve-out for health and social services. Canada should not enter any multilateral agreement on investment without such an ironclad exemption for health and social services.
A second point I would like to touch on briefly concerns the agreement on internal trade, which
[ Page 213 ]aware, the government of British Columbia and the other governments in Canada have just finished a series of negotiations around changes to the agreement on internal trade. We believe that just like the MAI and NAFTA, international as well as domestic trade agreements can threaten medicare. No sooner were the letters reserving all existing programs exchanged between the NAFTA partners, when Canada's federal and provincial ministers of industry began negotiations to eliminate the exclusion of health and social services from the rules of interprovincial trade. It seems that no defeat is final, no victory complete when it comes to protecting medicare from market rules.
In another legal opinion prepared for the Health Coalition by international trade expert Barry Appleton, it was argued that the elimination of protection for health care and social services from domestic trade agreements could have a profound weakening effect on reservations made under the NAFTA. U.S. negotiators and the powerful U.S. health care industry could argue that Canada's health care sector is being opened up domestically for competition and commercialization, and therefore it cannot be protected in international trade agreements, because of national treatment clauses.
The proposed changes to the internal trade agreement would shift the focus of service delivery and health and social services on local community-based organizations to continental multinational companies and global providers. The coalition believes that these changes in domestic and international agreements are at odds with the goals of community-based, not-for-profit health care. The coalition therefore supports British Columbia's position and the leadership provided by the government on excluding health and social services from all agreements -- the internal trade agreement, the NAFTA and a potential MAI.
[9:30]The third point I'd like to touch on is the whole issue of medicare and market principles, and the fact that medicare is incompatible with market principles. The Health Coalition views the current discussion over the MAI and its impact on medicare in a wider policy context. Medicare, and indeed the Canadian federation, was not built on market principles. If Canada is more than an economy, there must be more to federal government policy than opening up our communities and our society to corporate greed. For the general public, health care and social services are a symbol of the heart and soul of Canada. These programs defy the logic of the market, because the dignity of the human person has no price and can't be reduced to a cost-benefit analysis. This is an extremely important point to recall: when it comes to the health sector, market rules don't work. If you believe that people should have equal access to health care, then you don't think that financial barriers should be raised to block people from getting access because they can't afford the care. Obviously that is not a market principle. Obviously such a system would have to be protected from trade and investment agreements.
The federal government in Ottawa tends to adopt the agenda of the global marketplace as the whole and only public agenda. All you need to look at is these Team Canada junkets and look who's represented. Who does the Prime Minister bring with him when he represents not the nation of Canada but the economy of Canada? They recently brought people who are trying to sell for-profit hospitals to Mexicans. This is Jean Chrétien's trade team. So in some ways the threats to medicare are not all external. One wonders whether in fact there's a federal government policy to open up the door to the market.
Consequently, the Prime Minister and his Ministers of Finance, Industry, International Trade and the Treasury Board increasingly view health as an industry and health care as a commodity to be exploited for profits. The current federal policy direction gives trade, industry and investment objectives priority over health and social policy. This raises a number of concerns about the security of Canada's medicare system. Increasingly, the objectives of the federal government and the corporate sector are indistinguishable. These include the harmonization of health and social policy with international trade and investment obligations, reduction in size and scope of the public health sector, including the withdrawal of $36 billion in health care funding since 1986 -- $36 billion taken out by the federal government -- which created a health program on a 50-50 basis and now are providing 11 percent of the funding.
Those moves obviously create huge pressure for the expansion of the private health care market. Other federal policies include privatization, strategic partnerships, linking Canadian health companies to foreign multinationals, exports strategy for biotechnology and other health products including health information systems and, more recently, the weakening of safety regulations for food, drugs and medical devices -- a flattening of the regulations in order to attract foreign investment.
The weakening of Canada's health protection regulations in particular, coupled with the withdrawal of federal financing for health services in the transfer payments, should be of major concern to the government of British Columbia. International trade policy objectives are increasingly and obviously at odds with health policy objectives. We have seen that very recently with Bill C-91 and the pharmaceutical patent protection issue. Clearly industrial strategy overruled health policy objectives in protecting monopoly patents and driving costs up. Obviously an important piece of health care is treated as an industrial commodity.
An example of how health policy objectives are subservient to international trade and investment objectives is contained in a government of Canada document, "Science and Technology," which I quote: "Principle: Positioning Canada Competitively Within Emerging International Regulatory Standards and Intellectual Property Regimes." It goes on to describe this principle: "Innovation thrives in a climate in which policies and regulations
This principle of competitive regulatory standards to go hand in hand with new international trade obligations may sound reasonable. But if you look at a real-life application of such a principle, you soon see that it becomes a horrendous implication. And what it really means, when you're talking about harmonizing safety standards, is that Canada is becoming a dumping ground for hazardous products. In the early 1980s an American company called Health Management Associates collected blood plasma from Arkansas prisoners. The company was not allowed to sell dirty blood in the United
[ Page 214 ]States of America, because they had strong health protection laws. Europe would not take this contaminated blood from prisons. But guess who has competitive blood regulations "sensitive to rapidly changing market needs": Canada. Canada imported the tainted blood from Arkansas prisons. A Montreal blood broker, Continental Pharma, imported the blood collected from the prisons and sold it to Connaught Laboratories in Toronto, where it was distributed and contaminated the entire Canadian blood system. Appendix 5 contains recently released documents in the Ottawa Citizen, documenting the source of the contaminated blood from an Arkansas prison.
This regulation of health products hasn't changed since the blood crisis. It's just, I think, an outrageous example of how trade and investment objectives, if they override health and social policy objectives, can lead to horrendous consequences -- sometimes unforeseen. This, I would argue, is what can happen if you leave the future of medicare and social services in the hands of international trade lawyers, who know nothing about the health care system.
With the abdication of federal health protection duties and the dismantling of the health protection system in Ottawa, provincial health care systems will increasingly bear the brunt of the cost of rising disease rates and deaths in the population. Billions of dollars in scarce provincial resources will be spent on dangerous or useless drugs. Human life and the future of public health care and social services are too important to be left in the hands of international trade negotiators behind closed doors.
The Canadian Health Coalition therefore recommends that the government of British Columbia take leadership, in concert with other provinces, to insist that the federal government reverse the policy direction that puts trade and industrial interests ahead of health, safety and protection. We also call on the federal government to perform its duty to protect the safety of food, drugs and medical devices used by Canadians. The third recommendation is that the government of British Columbia call on Prime Minister Chrétien to convene a national health care summit with representation from all segments of Canadian society, for the purpose of recommitting federal and provincial governments to a securely funded, not-for-profit, comprehensive national health care system.
In conclusion, Madam Chair, the future of our health and social services should not be decided by investment and trade lawyers. Decisions are being made on trade and investment rules that have major and long-lasting consequences. The future of our programs should be decided by the people of Canada, who clearly want their governments -- provincial and federal -- to not only protect but improve public health care, based on equal access.
The federal policy reversal on the NAFTA reservations and the modest success of health advocates in securing better protections in the NAFTA highlight the importance of informed, democratic debate and public education, which your government has initiated. We commend you for this process, and we urge other jurisdictions to emulate the leadership of the Legislature of British Columbia.
The Chair: Before I open to questions from other members, I have a concise question for you, and I would appreciate, in some sense, a summary answer, because many of the points you have made in your presentation.
Minister Marchi stated in Paris on April 27, 1998, that Canada will only accept an MAI with, amongst other things, ironclad reservations that would fully preserve Canada's freedom of action at both federal and provincial levels in key areas including health care, social programs and education. The draft resolution that the Canadian government has submitted, which appears on page 45, is virtually identical to that submitted under NAFTA. My question is: in your view, if the MAI were adopted, does this constitute an ironclad reservation that would fully protect Canada's health care system?
M. McBane: Absolutely not.
The Chair: Thank you.
T. Nebbeling: Just a clarification first and then a question for Mr. McBane. You said during your presentation -- or I thought you said -- that British Columbia has its hospitals overwhelmingly in the private sector, or the majority of hospitals are controlled by the private sector. Is that correct?
M. McBane: Technically, hospitals are private, not-for-profit entities -- mostly.
T. Nebbeling: You are saying that hospital beds are controlled by the private sector, rather than our health system in the province, with that statement.
M. McBane: No. What I'm saying is technically they are private entities mostly, with community boards, with government funding and government regulations. The United States trade representative is arguing that, on a technicality, they would try to argue that even hospitals are not government institutions.
T. Nebbeling: Well, you didn't say that. You made a statement, quite clearly, that the private sector controls the hospitals.
M. McBane: I said that technically they are private institutions incorporated in law.
T. Nebbeling: Do you know that hospital boards are appointed by the government to a large extent?
M. McBane: Hospital boards are owned by the government?
T. Nebbeling: They are appointed by the government.
M. McBane: Appointed? Uh huh.
T. Nebbeling: Okay. I needed some clarification, because I thought it was strong, what you said there.
As a follow-up to what the Chair said, that indeed there are reservations that today are part of the MAI consideration which are equal in strength to the reservations that Canada had put into the NAFTA accord
[ Page 215 ]tate how health care is indeed being managed in Canada. That to me is sacrosanct, but I think the commitment from the federal Minister of Trade gives me some assurance, again, that the objective of ironclad reservations is a principle that cannot be undermined by any other negotiations.
At the same time, I think we have to keep in mind, because we are talking about the citizens of Canada, that Canada today has, in the world global investment system, $180 billion invested. That's money from Canadian citizens, for this money is made up of pension funds; it's made up of RRSPs; it's made up of shares -- people buying shares in Canadian companies. This money today, from time to time, is being threatened by corruptions in certain governments; it is threatened by certain practices that are promoted by certain governments. With that threat
We saw Bre-X happening last year; that could happen because there is no protection on a global basis that dictates that governments are not able to abuse, corrupt, manipulate -- what happened in Indonesia. That alone, as one example, has cost hundreds of millions of dollars to Canadian citizens who thought that they had an investment that was protected, at least being secure from abuse and corruption. It isn't.
[9:45]So when you deliberate, don't you think that instead of saying, "MAI -- we will not support it
M. McBane: Well, I think there are legitimate concerns about the insecurity of the world financial system. The Health Coalition has not pronounced judgment overall on the MAI. But we've examined in, I think, an expert fashion the reservation pertaining to health. It is clearly inadequate and not ironclad and therefore does not meet the precondition for the acceptance of the agreement. But I'm not arguing in theory that there should be no agreement.
T. Nebbeling: Okay, and that's fine, because I thought that in the beginning of your statement you said: "We as the coalition are opposed to the MAI" -- and then you didn't say "because of the aspect of health exclusively." I felt that it was just a broader statement. So it is related to health care and the reservations at this point.
M. McBane: That's right.
T. Nebbeling: Thank you.
M. McBane: We believe that in the areas of health and social services, they should override all trade and investment agreements.
T. Nebbeling: Thank you.
The Chair: Mr. McBane, before I go to the next question, part of Mr. Nebbeling's question was with respect to the lack of challenges under NAFTA. Could you address that question?
M. McBane: Right -- and that's a good observation as well. I think there's a couple of things to point out there. One is that it's
The other thing is that American health care companies, to date, haven't felt the need to pursue challenges in this provision, because several provincial jurisdictions have the doors wide open. In Ontario, for example, the home care sector will be put up for private bids, preferring American for-profit home care providers, by April 1. Obviously the jurisdiction in Alberta is working overtime to set up for-profit hospitals. So the American industry does not yet feel the need to use this provision. But make no mistake that it's there, and it can be used. As we've seen in other areas, American companies are discovering a very powerful weapon.
L. Stephens: Madam Chair, your question for the clarification was a question that I was going to ask, but I want to explore that a little bit further.
The NAFTA has been around for a while. You said that the provisions in the MAI are identical to those under NAFTA and that to your knowledge there hasn't been a challenge from the U.S. to our health care system under the NAFTA. You also said that up until this point in time you didn't think the U.S. was concerned about that.
But I want to ask you this: where do you base your supposition that in fact that will happen? You said that the governments of Ontario and Alberta have put in place or will be putting in place measures that will allow U.S. firms to come into those provinces; that is direct government action. So when we're talking about multilateral and bilateral trade negotiations
M. McBane: Yes, to my knowledge there haven't been challenges under the NAFTA. But it should be pointed out that the reservation used in the NAFTA was acknowledged by the federal government to be inadequate. It then went out and negotiated added protection in general reservation I, which excluded all programs.
There was an acknowledgment that the reservation in NAFTA II-C-9 was inadequate, that it was open to interpretation and had grey areas. The federal government was convinced, partly by the government of British Columbia and other advocates, that we should take out the insurance of clearer language. We would argue that if it was necessary to do it then, it's clearly necessary in the MAI.
The other thing about American providers to date not using any trade provision
[ Page 216 ]have. As we've seen with the Ethyl case and others, these are very powerful rights that can have tremendous influence on government policies.
The other thing is that when you open the door in Edmonton or Toronto, there's also a problem of providing national treatment. It could well be that Vancouver could be threatened by an American presence from some other jurisdiction. There are backdoor ways for a corporate market medicine to infiltrate public health care systems, even when a provincial jurisdiction is trying to protect the public. That's what is so insidious about some of these trade agreements: the notion that one jurisdiction allows them in, and if you have free trade rules that apply and you have national treatment to other countries, potentially what Ontario or Alberta does could rebound negatively on British Columbia's system.
L. Stephens: Just to be clear, on the issue of what is in the NAFTA and what is in the MAI, I heard you say -- this is what I'd like clarification on -- that what is in the NAFTA is in the MAI and that it is not good. Then I heard you say that what is in the NAFTA has been strengthened or was strengthened. I took from what your words said that you thought that that was okay, that the governments recognized that there were some difficulties and went back and strengthened the MAI.
M. McBane: Strengthened the NAFTA.
L. Stephens: The NAFTA, yes -- thank you.
I really want to be clear. What is your disagreement, or what are your fears and concerns around this strengthened NAFTA provision that is, according to you, in the MAI? What fears do you have if you agree that the provisions in NAFTA have been strengthened and there haven't been challenges? Just tell me what your concerns are.
M. McBane: There's an important distinction. The reservation language in the MAI reflects a clause in NAFTA, II-C-9, word for word. However, the corrected or at least added protection in NAFTA is in another provision, in the general annex I, which is not in the MAI. We've lost ground in the MAI language, which has weakened what we got in NAFTA in the reservation -- the new reservation in a different section of NAFTA. That is not reflected in the MAI, so it is a step backwards in terms of being clear and categorical and excluding health. We're now back into contested terrain.
H. Giesbrecht: A question that follows from my colleague's to my right
K. Krueger: What a crock!
M. McBane: Sorry, I didn't catch the nuance there.
H. Giesbrecht: There was a suggestion there that somehow we have to make a trade-off in terms of our medicare system in order to protect Canadians' investment abroad.
M. McBane: Who is making that assumption?
H. Giesbrecht: Well, I thought that was in the preamble to my colleague's comments here.
T. Nebbeling: Point of order, Madam Chair. At no point did I make a statement to that effect. At no point did I challenge the validity
The Chair: Thank you, Mr. Nebbeling. If you're wanting to get on the speakers list, you could identify yourself, and I'd be happy to recognize you. The floor is Mr. Giesbrecht's.
H. Giesbrecht: You could always respond to that, but I thought that was kind of an interesting concept.
I wanted to ask you the second question, which was
M. McBane: One of the problems that we're worried about is the provisions for national treatment. If a company's operating in one provincial jurisdiction and we move to flatten between jurisdictions domestically, they could argue that what they're allowed to do in Alberta they should be allowed to do in British Columbia. That's kind of the backdoor scenario which we're worried about.
In a way, it's not just the trade agreements that are threatening medicare. It's also overt government policy to privatize and commercialize and, in some cases, to favour American providers of services. So we're not arguing that the only threats are in complicated legal language. There are also kind of proactive government policies in some provinces that are opening the door.
But where the trade agreements come into play is that they could well make these decisions irreversible. So if, for example, people in a jurisdiction should decide that the privatization policies should be reversed, from some government it could well be impossible because it would involve compensating all of the American providers.
Another application of this trade and investment distortion of health is in the field of pharmaceutical policy. It's not inconceivable that if the government of Canada, in cooperation with the provincial governments, established a national pharmacare system
Now, there is the right in trade agreements to pursue policies for public purpose. But those are kind of legal, theoretical questions when you're up against major economic intimidation by a multinational company, like you've seen in lumber. We've had experience in pharmaceuticals. It's not just the legal technicalities of a trade agreement that are at stake. Sometimes it's economic blackmail at stake, and economic intimidation, where they'll pose one jurisdiction against another. They'll even exploit regional tensions in terms of moving and threatening to move investments. So there's that distortion and that economic pressure that uses trade agreements as leverage.
S. Orcherton: Thank you, Mr. McBane. Earlier this week we heard from Mr. Bill Dymond, who's the chief negotiator of
[ Page 217 ]the multilateral agreement on investment on behalf of Canada. I'm not quoting per se, but he told the committee that his mandate through the federal government, through the minister, was to secure the exemptions necessary to meet the public expectations of the people of Canada in terms of preserving our health care system. He said that the North American Free Trade Agreement, through some work and some amendments through an annex process, provided some security for the people of Canada in that regard. He also said that the multilateral agreement on investment currently does not provide the same securities that are present in NAFTA.
So my question is: given that we've got two different sets of information here on this particular issue around health care in terms of Canadians, has there been any consultation between your organization, the Canadian Health Coalition, and the negotiators of the multilateral agreement on investment or the federal government on this issue? We were told by Mr. Dymond that in fact thousands of consultation processes have occurred. You seem to be taking a very strong position on behalf of your organization. I'm curious to know if there have been consultations. And if there have, what were the results?
[10:00]M. McBane: No, we've not been approached by the International Trade people. We did meet with the federal Health Committee, and we did submit our concerns and our legal opinions to the federal Minister of Health, because we believe that there have to be effective political interventions by other departments in the trade portfolio.
We don't have any confidence that we're going to convert International Trade negotiators to the importance of medicare principles. That's why we address ourselves to health departments and to Premiers and to Prime Ministers, who then have to instruct their trade negotiators to take these issues into account. But we will be pursuing the International Trade department on these concerns, because clearly they're inconsistent with the changes they made under the NAFTA.
I guess one small clarification, too, is that we're not saying that NAFTA doesn't pose any threats to medicare as it stands. There are still other provisions in the NAFTA investment chapter, as well as some areas that have not been defined and where there will be internal negotiations. So NAFTA is an ongoing process. I guess what it highlights is the importance of an alert, active advocacy to strengthen any flaws that come to light.
E. Gillespie: Well, I did have a very simple first question, and that is: when did the Canadian Health Coalition first become aware of the MAI negotiations and enter into some of these discussions with federal departments and ministers?
But my second question relates to a conversation we had last night with a representative of local government, who talked about investment as risk -- that there is risk with investment and that what he sees under the multilateral agreement on investment is that local governments or individuals become the players who take the risk, where the security is based around investment. I look at our health care system nationally and provincially, and I see a lot of infrastructure that is public infrastructure, publicly funded, that
M. McBane: I think that polling across the country is clear that Canadians really value equal access, and that's clearly a policy objective that has nothing to do with competition or trade objectives. The trade norms are really incompatible with the principles of the Canada Health Act, which states that there should be equal access and no financial barriers to care. Let's face it: that's the last national social program Canadians have. In a sense, that's a defining element of Canadian citizenship, so I think Canadians would fight very strongly to protect that.
There's one caveat, though, in that the polling also shows that this is premised on a social contract, as it were, between the people who pay taxes to support the system -- and in this case, it's primarily the middle class
Right now there's strong public support, but it's being jeopardized by the withering away of quality and access to health care. In health, you sometimes don't have the luxury of waiting. You need access, and if you need access, you'll pay for it if the public services aren't there. We figure we're at a stage now where, if the federal government doesn't make a major recommitment to preserving the national health care system -- a single-payer system -- we will clearly lose it in the next few years as a result of the expansion of private services and the private market. The support's there, but there are a lot of strong forces that could jeopardize that support.
E. Gillespie: And the first question?
M. McBane: When we first learned about the MAI? We didn't have any prior knowledge. It was when it started to become discussed in the media. But as I say, some of the opposition members of the federal health committee did push for a brief discussion of the MAI's impact on health last year, last fall, and we participated. That was our first public examination of the MAI's implications on health, and we were actually quite shocked to discover that it was the same language we had fought so hard to correct in the NAFTA.
P. Calendino: Mr. McBane, after three and a half days of hearings, I think we're all getting a very clear picture of the danger of the MAI for health, social services, education and every other sector of today's society that we can think of. We've asked some of the groups whether they would prefer Canada to continue being at the table or whether Canada should just drop out and listen to the people's wishes, or at least consult them and perhaps make up its mind whether to continue or not.
A number of people say that perhaps we should be at the table there, and some say to drop out. You've indicated that with NAFTA reservations and your input into that, Canada then modified the reservation and solidified the exclusion of health services from NAFTA. What would be your position? Is your organization's position on the health care system that Canada should continue and try to enter an ironclad reservation or exclusion from MAI for health and social services -- if there can be such a thing -- or that perhaps Canada should be told just to drop out of the negotiations?
[ Page 218 ]M. McBane: As I said toward the end of my presentation, we view the MAI discussion in a wider policy context, and we're not that keen on the MAI in general for several reasons. One is that there's a trend in the federal government to flatten regulatory processes, to weaken public regulations, and this is seen as going hand in hand with the trade and investment strategy. Quite frankly, those are the kinds of policy objectives that Justice Krever said are disastrous. For example, we're getting into all kinds of mutual recognition agreements. We're getting into harmonization agreements on drug safety approval, for example, where if something's approved in Romania, you know, we'll take it here. Judge Krever was saying that mutual recognition agreements and harmonization agreements should never replace the federal obligation and capacity to regulate in Canada, so two layers of safety is not enough when you're dealing with this kind of risk.
But what we see happening is that the federal government is using international agreements to completely get out of their federal duties as a regulator -- whether it's environmental, health, telecommunications, the financial sector or transportation -- and this is extremely dangerous. We would argue that what's true for health protection is true for the other sectors of the economy that need to be regulated in the public interest. I would argue that maintaining that capacity to regulate on behalf of the public is more important than pursuing and being a leader in these international agreements, which tend to harmonize down. Canada, unfortunately, seems to be a leader in the weakening of safety regulations internationally. This is a very disturbing trend and at odds with Canada's good reputation.
P. Calendino: Just a quick follow-up. Knowing what's happening in some other countries in Europe -- where there is a public system, but they allow a private system alongside the public system -- I know that people are very reluctant to use the public system. I can tell you which countries: Italy, France and England. When people can afford to get the service they want, they pay and go to private clinics. Those who can't afford to are left with poorly funded public services.
I'm just wondering what your prediction would be if Canada continues on the path that it is now -- going along with the MAI and with the kind of reservations which you've indicated. What would happen to the health care system in Canada?
M. McBane: Well, I guess what I'm really concerned about primarily, coming from Ottawa, is the federal policy in trade, industrial strategy and investment decisions, which is to consider health as an industrial commodity to be traded, to be exported for profit. To me that's a fundamental violation of the Canadian values that view health as a public good to be provided in terms of a whole different set of human values. I think there are some real dangers that if these federal policies aren't checked, we'll end up with a major expansion of commercial operations in the country -- that the trade agreements enter the scene by locking that market medicine in place. So if we start an experiment with increasing the private sector, and we find down the road that we don't like it, it will be next to impossible to reverse it with these trade agreements.
We're basically committing future generations to dangerous market experiments. In England some of them have failed miserably under Thatcher. When she privatized the food inspection system, it led to mad cow disease and destroyed the British beef industry -- the reason government completely reversed that privatization. Those are the kinds of options we may be foreclosing with these trade deals.
P. Calendino: I just want to know whether the public system that we have today would survive at all under the MAI as it's going on now.
M. McBane: I would argue that the MAI in isolation is clearly not the biggest threat right now; in fact, it's the domestic policies of federal and provincial governments. But the MAI complicates and, I think, adds new dangers to that scenario. I'm not saying the MAI is the cause of privatization; privatization is happening anyway. But the MAI comes in and complicates the scenario in terms of future options. It's one more, further threat in terms of policy options for public health care. Obviously there are other major ones in terms of cutting back federal funding, cutting back public funding and other issues as well.
P. Calendino: We understand that there is some reduction in public funding. But what I want to know -- and I think you probably indicated a little bit of that
M. McBane: That's right. Whatever Ottawa negotiates is binding on your jurisdiction. That should be a concern because of the far-reaching implications, many of which are not fully fleshed out and certainly not publicly debated. That's what makes these international trade agreements basically anti-democratic and a poor way to develop policy -- and grant too much power to investors and foreign jurisdictions, especially in the area of health. The government of British Columbia clearly favours community-based health provision, and that's for good reason. If patients know their health care providers are from the community, it makes a lot of sense, as opposed to contracting some fly-by-night operator from the United States that is under investigation for fraud by the FBI. Why would we want to open up our system to that kind of foreign presence?
[10:15]Clearly the Canadian and the British Columbia system is more efficient because it is locally provided and it is public. Obviously it's more effective and more equitable. These are facts that the United States Congress established when they were debating the Clinton reforms. So it's not just a biased opinion; it's recognized internationally that public systems are more efficient and more equitable. Clearly you have to come to the conclusion that those who want to open up the market in British Columbia or anywhere else are doing it for the purposes of private greed and private economic gain at the expense of the common good.
[C. Hansen in the chair.]
K. Krueger: Mr. McBane, could you tell us your curriculum vitae -- some of your background?
M. McBane: My personal background? I was trained in theology.
[ Page 219 ]K. Krueger: What's your education?
M. McBane: Well, theological studies and social ethics is my academic background, so that's social sciences.
K. Krueger: Do you have a degree?
M. McBane: Yes.
K. Krueger: What is your degree?
M. McBane: I have a degree in political science and religion and one in adult education.
K. Krueger: From where?
M. McBane: One from Carleton University in Ottawa, one from Saint Paul University in Ottawa and one from Institute Catholique in Paris.
K. Krueger: What is your occupational history?
M. McBane: My occupational history?
K. Krueger: Yes.
M. McBane: I was involved for about eight years as a researcher in social and economic policy for the Canadian Conference of Catholic Bishops and after that worked with the Action Canada Network around free trade issues. For the last four years I've been with the Canadian Health Coalition.
K. Krueger: These are expert hearings on the issue, rather than public hearings. Those are scheduled later. How did it happen that you arrived on the agenda as an expert witness on this subject?
M. McBane: Well, we've been recognized by the federal government as an intervener on the question of the health care reservation, including meetings with the federal Minister of Health. I think that our experience on the NAFTA reservations is extremely pertinent to the topic of the committee. I would assume that that would be one reason.
K. Krueger: When you speak in the plural, you're speaking for the Canadian Health Coalition rather than yourself -- correct?
M. McBane: Yes.
K. Krueger: Who are the members of the Canadian Health Coalition?
M. McBane: The chair is Kathleen Connors; she's the president of the National Federation of Nurses Unions. As I said, we have the National Pensioners and Senior Citizens Federation, the Canadian Federation of Students, the National Anti-Poverty Organization and the United Church of Canada, as well as several trade unions.
K. Krueger: Will you commit to enter your membership list into the official record?
M. McBane: Yes.
K. Krueger: Were your expenses paid to travel here and present at these hearings?
M. McBane: My airfare was covered, yes.
K. Krueger: By whom?
M. McBane: By the committee, I presume. I don't
K. Krueger: Thank you.
J. Cashore: I would just have to say that, given my own professional background as a minister of the United Church of Canada, it's my opinion that you are eminently well qualified to be an expert witness here. I think that both the discipline of your education and also the experience that you have participated in makes you a very fitting witness. There has been some concern that we haven't had expert witnesses, in the volume of witnesses that we would like to see, that are from other perspectives with regard to the MAI, but the Chair has made the point on many occasions of how much we have appreciated it when that kind of testimony has been available. The work of the committee goes on, so that testimony is still desired, because we want to hear all perspectives.
What I want to ask you has to do with the area of the kind of approach to consultation that is being taken by the federal government, the ministers responsible, with regard to informing themselves of the variety of public issues and interests as they prepare their mandates for the negotiators of the MAI. I would like you to comment on that. Have you had the opportunity to be in dialogue in that process? Have you been heard? Is that an ongoing dialogue? Is it an exchange of letters? Have you been able to attend meetings where you've met with government officials -- that sort of thing?
M. McBane: We're quite concerned by the federal process. It clearly does not really involve the public very much. There were limited hearings in Ottawa, but since that time it seems they have gone back in behind closed doors. We did express our concerns to the federal Department of Health and to the federal Health Committee. Other groups, of course, have raised the issues directly with International Trade and the hearings in the House of Commons. But we'll continue to represent the concerns to the international trade negotiators, and obviously would urge provincial jurisdictions to raise some of our issues with them.
[J. Smallwood in the chair.]
The Chair: Thank you. I have one further comment, and then the committee will move on to education.
Mr. McBane, I have to confess that I found your testimony very disturbing, as we in this province have followed the real threat to health care in Canada. You referred to some of them in other provinces responding to the federal cutbacks in very different ways than the way we have tried to respond here in British Columbia. I think that citizens have a right to be concerned, and I certainly support your articulation of those concerns.
Here in B.C., I think the pride that Canadians feel in their health care system has been reflected by a government that
[ Page 220 ]has continued to invest in public health care, that has to the best of our ability not only articulated that at national tables but has moved very aggressively here in this province to protect the medical system, the public health care system. Not only have we seen real threats with respect to federal cutbacks, but the threats that you articulate with respect to NAFTA and the lack of protection in the MAI, I think, validate the concern that citizens in this country have felt. I'd like you to take a moment and in summary perhaps reflect on those comments in your answer.
M. McBane: Well, I think that in some ways it's fitting that the Legislature of British Columbia would take the leadership in examining implications of the MAI, because it is one of the most significant and strongest health care systems in the country. B.C. has taken leadership nationally in a number of areas, including with its Pharmacare program, and as I said, has taken measures in previous trade agreements to fully carve out and protect health care from trade. This I think is a reflection of Canadian values: that equal access to health care is the essence of what it means to be Canadian; that these are non-market values.
Therefore the burden of proof shouldn't be on us who are trying to protect public health care. The burden of proof should be on international trade negotiators, who are basically bringing together a very complicated series of documents full of grey areas of interpretation. The burden of proof should be placed on them, for them to show that public access to health care would not be threatened, because clearly the people and the Canadian values are on our side. The people of Canada want their governments to defend those values.
The Chair: I think you've made it very clear in your testimony and in other questions you've answered with the panel that you do not believe that the provisions that have been articulated and that are in black and white in the draft MAI adequately protect that health care system that we are so proud of.
M. McBane: Absolutely. The terms that are used as conditions on the reservation -- "public purpose," for example -- are not defined. The Americans have a completely different interpretation of what that means, of what a public purpose is. Therefore there isn't an ironclad reservation with this language, and if it wasn't good enough for the NAFTA round, it clearly is not good enough in the MAI and does not constitute ironclad exemptions.
The Chair: Thank you very much for your time and your expertise. We now move to our next presenters. We'll ask the next three presenters to join us at the front table. They're representatives from the Canadian Federation of Students, college educators and the Confederation of University Faculty Associations of B.C.
E. Lavalle: Could we take a minute to get the documents for your committee?
The Chair: Certainly. Yes, go ahead.
All right. If we can reconvene the panel after our setup, I'm assuming you've had time to get your material circulated -- yes? Thank you. Welcome, and thank you for making yourselves available to the committee and sharing your expertise.
[10:30]The panel process that we're engaged in -- the expert-witness portion of our committee's hearings -- will allow our committee to do an interim report to be used as a discussion document along with a condensed video of the hearings. It is our sincere hope that by providing this opportunity, we will be able to encourage and further and support discussion with respect to the MAI -- and in particular on the principles that are enveloped in this round of discussions, in recognition that, regardless of the conclusion of the MAI, those very principles are part of ongoing trade negotiations and investment negotiations. Your input is welcomed by the committee and is of value to the citizens of British Columbia.
This particular portion is specific to the impact of the MAI on health care and education. I understand that you will be focusing on the education aspect. Our first presenter is Maura Parte.
M. Parte: Actually, we've kind of arranged amongst ourselves here an order that we'd like to follow, if that's all right.
The Chair: We're a very informal group, so you just let us know how you'd like to proceed.
M. Parte: Okay. We're going to start with Ed Lavalle from the College-Institute Educators Association, then Rob Clift from the Confederation of University Faculty Associations. Then I'll present.
The Chair: I would ask the presenters to introduce themselves with a little bit of their background and their expertise, then to proceed with their presentations. After the panel has concluded, the committee members will have an opportunity to ask questions of you.
E. Lavalle: My name is Ed Lavalle, and I'm the president of the College-Institute Educators Association, a professional organization and trade union representing 7,000 faculty and some support staff in British Columbia in 19 public institutions and a number of private institutions. A little bit of description of our organization may be found in the brief that has been provided, which has a blue cover. It may be the only blue piece of paper on your desks. In my professional life, I'm a faculty member. I teach in the area of international relations, and I also teach in another department in terms of labour studies. I'm pleased to appear on behalf of our organization today. I'm especially pleased to appear with my colleagues from the university and from the Canadian Federation of Students.
I want to start off, if I may, by thanking the special committee of the Legislature for actually being in existence. The possibility, especially for those of us in the west, to have access to a forum on these issues is greatly enhanced by the fact that you chose to have this committee, while the House of Commons committee chose not to travel across the country. We're very pleased that we can have some input.
The input that we wish to give will concentrate primarily on the effect of the MAI in its draft form -- I know that this document has not been finalized -- as we see the principles emerging in the document, the effect those will have on post-secondary education and on culture.
In our brief, on page 3, we describe briefly the college, institute, university college and agency system in which we
[ Page 221 ]are a representative body, as opposed to the university system, though many of the remarks which we'll make will in fact be general. I think the most important point is one that we make on page 4. That is that the post-secondary education system in British Columbia is by and large a public treasure. It is something that the people in the province of British Columbia, across all decades of political life, across all political parties, have a substantial investment in. Therefore the question has to be asked: will that investment in fact be threatened, or will it not be threatened by the principles that now appear in the MAI?
It is our position, which we set out in this paper, that in fact it is threatened. It is threatened because the fundamental premise of the MAI is that post-secondary education and culture are commodities. In the province of British Columbia, post-secondary education is a part of the public goods and services which are consumed by the public. Those public goods and services, in terms of an MAI ideology, can be delivered in manners other than as a public good or a public service. Or in some cases if it's not a public good and service, it's at least one that has been regulated by the public through government.
Therefore, given that, we have to ask whether the MAI, which intends to free up and in fact open up borders, regulations and structures in which public goods and services might flow
However, if that does not become possible, then we feel it is absolutely critical that the government of British Columbia, especially, ask the government of Canada to ensure that there are sufficient protections. On the question of protections, which we begin to discuss on page 5, we understand that there are basically four protections that have been proposed. They're in the area of reservations, in the area of carve-outs, in the area of provincial reservations -- or what might be attributed to subnational bodies -- and in the area of the protection or the entitlements to monopolies. In a nutshell, to bring you the conclusion before the argument, those protections, as we see them emanating in the discussions between the government of Canada and their OECD partners, are not adequate to cover the needs of the level of public goods and services that are not only desirable but that the people of British Columbia have come to expect.
With regard to the reservations and the carve-outs, we know that there is a carve-out on culture being proposed, along with the French, but not on social services. Some reservations are being discussed, and those reservations are being discussed in the language that was consistent with NAFTA, which we reproduced on pages 5 and 6. That basically says, looking at the top of page 6, that the social services on which there might be a reservation are "to the extent that they are social services established or maintained for a public purpose."
We submit to you that were we to stop only with the term "public purpose," two things would happen. First of all, the very term "public purpose" has an ambiguity and a vagueness which cannot bring any kind of solace or comfort to anybody. Secondly, even if we went along with that language, that language can only be defined by a long process of litigation through tribunals, which are not transparent in terms of public interest and which are cumbersome and from our perspective unworkable, when we look at the tribunal system that was established under NAFTA and some under the World Trade Organization treaties like the General Agreement on Trade and Services. So if you can only make this definable in litigation, we would say that if there was to be protection in reservations and carve-outs but particularly in reservations, those reservations should be explicitly defined and the term "public purpose" be transcended so that we overcome the ambiguity.
Speaking on the question of reservations for subnational governments, I guess I don't have to point out -- you've probably heard it already from others -- that there really is no protection for subnational governments. In fact, if we look at the individual interventions in the process, there are a considerable number of non-federal unitary states who in fact oppose the recognition of subnational organizations, which would therefore give organizations that have protected post-secondary education, like our province of British Columbia, very little leverage in terms of coming out of an MAI process with that intact.
On the monopoly provisions, there is language -- some of it is reproduced on pages 7 and 8 -- which would say that national governments have the capacity to continue their recognition of monopolies. In terms of post-secondary education, this is no protection -- for two reasons. First of all, in the province of British Columbia, I would submit that no monopoly in post-secondary education in fact exists. A regulatory power over all post-secondary education, whether it be university, college or private, through the various acts that established the universities -- the College and Institute Act, which establishes the colleges; the Open Learning Agency Act, which establishes the agencies; and the Private Post-Secondary Education Act, which deals with the private facilities -- is an indication that the provincial government is a regulatory agency, but it is not an operative monopoly.
In the area of the universities, we already have a private university called Trinity Western; in the area of colleges, we already have accredited and registered private institutions. Therefore we can take no comfort.
I think we all understand the MAI principle that once a reserved power or a protected power has in fact gone out of the sphere of protection, out of the sphere of monopoly, it cannot return to monopoly -- under the kind of thinking that's within this document.
Not only that, you don't even have to have capital or be amenable to regulation to appear in the province. There are considerable -- and we attach evidence of these -- private corporations in education, in the multimillions of dollars, operating in North America already. Some of them are virtual, which means that they have no capital assets in the province, do not have to register in the province and can in fact -- like the University of Phoenix -- intrude in the educational process without regulation. Under certain kinds of arrangements, they find themselves in fact having to be recognized here, under the MAI provisions.
[10:45]To bring this to a close -- because I think you can, in some cases, read the paper when we talk about some of these things in discussion -- there's a considerable threat here in terms of how we subsidize our public education, the kinds of
[ Page 222 ]subsidies that go to students in the form of grants and loans, and the kind of regulation that we pursue here. There's a very good possibility that foreign corporations can in fact ask for that kind of treatment for themselves in the province under the MAI provisions. At present there are 230 private educational institutions that are solely government funded. In the last little while, the province of British Columbia has decided to move some of that training into the public sector. Under MAI provisions, that would not be possible without substantial and very expensive compensation to private trainers who were moved out of the system, because there was a preference to go back to the public delivery of these goods and services.
So I would say, for all the reasons that I've stated and some additional ones in the paper, particularly those things that have to do with protecting the four corners of our public system -- relevance and quality, accessibility, affordability and accountability, which we talk about on page 13 -- that we would have to recommend that the government of British Columbia take the position that we not proceed. If we need to proceed, there should be a carve-out for issues of social services and culture -- and in social services we include education -- and the government of British Columbia should do everything in its power to make common cause with the other provinces to force the federal government into a position where we will protect Canadian interests in the MAI discussions if we must participate in them.
R. Clift: Hi. I'm Robert Clift. I'm the executive director of -- contrary to your sheet -- the Confederation of University Faculty Associations of British Columbia. We represent university faculty, librarians and other academic staff at UBC, SFU, UVic and the University of Northern British Columbia. As for my area of expertise, I work for the organization on a full-time basis, but I'm also a graduate student at the University of British Columbia, where I specialize in the history of student organizations and accessibility issues. Our organization has chosen not to take any particular position with respect to the MAI, but we have presented to you today a research paper which documents our preliminary analysis of the potential effects of the MAI on the post-secondary sector -- for the most part particular to universities, but we make some broader comments as well.
You will note, when you have a chance to read the full paper, that there's an underlying anxiety about this. This is because even though we have not taken a position, we do have the position that we are in favour of a public post-secondary education system in this country -- a public education system generally -- that ought to be well funded and accessible to a broad swath of society and that there are many implications arising from the MAI on those principles. In that sense, this is where the underlying anxiety comes from in the paper.
Our paper, as I said, tends to be a technical analysis of the issues as we best understand them now from the draft MAI text. As Ed has already pointed out, the MAI has full effect on the post-secondary sector. The monopoly provision was an idea that developed in my analysis that might offer, under a last-ditch attempt, I guess, to protect our sector -- some opportunity for protection from the full effects of the MAI. However, I have little faith in that that monopoly provision can be withstood long, precisely because the MAI is designed, at its root, to be unfriendly to monopolies of all sorts. As Ed has rightly pointed out, this is scant protection.
The effect of the MAI will be, as you're well aware
Under the investment incentive provisions of the MAI, except in the cases where they are solely for cultural purposes in the sense that there was a cultural carve-out created or it can be proven -- although one wonders how you prove these things -- that there are no net economic benefits to be derived from this research, this funding has to be open to international competition. For example, I can imagine the situation where there may be a grant put up by the federal government to study, for instance, the adaptation of the Inuit to the creation of Nunavut and the political structures and such. In a competitive research environment, this could easily go to somebody, say, in Germany, as one of the signatory countries to the MAI. One would imagine that would never happen. One would hope that would never happen, unless there's somebody very well skilled in Germany. On these matters, this is the type of thing we get into. Actually, this issue applies generally to issues of government procurement, because the federal government -- and indeed the provincial government -- spends a great deal of money every year on research, which predominantly goes to Canadian corporations, Canadian universities and other post-secondary institutions where the expertise exists. Similarly, these contracts will also be opened to foreign competition. The effect is that the research is taken out of context. We lose the "made in Canada, understood in Canada" context of these things.
The other effect is that these contracts and these research grants, as I said, are not simply for the benefit of the researchers. In the case of the federal research granting councils, these research contracts or research grants also support graduate education. There are a great many graduate students who would not have a place to study, would not have a place in the institutions, if it were not for research grants coming through their supervising faculty members.
The other issue at hand, which I'm sure Maura will get into, is how this potentially applies to student financial assistance programs. Currently, the full range of student financial assistance programs, including the grant component, is available primarily to public institutions in this province and, I think, to a very limited number of
The question you get, then, is the issue of quality control. At this point, although certainly the Vancouver Sun has indicated some difficulties in quality control in the private post-secondary sector, this has not been a large public policy issue; it has been a consumer issue. When it comes to the point
[ Page 223 ]where large amounts of public money are being given to students going to institutions of questionable quality, this becomes a huge public policy issue.
Now, the question that we also have to ask, being academics, is: what are the potential positive effects of this agreement on our sector? I have to say that they seem to be few. There could be an influx of education or demand for education, training and research coming in from increased foreign investment. Certainly we saw some aspect of that when the patent protections changed for pharmaceuticals; there was an increase in spending on the pharmaceutical research in Canada after those changes came into effect. However, as a brief that the British Columbia government prepared has indicated, the influx of foreign investment after NAFTA seems to have been somewhat in question. Similarly, this would be a question that we would raise with respect to MAI: could we really benefit from that?
Further, there is potentially a benefit for Canadian institutions -- those entrepreneurial Canadian public institutions that want to establish a stronger foreign presence. They might themselves then have access to public subsidies in other countries. In general, our organization has taken the position that certainly we see Canada's role in developing educational research enterprise elsewhere in the world, but this is part of our responsibilities under international development. It's not part of educational imperialism. This is, I think, what this leads to, if we expect that Canadian post-secondary institutions should take full advantage of the MAI and expand outward. It seems to me, once again, that we're losing the focus on why our public post-secondary system exists.
As Ed has already explained, there are a number of options, and the monopoly option is, as I said, a construct that may work in the last ditch, but it provides scant security. Similarly, the reservation options, once again, anticipate that the reservations will be eventually taken off. So the Canadian government's assertion that their broad protection for the public sector, for public services, is somehow going to do it is, I think, just not on. The carve-out provision remains the best way within the terms of the MAI to protect the sector. And, of course, the issue of whether or not the MAI should be signed is not one that we've taken a position on, but I'm sure others will share with you.
I'll leave my presentation at that and be happy to answer questions. There is a one-page executive summary at the front of our brief, which highlights all the results of the technical analysis, and I'd be happy to answer any questions on that or my presentation.
M. Parte: I'm here today on behalf of the Canadian Federation of Students, which is a provincial and national student organization representing over 400,000 students across Canada, including 100,000 students in British Columbia. These are students at the college, university undergraduate and graduate levels in British Columbia.
Our organization is gravely concerned that the MAI will have a negative impact on post-secondary education in British Columbia and in Canada. Students in B.C. have thoroughly discussed and debated the potential impacts of MAI on our society. At our provincial general meeting of our organization we passed a resolution -- which is on the first page of our brief -- which clearly indicates that students' concerns about this agreement go far beyond specific concerns for its impact on post-secondary education and focus on other social programs, public services and, as well, on the anti-democratic nature of the agreement itself and the secrecy surrounding Canada's involvement in the MAI negotiations. I think it's important to point out that our opposition is not specifically based on post-secondary education but on all other aspects of the agreement as well.
I'm not going to get too specific about monopoly provisions and reservations and carve-out. I think that's been thoroughly covered by my colleagues here today from the college and university faculty, but I will, however, get more specific about the impact this will have on access to education and the democratic nature of our public learning institutions. Just to add, in terms of the monopoly provisions, things are already underway here in British Columbia, with Royal Roads University potentially becoming fully private after the year 2001 and with the former president of the University of British Columbia, David Strangway, trying to create a private liberal arts university for more affluent students in Whistler. That would certainly threaten the monopoly that we may or may not have on public universities.
To begin, I'll speak more specifically about the corporatization and privatization of our colleges and universities in British Columbia. Under the MAI, it's clear that public funding and access to quality post-secondary education would be in greater danger, but right now massive government cutbacks to post-secondary education at the federal level are already resulting in the privatization and corporatization of our public colleges and universities as they scramble to create partnerships with private industry in order to make up these funding shortfalls. Public funding, as well as public ownership control and regulation from the post-secondary education system, is being replaced by private dollars, private ownership, private control and no regulation of things such as tuition fees.
Some recent examples, both within B.C. and in Canada, are: the decision by the Ontario government to deregulate tuition fees for graduate, professional and some college programs
[11:00]Business interests are shaping many aspects of our post-secondary education, including setting tuition fee levels, determining what gets taught in a course and by whom, which supplies get used for a course or program and which programs or courses receive funding and which are cut. I think most of you would be surprised to learn that here, even within British Columbia, at the University of Victoria, if you are taking a chemistry course, at the end of your lab there may be a quick advertisement done by your lab assistant promoting the company that provided your equipment for that day's lesson.
[ Page 224 ]Some examples across Canada
Our concerns are that education is becoming a very lucrative market, like health care is becoming. The possibilities for corporate partnerships at the primary, secondary and post-secondary level are estimated to be worth anywhere between $50 billion to several hundred billion dollars annually. Under the MAI, it would be impossible to remove this corporate influence from our public colleges and universities, because they've already been opened up for business. The MAI would further this and give foreign-based corporations completely unfettered access to students and their educational environment.
Another problem is that our post-secondary system is increasingly becoming a mixed public and private system, which only increases the rights of corporations to access the market. Although the federal and provincial governments still fund roughly 50 to 70 percent of the cost of education, depending on the province, the percentage of public funding has dramatically declined over the last ten years. And with no current commitment at the federal level to restore cutbacks to post-secondary education, it is likely that this level of private funding, through both corporations and user fees from students, will continue to increase.
I know that the area of student financial assistance has already been touched on by my colleagues, but there's a couple of points further to that. As for students of private institutions having access to our public student loans program, policies in this province already encourage that. In fact, there are hundreds of private post-secondary institutions in this province already, where students are receiving student loans through our provincial government. That is being changed, however, to ensure that in the next few years these students loans are only available to those private institutions that have gone through an accreditation process and are regulated by the Private Post-Secondary Education Commission. Of course, we'd prefer that no subsidies were provided to private institutions at all, especially since the changes will allow for grants and loan remission to be available to these students. What is at question here, and what Rob pointed out as well, is whether or not students originating from outside of Canada will in the future have access to our loans program.
Another concern in the area of student financial assistance would be the ability of our governments to create grants programs to create further assistance for students, given the level of increasing competition between the private and public student loans programs. Currently, public student loans have been entirely needs-based and managed that way since their introduction in the 1960s, but recent amendments to legislation at the federal level have made it possible to start including such criteria as credit history checks in providing public student loans. This could mean that in the future there will be very little to distinguish between private and public loans. There's a number of banks that are currently marketing loans to students and very actively doing that. So there may be some questions, and further analysis is required on how that would impact on a government's ability to, say, introduce a national program of grants -- which is something we've been calling for, given the high levels of student debt that graduates are facing.
One of the key areas which we think the MAI will impact, as well, is the democratic nature of our institution, and as students we've been instrumental in trying to establish guidelines for regulating and holding accountable the companies which are taking up residence on campuses. Yet these regulations, even though they've been passed by our governing boards or senates, could be repealed under the MAI. Governing boards, which are supposed to represent the interests of the community, would have to submit to and accept the ruling of an unaccountable tribunal established under the MAI. For a recent example, just this week, on Monday, the University of Victoria board of governors defeated a motion which would have enabled various corporations to advertise their name on classrooms within the institution in exchange for donations. Strong pressure from students on campus to not allow corporations in the classroom forced the university to change its position on corporate involvement. This would not have been possible under the MAI.
In short, I'll just run through some brief points about other aspects of education that the MAI will impact. Number one, as we've already covered, is the pressure governments will face to open the door for private educational institutions. Governments will be disallowed from favouring a public community college over a foreign-owned institute for providing worker training or programs such as language training for new immigrants. Provincial governments will be prevented from establishing or maintaining policies that promote Canadian content in the development of curriculum. Provincial governments could be restricted from utilizing purchasing guidelines for educational materials and services that might favour domestic companies. The application of limits on the advertising and marketing practices of corporations on campus could be forbidden. And restrictions on the application of hiring quotas that give preferential treatment to local workers
So in closing, I think what's really for sale here is the rights of students. Corporations are going to be granted unfettered access to a new generation of consumers, and that's us. They're being increasingly allowed to advertise on everything on our campuses from computer screen-savers to the name of a particular course, as we've mentioned. So our consumption habits, values and political views are being influenced from within the walls of academia.
One of the most damaging aspects of this agreement, as well, is the impact it will have on our ability to access public education. We're shifting away from building institutions which exist to serve our public good in often unmeasurable and unquantifiable ways, such as furthering knowledge and having an educated electorate, to institutions that exist to serve private interests which, as exemplified by the bottom line of profit maximization, are infinitely measurable and quantifiable.
[ Page 225 ]If we examine educational policies at the international level that are being adopted through Asia Pacific Economic Cooperation and through the Organization for Economic Cooperation and Development, we'll see that there's a clear agenda of globalization for education, and it's based not on preparing for people to participate in a democratic society but rather on preparing workers for business. Focusing on education to train workers not only serves the economic interests of the corporations but also diminishes the capacity of people to demand that governments take power to limit the power of corporations over their lives.
What is really at stake is our ability to make the right decisions in society. Each day, as our world grows increasingly complex and our government systems grow more sophisticated, we need to be able to have the tools to challenge this more effectively. That's what's going to be taken away from us as our access to education is being reduced, not for all of us but for those of us who can no longer afford it.
In closing, we're very concerned that the multilateral agreement on investment will lead to the dismantling of our public post-secondary education system, and we would strongly recommend to this committee that Canada not participate in the MAI negotiations. We would reject any attempts to negotiate reservations or carve-out, because as I've stated previously, our concerns about this agreement extend well beyond how it specifically impacts post-secondary education. I'd also like to thank this committee for providing us with the opportunity to present to you today and have our concerns incorporated into British Columbia's presentation on the MAI.
The Chair: Thank you to all presenters. The list of questioners is Lynn Stephens, Pietro Calendino, Steve Orcherton and Colin Hansen.
L. Stephens: Thank you very much, and thank you for being here this morning. All your presentations contain quite a bit of information and discussion. I have a series of questions for all of you, so this may take a little while.
First of all, Mr. Lavalle, one question. You said that you currently have a teaching position as well, so that you are in a classroom and are aware of the difficulties contained in classrooms today in the post-secondary institutions. A question would be: which institution are you teaching in? And if I could, I'll go through the list of questions, if you want to make note of them and then just perhaps answer them when I've completed my questions. So that's one.
In your document, you state on page 4: "Does the MAI apply to post-secondary education and culture?" And you go on to state: "The MAI, in its current draft, is a broad trade agreement dealing with most goods and services. There are two ways in which governments can choose not to have certain activities under their jurisdiction covered by the agreement." Yet the OECD policy briefs state:
"In May 1995, OECD ministers launched negotiations on a multilateral agreement on investment (MAI). The mandate for the negotiations is to achieve a comprehensive multilateral framework for investment with high standards of liberalization and investment protection with effective dispute settlement procedures and open to non-OECD countries.So the two are very different, and I would like you to comment on that as well.
"The MAI is designed to provide a 'level playing field,' with uniform rules on both market access and legal security. It aims at eliminating barriers and distortions to investment flows, promoting a more efficient allocation of economic resources, and thereby achieving higher economic growth, more jobs and increased living standards."
As you know probably better than many in this room, international students pay a very high percentage of their education costs in this country. It's probably three or four times the tuition rates for British Columbia students. I have to and do sympathize with both Robert and Maura and with students generally in the province that tuition rates have been climbing. There is a freeze in this province, but in my view, this tuition freeze, instead of helping the problem, is making the problem worse. The kinds of choices for students in their choice of programming has decreased, and it's taking longer for students to get the kinds of courses that they need and therefore to complete their education.
Another question I have for you is: in your opinion, do you believe that Canada needs, and that there should be, an agreement on investment activity?
E. Lavalle: Let me take these one by one. As the president of CIEA -- it's a full-time position, almost -- I do some occasional teaching in the area of labour studies. I teach collective bargaining, grievance handling -- things like that -- and labour law. I'm on leave from my position with the department of political studies at Capilano College, where I teach mainly courses in international relations and international organizations. I am a working faculty person; I'm on leave; and I have to be elected year by year. I hope that answers your question. I'll be going back into the classroom next year. That was your first question.
Your second question -- I didn't hear in anything that you said to me a variance between what we said and what the OECD said. I mean, I have the OECD document. I have the analysis of it, and it deals with investment over goods and services. It makes no discrimination as to what kinds of goods and services there are. Those could be social services; those could be public goods and services. So I'm not sure that I follow the question.
L. Stephens: Perhaps I can clarify. Under the NAFTA, the NAFTA was specifically dealing with goods and services and the definition of goods and services. The MAI, as they have defined it, is dealing with investment.
[11:15]E. Lavalle: Yes, but investment in what? Investments in businesses, enterprise, organizations that provide goods and services.
L. Stephens: I understand your taking the definition to that degree, and I guess there's some argument about whether or not it's a valid one. However, if that's the one that you choose to make, then that's entirely up to you.
E. Lavalle: Yes. Generally there isn't a practice
L. Stephens: I'm simply pointing out that the OECD has said that the mandate is to achieve these comprehensive, multilateral frameworks for investment with high standards of liberalization and investment protection. That's, sir, the issue that the MAI is dealing with.
E. Lavalle: So do you feel, then, that the federal government -- which has made an initial thrust to get a carve-out on
[ Page 226 ]culture with France and to maybe get the same kind of language that there was in NAFTA -- doesn't really understand what the MAI is about?
L. Stephens: Oh, I think I would ask you what your interpretation is of the areas around the carve-out -- whether or not you believe, in fact, that what has been proposed in the MAI is sufficient. Just to sort of take this aside, we've had a number of people that have come before us who have said that in fact it isn't. I think most members of the committee would agree that there needs to be some significant strengthening of the language, before the federal government or any of the other countries should even consider signing something like this. I think it's fair to say that there are a lot of questions around this agreement and that, in many respects, it's not acceptable as it stands.
So if you could, just answer my question as to whether or not you believe that we do need a multilateral agreement on investment -- whether or not, in your opinion, that's something that's desirable.
E. Lavalle: Yes, actually, we do need some international agreement on investments. In fact, there are several agreements that have already been negotiated in the United Nations -- particularly in the United Nations development program, in EcoSoc and some of the other economic agencies. There are investment protocols on protection of the environment, on labour standards, on the behaviour of corporations and what a good corporate citizen is, and those I applaud. Unfortunately, those have neither got the prominence nor the implementation possibilities that an MAI or a NAFTA have.
This MAI, as I understand it, is not about protections; it is only about opening markets. If we take only opening markets out of the context of what other factors should be considered, then I think we're making a mistake. If we do need an investment agreement -- and I think we probably do -- it must be comprehensive as opposed to focused only on basically wedging open markets.
L. Stephens: Okay. Maura, your paper is on dismantling of public education?
M. Parte: Yes.
L. Stephens: And then you go on to talk about -- and you highlighted this specifically -- the privatization of colleges and universities. There is a trend, and has been a trend over the last few years, of strategic partnerships between businesses and corporations in post-secondary education and a little bit perhaps in the K-to-12 -- not very much, but certainly at the post-secondary level -- primarily to try to provide, as I understand it, some resources to the institutions to provide programming and so on for students.
If we say that we need to have more resources into the classroom -- and I think everyone understands that governments aren't providing the resources that used to be there
When we talk about providing the kinds of resources to the colleges and universities that we require -- and I think everyone agrees that we need to have the best education system that we can possibly deliver -- how do we get those resources? It has to come from either the taxpayer in the form of taxes, or it has to come from some other creative, innovative way of forming those partnerships. Perhaps you could tell me what your suggestions may be on how we can get those resources.
M. Parte: Sure. I think, first, it's important to point out why we have a public post-secondary education system that exists like it does today in Canada. That's because the federal government, since the 1940s, has played a strong role in the development of this system in funding the system through transfer payments to the provinces. I would actually reject the notion that there's no longer any money or resources available through public dollars to fund our post-secondary institutions. It's not as if post-secondary institutions have surpassed the amount of funding that's being made available to them; it's that governments have made conscious decisions to cut billions of dollars out of the public post-secondary education system in the last decade.
On the issue of corporations and what their role should be in funding post-secondary education, I think that they definitely have a role to play in funding post-secondary education, and they should. They should be paying for post-secondary education through the progressive tax system that exists in this country. If you look at the shift from corporation tax as a percentage of the tax base to personal income tax as a percentage of the tax base, I think it's time that we started shifting that more back the other way, as it used to be.
As well, with corporations and businesses in general, there has been a trend to do less in-house training and rely more on our public institutions to do that training for them. That has also put an added pressure on our public institutions. I think if we let direct corporate funding into our universities and colleges, we will pay the price for that in terms of our curriculum being influenced and in terms of our values and our ideas and the way we challenge society completely being compromised. Yes, corporations do have a role to play and business does have a role to play in funding education, and they should do it through funding governments to do that.
I also want to touch on something that you mentioned about the tuition fee freeze. If the multilateral agreement on investment came through, it may impact a government's ability to regulate things such as tuition fees. The tuition fee freeze in British Columbia is about providing access to post-secondary education. It's about ensuring that people from all sectors of society have an opportunity to go on and participate in education at the higher level.
In terms of there having been some questions raised about quality and about wait-lists, those are issues that we as students are very, very concerned about. Again those issues link directly back to funding. We have to ask ourselves some questions about whether we want to compromise access to post-secondary education at the expense of quality. I would say we want both, and that's why we want good public policy -- like freezing of tuition fees, like looking at ways to reduce tuition fees. And on the other end we want a system that's funded, as well, so we can ensure quality and we're not losing programs and waiting in lines and everything else.
[ Page 227 ]L. Stephens: In your presentation, Maura, you talked about national student grants. Could you expand a little bit on that and what you mean by that?
M. Parte: Sure. Canada is currently only one of two countries in the Organization for Economic Cooperation and Development that do not have a national system of grants. Japan is the other country, so we're the only western industrialized nation. Grants would be provided to students on the basis of need. Currently, if you're taking out student loans in British Columbia, there are some grants provided by the British Columbia government, but 60 percent of the loan that you negotiate is at the federal level. And there is no grant provided; that is all in the form of a loan.
What we're saying is that students are graduating with unacceptably high levels of debt. As you've probably heard, the average borrower debt load for this year is going to be $25,000. We would like to see the federal government move into the direction where they would be providing grants to students on the basis of need, for those students who have the ability and the desire to go on and seek post-secondary education.
L. Stephens: My final question that I'd like you to answer is for all three of you. A couple of you talked about private education. The percentage of students in private education -- certainly in the K-to-12 sector in the province -- is somewhere around 8 percent and growing. Trinity Western was mentioned. That is a university that now has university status and is just next door to my riding in Langley. I wonder if all three of you would care to comment on your support for public education and private education and where private education would fall within the education system in British Columbia. Is it important? Do we need to preserve it? Should choices in education be enhanced and expanded? What are your views on that?
R. Clift: I'll speak specifically to the university sector. Ed is the expert on colleges and institutes, and I won't trod on him there. The question always is, in the university sector, one of excellence and commitment to academic pursuits. As you well know, as all committee members should know, there are large numbers of private institutions that are excellent institutions -- and the U.S. is particular example. In many cases, they are the ones we aspire to be.
But the difference, I think, in the time that we live in now is that if someone's starting a new university today, the question would be: are they aspiring to that academic excellence, or are they aspiring to a bottom line? Clearly, the University of Phoenix is aspiring to a bottom line. It's a public corporation that has a responsibility to its shareholders. It may well provide excellent programs. I don't know; I'm not in a position to evaluate their programs. But as we move down that road, the commitment to that excellence and the public nature of that excellence is what's called into question. This is very much the problem with private support for other activities on campus, such as research. There is a balancing act about fulfilling the requests or the desires of a private sponsor and advancing a public good in that. We're getting to the point where we're overbalancing, and we're getting to the point where private interests are now overcoming the public interest.
A particular example, I think, is one that was recently profiled on the CBC and certainly in the Toronto papers. It was the example of Dr. Nancy Olivieri at the University of Toronto. She was working through the Hospital for Sick Children in Toronto, where she was involved in testing a new drug. Don't ask me to remember the science of it; I'm not a medical person. But she had found that contrary to what they had first anticipated in doing the drug trials, there appeared to be a negative effect resulting from that drug -- in the treatment of children with liver problems, I believe it was. When she decided that she wanted to go public with this information -- doing the things that academics do, which is to do a ponderous study that's rigorous and then communicate that to your colleagues, so they can have a look at it and check your results -- the drug company said: "No, you can't do that. You signed a contract where you said you weren't going to disclose the results of this. If you disclose the results, that would be prejudicial to our financial interests." Well, Dr. Olivieri did the right thing in the eyes of academe, which is that she said, "To hell with you," and she went public. There's now a debate about the effectiveness of that drug, which is what it should have been all along.
That's the problem we're heading to: academic excellence is now being overtaken by private interests. There's always going to be a role for private institutions, provided that in the universities you stick on that question, which is openness, academic freedom, autonomy and academic excellence.
M. Parte: I think that every time I step on a bus in this city or around this province or look at bus signs I see ads for private post-secondary institutions and private business college training institutions and everything else. You know, I obviously feel very sad for those students who are going to those institutions and probably will be calling up our office or other student union offices or organizations in the province to complain about the education they've received and the job which they were promised they were going to get at the end of this training that doesn't exist.
We have some serious concerns about the quality and accessibility of private post-secondary institutions in this province. We think that the proliferation of private post-secondary institutions has been encouraged by both federal and provincial policies providing training dollars to these institutions and by having policies for student financial assistance which provide indirect subsidies through these institutions by providing grants and loans to students attending them.
[11:30]In terms of accessibility, many students do choose to go to these institutions, even though the programs that they are going to are offered within the public system. I think a large part of that is due to the marketing of private institutions. There are, as well, some programs that are not offered at public institutions, but I think that can be explained in terms of a lack of funding to create new programs and so on. In terms of accessibility, the education there is obviously
We're very much concerned about private post-secondary institutions in this province and right across the
[ Page 228 ]country. I think it's interesting that just recently in the province of Newfoundland, the government there is undertaking a review of the private post-secondary system in that province, given the high number of institutions that have shut down in the last year. Students have been forced out with no education and often with debts. These institutions that have gone bankrupt don't have the money to repay the fees that they've lost.
E. Lavalle: There are about 1,700 private training institutions in all of Canada, and 1,200 of them are located in British Columbia. Of the 1,200 in British Columbia, about 20 percent are offshore enterprises from Asia, where the recipients of the education are basically Asian students sent here by their parents for a variety of experiences. I don't want to talk about them but for the rest of them, which would enrol about 60,000 students, individuals -- not full-time, but little bits of courses and things. When I say 60,000, I'm talking about a bum in a seat at any particular time.
The problem there is twofold. First of all, many of them represent the unmet demand in the public system. They cannot get into the public system. Either the seats are not available when they need it, or the scheduling
The second part about it is that many of the people and these students have no guarantee of quality. The reason for that is because, in a private institution, you'd only register as any other consumer-oriented business that provides a service. The quality of its commodity is not measured. Only through the process of accreditation
S. Orcherton: Thank you for making the presentation particularly and bringing it to us in a written form as well, so that we can review it in more detail later. And thanks to Mr. Calendino for letting me speak now. I'm required to be in Victoria very, very soon, and I'm going to have to leave. I don't want you to think I'm leaving because I'm not interested in continuing in the process. I've got a couple of questions for you and, first of all, a comment.
One of the things that I've been finding in the course of these hearings -- and I think other board members have been finding, as well -- is that often I find I am in a situation of sort of playing the devil's advocate around this issue. I think that's largely because we've had a very lacklustre response from proponents and supporters of this agreement. There haven't been a lot of corporations lining up to make presentations -- Canadian corporations -- saying that this is a good issue that they wanted to deal with. Hopefully, they will come forward at some juncture and make the case, so that we can have a more balanced perspective in terms of our deliberations.
I'm very interested in your expanding a little bit around this monopoly notion. It hasn't been raised before, at least not to my attention, and I'm very curious, in terms of the education system, what your views are and how that would work, particularly around student loans, around tuition fees. I mean, would we be potentially putting ourselves in the position where international students attending a private facility could argue that a portion of a tuition fee structure that is paid by the state or the province -- in this instance, by the province -- be applied, or should be applied, to their tuition fee?
And I'm wondering. You've made some comments about, you know, a phoenix -- the article, I think, was "Phoenix Rising in British Columbia" -- that would allow a private education institution to set up shop, as it were, and potentially be subsidized by tax dollars in British Columbia. What does that mean, as well, in terms of the student that's coming? Would they be able to access everything that currently is provided for in terms of our education system?
I wonder, as well, what level of consultation has taken place between your organizations and the federal government. We've been told that there have been thousands of consultation opportunities by the federal negotiator. I wonder if you've had opportunities through your national or provincial organizations to make representation on these issues?
I think I'll just leave it at that, given that my time is not long. Hopefully, if I need more information, I'll be able to get in touch with you or find it through your written presentations.
E. Lavalle: Maybe I'll just talk on the question of monopoly and maybe the other ones
On the monopoly provisions, it's
It's done in such a way that if you relax the monopoly, you can't go back to the monopoly. There's not a retrieval. The concept is that you retain the turf that you have. If you have that turf and you surrender it, then you cannot recapture it if you're a government, with regard to
So I guess in terms of the operation of public systems, if you do them on a partnership model, if you surrender them and try
So those who seek some comfort in the monopoly regulation field won't find it, because I think that in one of those tribunals somewhere that are defined in the back of the agreement, either in a state-to-state tribunal or in an investor-state tribunal -- and there are provisions for tribunals to be set up -- somebody will be arguing that there is no monopoly protection, because at the time of the signing of the treaty the monopolies didn't exist.
S. Orcherton: If I can just make it a bit clearer here, one thing I should also say is that my understanding is that the
[ Page 229 ]way this whole process works is that the request for folks to come out came from the Clerk of the committee, not necessarily Mr. Schacter's office. So we should probably clarify that for the record.
So this situation
E. Lavalle: Yes.
S. Orcherton: The government cannot contemplate taking over highway maintenance anymore as an operation of the province. So that's what we're talking about, in terms of what you're
E. Lavalle: Yes.
S. Orcherton: Okay. Good. Thanks for that; that's very helpful.
The Chair: Okay. Our next questioner is Pietro Calendino.
P. Calendino: Thank you, and bon voyage to Steve. Thank you, all three, for the magnificent presentations you've made; I thank Maura in particular for her comments on tuition fees. I think they're appropriate, and that was the intent of the tuition fees in this province. I totally concur with your comments on that.
I have questions for all three of you. Perhaps I'll start with one that seemed to point out some inconsistencies to me, and that is the question of exclusion or reservations for education. I'll start with Ed.
Ed, you said that your position would be to have a complete carve-out for culture, and under culture you included education. Unfortunately, the federal government does not include education under culture; they put it into social services. For social services they have only a reservation, and we know that reservations will not last forever. Any future government can lift them. Can you comment on that and how you will approach changing that?
E. Lavalle: Okay, I'll answer that question.
I just want to clarify something. Our staff person, Keith Reynolds
On the question of
P. Calendino: That's exactly my issue. If you leave it under social services as a reservation, it will not have the same standing or long-lasting effect as if you ask for an exclusion or a carve-out.
E. Lavalle: Yes. If there must be an MAI, we think the social services should be part of a carve-out. We think there should be much, much, much greater protection for public goods and services -- services that are provided by government in health, in social assistance and in education.
P. Calendino: I'll go to Robert. Robert, one of your phrases that you made was that education is a provincial jurisdiction, and therefore it does not fall under the MAI provisions. I think we've heard for the last three days that this is an agreement signed by the federal government. Basically everything that we do in this country will be the responsibility of the federal government, including provincial matters. If there were to be a challenge to that, and a successful challenge, then the responsibility would be the federal government's but ultimately would fall onto us.
R. Clift: This is the point of discussion. I don't know
[11:45]But as I've pointed out in the paper and in my oral presentation, despite the fact that education is a provincial matter, there is a great deal of funding that comes from the federal government for post-secondary education. I've mentioned research grants. There is the Canada student loans program. There is funding coming from the employment insurance fund to provide training to adult learners and retraining. And even if all of education was not subject to the MAI because this would be beyond the power of the federal government, any funding the federal government would provide for educational purposes would be affected. So
[ Page 230 ]although the worst of what we might anticipate may not come to be, significant portions of it would come to be. With respect to the universities, the research funding is significant.
P. Calendino: The other item
What's happening with the private donations there is that they're not just paid in to the board of directors to do what they please; they're directed at certain departments and certain chairs. What happens with them is that those departments or those chairs promote certain ideology which is now, we understand from Susan George, at the basis of this MAI agreement that's going around with the OECD countries.
Now, in British Columbia, yeah, we have private corporations, but they have to donate to the board at this time. Unfortunately, however, if you go to Simon Fraser downtown campus, you still see names of corporations above the names of classrooms. I don't know whether that has had an effect on board policies or individual programs. Can you comment on that?
M. Parte: Sure. I guess at this time we don't know to what extent it's had an effect on influencing curriculum per se within classrooms in British Columbia. I wouldn't say at this point that it has, because unlike other provinces the board of governors still does have a certain amount of control and is, you know, more publicly accountable. Information is more available than in other jurisdictions as to what's happening with the moneys that are available.
I think there are some concerns raised in institutions. You probably heard about the recent funding of the journalism graduate program at the University of British Columbia from the Sing Tao newspaper company and MacMillan Bloedel being involved in the forestry department at the University of British Columbia. There are certainly some questions around some of those arrangements, but there haven't been any specific examples of a direct influence on what the learning practices are to date.
P. Calendino: But given all these corporate donations that the universities are now accepting, will that not open post-secondary education to a challenge under the MAI, Robert? It definitely breaks the monopoly that you were talking about.
R. Clift: Well, it breaks the monopoly to the
I think that with the issue of private corporations being involved in the funding of institutions, the more difficult question -- the one we don't address in our paper; I know Maura addressed it slightly -- is the whole issue of procurement. Universities are agencies independent of government; that matter's been decided by the Supreme Court. However, despite that independence, there appears to be anticipation that if a significant amount of public funding goes to the universities, they would have to operate under the same procurement rules as would the government.
For instance, where a private corporation may be able to make agreements with other corporations to its benefit, the universities would no longer be in a position to do so. That gets to Maura's point that once you've made these initial donations and you've invited this participation, it no longer
P. Calendino: One last question to all of you -- okay? I heard some inconsistencies in your position toward the MAI. Ed said that we should have carve-out for certain sectors; Maura said we should have a total pullout from the negotiations and Robert said: "We have no position." Now, if I were the minister responsible for the MAI, would I take you seriously if you can't agree among yourselves?
M. Parte: I'll respond first. Okay, I think there actually probably is a high level of agreement between us. I think where it starts is the degrees to which what we want
But, you know, in the event that that's not going to happen and we are proceeding in these negotiations, in order to offer the best protection for post-secondary education, as Ed pointed out, it would be the carve-out. Then, you know, second to that would be a reservation. So it's kind of like this is the best-case scenario. We're obviously going to work to try and have the agreement reflect the goals of what we want the most, but we may have to settle for less. We don't want to, but we may have to.
E. Lavalle: Our views are identical with those expressed by Maura on that question. I could have come on behalf of our organization and said, "The MAI is threatening; it shouldn't go ahead" -- full stop. But unfortunately, boycotts leave you voiceless if there in fact is a process by which such an agreement gets constructed. So I would prefer to say that I don't think that the MAI -- and I had that discussion with Ms. Stephens -- is serving our interest and that therefore we shouldn't go forward with it. However, if it does go forward, there are a couple of important things to faculty and students and the general public in the area of post-secondary education that should be protected, and the best way to protect them is by a total carve-out. And if the federal government insists on leaving culture and post-secondary in two separate baskets, then the reservation won't work in and of itself.
R. Clift: We have not taken a position on it, frankly, because we've come to this issue late. We have to have a
[ Page 231 ]process of discussion amongst our membership. There's lots of anxiety. Part of the problem is that -- and this relates back to an earlier question about the federal government and its opportunities for consultation -- no one in the federal government ever came to our national organization and said: "Well, you know, you guys could be affected by this. This might affect research funding; this might affect student assistance." The spring meeting of our national organization, the Canadian Association of University Teachers, was the first time we broached this on a national level. Provincially we actually had no intention to be involved in these discussions, because, frankly, we were ignorant of the effects of the deal, and we assumed that it would have no effect on universities. It was only two months ago, receiving some invitation from the provincial government to start discussing and thinking about these matters in preparation for coming to these hearings, that we committed time to doing this analysis.
At this point, this is probably the only detailed substantive analysis on the effect on at least the universities that there is in the country, and our national organization will now be advancing this. This links back to the federal government's treatment in the whole thing and its commitment to consultation. If it was genuinely committed to wanting to know what Canadians thought about this, I think it would have said, "By the way, we think this is going to be affected," in each of the sectors. They would have given that information to us and sent us off, and we would have done these things much earlier.
Whether we will ever finally take a position, I don't know. These things tend to be outside the scope of our interest in British Columbia -- our specific interest -- but certainly, as we've indicated, the general interest to the post-secondary sector is profound.
Deputy Chair: On Monday, when we started these hearings, I described myself as a lowly, ignorant politician, and certainly after five days of testimony I have no reason to change that self-description. One of the things that I think is clear to everybody who started to look at the issues around the MAI is the complexity of them. In the testimony that we have had this week, there has been a lot of testimony involving words like "could possibly have the effect of," or "has the potential to," or "there's speculation." I think one of the challenges that we have as a committee is not only trying to separate out the fact from the speculation but also trying to deal with the speculation in a real way, to get some real answers and to find out whether some of the fears that organizations and individuals have about the effects of the MAI are in fact founded.
To each of you, as individuals who have taken the time to look at the agreement in its draft form, if you were in our shoes, who in Canada would you rely on for that kind of expertise to try and sift out what is or is not in it? Who do you see as the authorities in Canada on the subject?
E. Lavalle: That's an interesting question. On international trade law it's very, very complicated. The fact that you say "could have the effect of
Anyway, if I were going for some expertise on this, I think I'd do what you're doing. There are interest groups in the country; they do have views. I know that a couple of people in the Canadian Labour Congress have written an excellent document on the MAI called "Dismantling Democracy." But if you want more formal academic or professional input from people who actually trade, you know, there are trade lawyers. I know there's one whose stuff I've read called Appleton. He's been very good on NAFTA, and he's been very good on some environmental law issues, and he's started to write on this stuff.
M. Parte: I think what you've pointed out is kind of the vagueness and inaccessibility of the document and the agreement itself. It's very unfortunate that democratically elected representatives within this country are pushing forward on this agreement when you yourselves have admitted that you've been sitting here for days and are still finding it very complex. That's why this process is so important: because this has a potential to impact so many aspects of our everyday life as citizens. We would hope that there is time taken for hearing from the experts and making information more accessible -- from the experts to citizens of this country -- so informed decisions on this can be made.
Deputy Chair: If I can just rephrase my question slightly. You obviously have expectations of us as elected representatives in the province of B.C. As we sift through this process, who would you expect us to rely on when it comes to finding answers to these questions on your behalf or on behalf of the citizens of British Columbia?
M. Parte: I think that through this process in itself you're having presentations from each of the sectors that will be affected and the so-called experts within those sectors. Obviously our organization has been involved in a greater campaign around this issue, trying to make information more available to students on campuses. Specific names
R. Clift: As for specific sources, I couldn't tell you. In an attempt to try to break through what appeared to be rhetoric around this agreement, our approach was to go to the document itself. What does the document say? How does it exist within the framework of international law, to the extent that we're able to understand that? As Ed has already pointed out, the document is very vague, so we've relied on a few
[12:00]You asked the question: if I was in your shoes
[ Page 232 ]This is a piece of legislation that only has one court of appeal. We have three or four different levels of testing legislation in this country through legal routes: provincial court, provincial appeal court -- actually federal appeal court -- and then the federal Supreme Court, where we can test these things and refine them. There are opportunities for legislators to go back, then, and make the necessary revisions. This document doesn't seem to anticipate that.
If I were in your shoes as a lawmaker, I would look at this as a piece of law and say: "You know, this doesn't look so good." If I was the Member of Parliament that had to administer this law and take the heat for it -- I guess it would be in the international sense -- I certainly wouldn't want to be that Member of Parliament.
M. Parte: Just to add to that, I think it might be worthwhile, as well, to go back and seriously undertake a review of the North American Free Tree Agreement and the impact that has had on education, public services, the loss of jobs in our country and everything else. Before we move forward and look at signing any more international investment and trade agreements, we should really take stock of the damage that has been done already through the signing of other agreements in the past.
E. Gillespie: Thank you very much -- once again this has been a very interesting set of presentations.
There are a couple of statements I want to make, and perhaps the first one is just in terms of maybe trying to be a bit provocative, but it's also based on what you said in particular, Maura -- that perhaps we should be looking at a different way of taxing in this country, in order to provide the support for public institutions that we consider to be important.
We already have a high level of business investment in universities in terms of research grants, chairs and that sort of thing, and that could in some way be considered to be a grant. The multilateral agreement on investment is an agreement that requires governments to do certain things or provide certain securities and does not speak to the investors themselves -- the actions of the investors. Could you see, in some way, a positive effect of private investment in public institutions that could in some way
My second question relates to a conversation we had a couple of nights ago on culture, where one of the presenters said: "We have a Canadian culture; it is a culture that is recognized internationally; we need not put a box around it. As a matter of fact, that's how we will stifle and kill Canadian culture -- put a box around it -- but we need to support it." I see education and health care in very much the same respect -- not put a box around it but celebrate and support it.
Robert, you mentioned that we do have responsibilities with respect to education under international development, not educational imperialism. I'm interested in your comments on that.
R. Clift: Part of the difficulty
The OECD is by no means bereft of post-secondary opportunities. The type of educational imperialism that we seem to be experiencing now, with respect to Canadian institutions going into developing economies, for the most part
This is not why universities were created. Universities were created to support the development of Canada. We have now matured to the point that we're able to support the development elsewhere in the world, but at the same time that outward-looking view has come into conflict with the need for additional funding. In that way we're starting to become private enterprises operating abroad. That troubles me. It also troubles me with respect to the whole research issue. If there are commercial developments that could come out of university research, that's a good thing. That benefits the economy; it benefits the country. When your raison d'être becomes to seek out that commercialization, we get to the point I was making earlier: we are now losing the point of academic excellence and academic inquiry for the sake of inquiry in favour of a directed private purpose. That's the debate you're having about the nature of public enterprises as we move into the next century and as government has constraints on it that it wishes to operate within.
E. Lavalle: I wonder if I might make a comment on this. I think the core issue here is protectionism -- okay? -- because really what the MAI talks about is liberalization. Protectionism isn't an ideological conception; it's a tool. As un-left-wing types as W.A.C. Bennett converted to protectionism in order to protect water resources and hydroelectric power in this province. John A. Macdonald sought to develop the country by protecting a single monopoly railway for the time. It's a tool that is used for development. Therefore the answer is
I would submit to you that we have some things to protect in this country, that in a global sense if a great nation like France, with its terribly long traditions, cannot protect its own cinema, its own language and even its own recreation parks -- if you've been to "Le Disneyland" -- maybe there is something to protect. When you can find something to protect, you use the tools. But use the tools that are appropriate for the level and condition of what you want to do.
[ Page 233 ]I would say that post-secondary education is basically a utility. It's a utility that in a democratic society you want to share equally. Find the best way to do that, and then you may want protectionism. Obviously, from our paper, we say that these should be protected categories, but the debate is open. We don't take a particular position on trade liberalization; nor do we take a particular position on protectionism. We say that if we're going to have these debates over there in the area of post-secondary education and culture, we need protectionism, because the outcomes of not having it are not to be preferred over the outcomes of having it -- that is protectionism in post-secondary education and culture.
M. Parte: Just to respond to your concerns raised about how we regulate private funding, currently there are no policies on a provincial level that regulate corporate involvement in our universities or colleges or set out guidelines for how donations can be made and what level of involvement there can be in the institution once those donations are made. Even at the institutional level, governing boards are very reluctant to establish guidelines which would lay out clear direction for prohibiting the involvement of industry or corporations in the running of the institution.
Obviously, if donations are going to be made, you want to make sure that there's no impact on the budget or policy-making decisions of that institution. Unfortunately, that is not the case. When corporations are making donations, they obviously want some strings attached. And because there's a lack of policy on a provincial level, if an institution -- say, the University of Victoria -- stands up and goes, "Well, no, you can make a donation, but we're not going to put your names on the door," it's very easy for those corporations to go: "Well, fine, we'll just go over to UBC and Simon Fraser, because they will." So, obviously, donations with no strings attached
L. Stephens: The statement that I have is primarily one to get on the record. I don't have a question of our presenters, but I do have a question ready for the panel. One of the remarks today
The Chair: Thank you.
E. Lavalle: May I say something? If that was an inference from what I said, I did not refer to any letter. I received no letter, if that's what you're referring to. I do have a recollection of contacting the Ministry of Employment and Investment to get a copy of the B.C. government's submission, but all dealings on getting an invitation to this committee came from the staff of the Clerk and the committee -- all scheduling and the appearances and things like that. I don't want that inference to be drawn from my statement, because it is unequivocally untrue. I have just consulted with Keith, and we received no letter from the ministry. I have no knowledge of any letter, and I did not refer to a letter. I don't want the main issue to be diverted by an inference about what I said, because I did not say that.
L. Stephens: Thank you. I believe that you did refer to a letter. Mr. Orcherton asked you that specific question. Since then, you have clarified by your statement that in fact there isn't. I thank you for that, and my concern has been answered.
R. Clift: If I may, as well
Deputy Chair: Just to clarify that, you're referring to James Hansen -- the other Hansen.
R. Clift: Oh, sorry. Yes, James Hansen of the Clerk's office, not Mr. Colin Hansen.
M. Parte: Just for the record, the same is true for our organization as well. We've dealt directly with James Hansen in scheduling and called him directly to set up a time for us to present.
[12:15]The Chair: That concludes our questions. I would, however, like -- because I didn't put myself on the list of questioners, often having an opportunity to wrap up myself -- to deal a little bit not only with the process but, I guess, with your involvement in the process as expert witnesses.
I know the question has come up in different ways from other questioners with respect to either credentials or recommendations. I think Mr. Hansen, my Deputy Chair, asked the question -- and I truly will paraphrase, not to put words in your mouth: what experts should we listen to? The process in this hearing has been both to identify and to encourage a debate not only with the negotiators and the representatives of government but also with trade lawyers and those that make their living dealing with such things as investment agreements and trade agreements. Mr. Appleton made himself available to the committee, as did a gentleman who is a trade lawyer and past president of the Canadian Chamber of Commerce. I will have beg the indulgence of the committee to help me with his name.
[ Page 234 ]A Voice: Milos Barutciski.
The Chair: Milos Barutciski. You see, it's Freudian; I can't pronounce it, so I didn't remember it.
I think that the committee has strived, in inviting expert witnesses, to bring not only a balance -- and we've regretted the fact that institutions such as the Fraser Institute have not availed themselves of the invitation -- but beyond balance in perspectives and points of view, a balance from non-governmental community organizations as well as institutions, both locally and nationally, to get a true perspective. We would argue this is the work that should be done not only at the provincial level but at the national level, in understanding not only the debate at a national or international level, a debate that has been conducted by the experts -- namely, the trade lawyers
I thank you for providing the committee and the people of this province with your perspectives on your institutions and the communities that you represent. You've raised a number of significant concerns. You can be assured that this committee, where you have questions, will further those questions to the chief negotiator and to the minister responsible. The committee is interested in those answers as well. Where the federal negotiator was unable to answer our questions with respect to provincial rights and the jurisdiction that the province is responsible for, including education, you can be assured that we will draw on your expertise in helping to guide us in ensuring that those interests are dealt with.
Thank you to the panel, committee members and all interested parties. This portion of the expert-witness hearings is drawing to a conclusion. We will meet again in Victoria on the 8th and 9th and on the 14th and 15th. The committee's inquiry will be made available on the web site, and there will be an interim report. Thank you all for your help.
The committee adjourned at 12:19 p.m.
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