On November 30, 2006, the Court of Appeal for Ontario dismissed our appeal regarding Chapter 11 provisions in the North American Free Trade Agreement (NAFTA).

The court's decision upholds the unprecedented rights given to corporations under NAFTA. While CUPW is disappointed with the court's decision, we remain committed to resisting unfair and unjust trade rules and are considering seeking leave to appeal to the Supreme Court of Canada.

Background

Under Chapter 11 of NAFTA, foreign corporations can sue the federal government for damages before secretive international tribunals, rather than in domestic courts, if they believe their investments or profits are suffering due to government measures. United Parcel Service (UPS) believes its investments are being hurt by Canada's publicly funded network of mailboxes and post offices. It claims that this network gives our public post office an unfair advantage when delivering courier services that are in competition with private courier services.  UPS is suing Canada under Chapter 11 of NAFTA for $160 million USD ($182 million CAD).

The tribunal that is hearing UPS’s complaint is expected to render a decision by the end of the year or early in 2007

Our constitutional challenge

About five years ago, the CUPW, the Council of Canadians (Council) and the Charter Committee on Poverty Issues (CCPI) launched a constitutional challenge of NAFTA rules at the Ontario Superior Court. We argued these rules are unconstitutional because they undermine our sovereignty and violate both the Charter of Rights and Freedoms and the Bill of Rights.

Ontario Superior Court Justice Sarah Pepall dismissed our challenge in July 2005. In dismissing our case, Justice Pepall acknowledged that NAFTA creates foreign-investor rights that infringe on sovereignty and that are enforced in a way that is neither transparent nor subject to proper review. However, she found that the private enforcement of NAFTA rights was nevertheless constitutional. She said that NAFTA tribunals are concerned with international commitments, not domestic ones. She said that international law and domestic law are distinct legal systems that operate in different spheres. Therefore, constitutional safeguards of judicial independence do not apply to private international tribunals.

The Council, CUPW and CCPI filed an appeal in August 2005. In its recent decision, the Court of Appeal for Ontario agreed with Justice Pepall. The court ruled that since NAFTA tribunals are the product of an international trade agreement, they do not infringe on the jurisdiction of domestic courts.

Unfortunately, the court took a very narrow approach to issues and ignored the larger legal, political and practical consequences of NAFTA rules.

The Court of Appeal also rejected our Charter arguments as premature given that groups were not yet complaining about a specific instance where someone's Charter rights had been violated.

The next step

CUPW, the Council and CCPI have the right to seek leave to appeal to the Supreme Court of Canada. The Supreme Court has the right to grant or deny leave to appeal.

The union will announce its next move once we have met with the Council and CCPI.