LEXPERT MAGAZINE
|
NOVEMBER/DECEMBER 2016 71
| INVESTOR-STATE DISPUTES |
"e US government remains concerned
about the discriminatory broadcasting
policies that exist in Canada," Gibson
says. Indeed, pressure from the US could
well have factored into the CRTC's deci-
sion earlier this year to put an end to Su-
per Bowl "simulcasting." e new policy
finally allowed Canadian viewers watching
the Super Bowl on US channels to see the
preferential tax treatment to Canadian
magazines. e WTO ruled in favour of
the US, noting that Canada had "admit-
ted that the objective and structure of the
tax [was] to insulate Canadian magazines
from competition in the advertising sector,
thus leaving significant Canadian advertis-
ing revenues for the production of editorial
material created for the Canadian market."
More recently, Canada took another
hit from the WTO, albeit not in the cul-
tural industry sector. e dispute found its
origins in Ontario's FIT Program, which
allowed renewable energy producers to
lock into fixed-price electricity contracts
at premium rates. Eligibility for the pro-
gram, however, depended on the use of lo-
cally produced materials. Japan and the EU
complained. In 2013, the WTO Appellate
body found that FIT violated Canada's
WTO obligations by treating imported
goods less favourably than domestic goods.
Canada is also the most sued country un-
der NAFTA. Investors have brought some
35 claims against Canada compared to the
20 brought against the United States. Even
Mexico, the original target of NAFTA's in-
vestment-protection provisions, has faced
only 22 cases. Canada has lost or settled six
claims and paid out some $170 million in
damages; Mexico has lost five at a cost of
$204 million; the US has never lost.
According to some observers, Canada's
history, seen in the current economic cli-
mate, portends even more protectionist
measures here. "e environment is very
different from 25 years ago when free trade
was all the rage," says Brenda Swick of
Dickinson Wright LLP in Toronto. "ere
are strong populist trends to protecting lo-
cal production, workers and the environ-
ment, and it would be naïve to think that
we're not going to see more government ac-
tion in support."
Swick points to Alberta's recent subsidy
for its own beer producers, which she says
could "well be offside" international trade
and investment agreements. Others ques-
tion whether BC's recent surtax on for-
eign buyers of residential properties will
survive international scrutiny. "I think it's
very conceivable that we could start seeing
challenges under many BITs as Canada
embarks on a path of introducing protec-
tionist measures under the Liberal admin-
istration," Swick says.
highly vaunted half-time commercials that
had been denied them for years — all in the
name of protecting advertising revenue for
Canadian broadcasters.
Canada's cultural protectionism hasn't
fared well at the WTO either. In the late
'90s, the US filed a WTO claim alleg-
ing that Canada had violated the General
Agreement on Tariffs and Trade by giving
MILOS BARUTCISKI
>
BENNETT JONES LLP
"The government has a habit of trying to squeeze
something, whether it relates to jobs, or language rights,
or R&D commitments, from the foreign investor just
before closing. So we end up shooting ourselves in the foot
by leaving a sour taste that has the flavour of a banana
republic in the mouths of foreign investors."
NAGUIB SAWIRIS,
ORASCOM TELECOM
PHOTO:
REUTERS
