Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs

Issue 16 - Evidence

OTTAWA, Thursday, June 6, 1996

The Standing Senate Committee on Legal and Constitutional Affairs met this day at 10:00 a.m. to consider Bill C-28, respecting certain agreements concerning the redevelopment and operation of Terminals 1 and 2 at Lester B. Pearson International Airport.

Senator Sharon Carstairs (Chair) in the Chair.


The Chair: Honourable senators, I should like to extend a warm welcome this morning to the Minister of Justice, the Honourable Allan Rock. We will begin with a presentation from the minister. Mr. Rock, please proceed.

The Honourable Allan Rock, Minister of Justice and Attorney General of Canada: Madam Chair, this is the third time I have appeared before this committee in relation to legislation dealing with the Pearson Airport agreements. The first occasion was almost two years ago when I appeared to testify in relation to what was then Bill C-22.

At that time, I expressed the unqualified opinion as the legal advisor for the government that Bill C-22 as enacted by the House of Commons was valid, constitutional legislation. It was consistent with the legislative authority of Parliament. It was compliant with the Charter of Rights and Freedoms and with the Bill of Rights.


As you know, it was referred back to the House of Commons with some provisions that were not acceptable to the House. Therefore, the bill was sent back to the Senate in its original version.

At the prorogation of Parliament last February, the bill died on the Order Paper.


Bill C-28 was sent to the Senate by the House of Commons after Parliament resumed this spring. Once again, it reflects the policy and the approach embodied in the initial legislation of two years ago.

In the meantime, of course, there have been hearings of this committee and debate and discussion in the Senate itself with respect to the terms and provisions of the original legislation. As a result, the government has become well aware of the specific elements of the legislation with which some honourable senators take issue.

First, we are well aware that the focus of this committee's work and, indeed, the focus of the objections expressed by some honourable senators to the bill are based on legal and constitutional concerns. Time and again, senators have emphasized that while they do not agree with the policy of the legislation, they respect the right of the House of Commons to determine that policy. Senators have also made it clear that the entitlement to compensation or the amount of compensation to be awarded is a matter of complete disinterest to them and is up to the court to determine.

I understand and respect the nature of this committee's concern with respect to both constitutional and legal matters. Therefore, I propose to focus in my presentation on those subjects, Madam Chair. I hope to demonstrate that the government is prepared to amend the bill to meet every one of the constitutional and legal issues raised by some honourable senators.

Let me come to some of the specific and direct constitutional and legal concerns that must be addressed. I believe it was Senator Lynch-Staunton who detailed the concerns most succinctly when he spoke on the original Bill C-22 in the Senate on October 5, 1994. He said:

Simply put, the denial of access to the courts, the declaration that contracts are not only cancelled but never even existed and the absolute discretion given to the minister to determine what, if any, damages caused by the cancellation are owed to the aggrieved party, are provisions which no legislator has ever dared put before the Parliament of Canada. They go against one of the most fundamental principles on which this country was founded...

That principle is the rule of law.

Last April 30, just a few weeks ago, Senator Lynch-Staunton again spoke to express his concerns with the bill. On that occasion, he said:

With Bill C-28, the Government of Canada is asking the Parliament of Canada to absolve it of a responsibility which it has already recognized following two judgments. Bill C-28 would do this by declaring null and void agreements which the government, by its own admission, has agreed and admits that it has breached, and also would do this by withdrawing access to the courts and its remedies to a plaintiff when access has already been granted under the constitutional guarantee of the rule of law, and by the acceptance of the judgment by the Government of Canada.


Today, I don't intend to argue over the position of Senator Lynch-Staunton. I would however draw your attention to the fact that various legal experts stated before this committee that they did not agree with the position of Senator Lynch-Staunton. Nevertheless, I have not come here today to debate those questions.


Rather, I am here to demonstrate that we are meeting and addressing the issues that the senator has raised.

First, I should like to deal with the question that Parliament would declare the agreements as never having existed. Clauses 3, 4 and 5 of the bill, which declare the agreements not to have come into force, would be amended under our proposal to declare that the agreements have no legal effect after December 15, 1993. That day is the date on which possession of the airport was to have been transferred pursuant to the impugned agreements. That date is also subsequent both to the day on which the court found repudiation had occurred, December 3, and the date upon which the court found that repudiation had been accepted, December 13.

As to access to the courts, clauses 7 and 8, which bar access, would be amended to allow legal proceedings to be instituted. This would resolve the second of Senator Lynch-Staunton's three concerns as stated in the Senate.


The two other objections would be dealt with by the two other amendments I referred to earlier.


In relation to clauses 9 and 10 of Bill C-28, which bars all compensation and gives the Minister of Transport sole discretion to make such payments as he considers appropriate, we would support an amendment that would remove those clauses entirely. I believe that addresses directly the third and last of the original objections expressed by Senator Lynch-Staunton.

Turning to the issue of what remedies are recoverable in court, the government is prepared to support an amendment that would permit recovery but stipulate those heads of damages that may be awarded in a court proceeding, exercising Parliament's authority to define the kind of damages that can be recovered. In particular, the amendment that we would support would make it clear that no award of damages should be made, for example, for lost profits or to recover fees paid to lobbyists.

In my respectful view, no serious argument can be made based on the Constitution or the rule of law about the validity of legislation that simply specifies the criteria that the courts should use in determining entitlement to damages, so long as there is an independent adjudication. I believe that all the experts who appeared before this committee acknowledged that it was within the authority of Parliament to provide guidelines or to define categories in which damages might be awarded. That is exactly what would be achieved by the amendments that the government is prepared to support.


Let me talk to you for a few minutes about the evidence given by Mr. Patrick Monahan, professor at Osgoode Hall Law School, who appeared before this committee on more than one occasion to talk about the constitutionality of some provisions of Bill C-22.

At the time of his last appearance, most of the amendments I have just referred to had already been submitted to the committee. Even though those changes were deemed satisfactory by most witnesses who have appeared before the committee, Mr. Monahan still has some reservations, particularly with regard to two points.


The first had to do with the imposition of June 30, 1994, as a cut-off date by which claims had to have been submitted in order to be considered. Although I had proposed various changes that would permit claims to be made after June 30, Mr. Monahan maintained his objection for reasons he explained to the committee. Without in any way expressing agreement with the analysis underlying Mr. Monahan's objection, I can tell the committee that the government is prepared to agree to an amendment that would eliminate the June 30 date and thereby eliminate any notion of cut-off for the making of claims.

The second objection that Mr. Monahan expressed related to the clause in the amended Bill C-22 barring awards of non- compensatory, punitive, exemplary or aggravated damages. It appears, at least from my reading of the transcript, Madam Chair, that Mr. Monahan's objection was based on his understanding that in the absence of those types of damages being available, plaintiffs who sue and establish liability for defamation would be left effectively without a remedy, beyond the satisfaction of having cleared one's name. On that point, I respectfully disagree. Indeed, research demonstrates that almost all successful actions for defamation result in awards of general damages for loss of reputation. Such damages would not be prohibited by the proposed legislation.

Taking Mr. Monahan's position as a whole, I note that in his testimony of May 23, 1995 before the committee he conceded that the government can impose limits on recovery. He had no difficulty with the theory of clause 8 of the proposed bill as he would suggest it be amended. Indeed, he testified that if the June 30 cut-off date were dropped and the ban on punitive, exemplary, aggravated and non-compensatory damages were removed, he would say that the bill was constitutional.

Honourable senators, we propose to remove the cut-off date of June 30. As to the nature of the damages recoverable, I say that Mr. Monahan's concern about denying plaintiffs in actions for defamation an effective remedy is simply without foundation.

I suggest that the changes we propose in the amendments that the government is prepared to support address each and every one of the legal and constitutional issues raised by honourable senators and the experts who have appeared before the committee. I therefore commend the legislation to the committee, with the amendments that the government is happy to propose and support.

I would be delighted to answer any questions that honourable senators might have.

Senator Lynch-Staunton: Mr. Rock, I am flattered that you should quote me to bolster your arguments with regard to tabling your amendments. However, I take no credit for whatever I said. They are concerns which are shared by many both in and out of this chamber. I am reassured that you are addressing the concerns of senators and others in the activities arising from your department. I hope you will use the same principle with respect to other concerns that we have addressed recently on certain activities in which your department has been involved.

That being said, I wish to share with you something that has been troubling me for some time, that is, the propriety of Parliament legislating a bill which, if passed, will change the conduct of a court hearing which has already taken place. I can understand the argument that Parliament can set the rules before a trial starts. We have heard arguments here that Parliament can alter a verdict once a trial is over and is dissatisfied with the verdict. However, Bill C-28 is aimed at changing the rules once a trial has started.

I am not aware of any precedents for this. That is to say, I am not aware of any legislation covering matters already before the court to the point that they will have a direct influence on the nature of the decision, if not the outcome. In this case, what makes it more troubling is that the party which is asking for these changes to the rules is also a defendant in the case.

There might be an argument for Parliament to intervene during a trial in which the government or Parliament has no direct interest. However, in this case, the government is also a defendant. Having been involved in a trial since mid-February, it is asking Parliament to change the rules, in effect, to favour the defendant.

I question the propriety of Parliament doing that. I would like your views on that point, Mr. Minister.

Mr. Rock: First, as a matter of chronology, senator, one might think, to hear you describe it, that the action had been commenced before the government proposed legislative action. The order of events is exactly the opposite.

The events occurred in December, 1993. The legislation was tabled in the House of Commons in April, 1994. It was given third reading on June 16, 1994. It then came to the Senate in June, 1994 for first and second reading and was sent to committee in July.

The action was commenced the following September. The action was commenced in the context in which the government had already made a policy decision and had tabled legislation to act on that policy decision, legislation which in its initial form would have barred access to the courts completely and left compensation in the discretion of a minister. Therefore, it is not as though an action was started and had progressed before we introduced the legislation. The chronology is quite the opposite.

Let me address a broader point, Madam Chair, which is the supremacy of Parliament and the role of government in connection with policy in the public interest. You speak, senator, as though this is an action which involves private interests. You speak of the government as a party defendant which is doing something in its interest. I emphasize that the government is not a private interest. The government is not simply just a party to the action. This government is acting in the public interest. Parliament must act for the public.

In this action, we are facing a claim of between $600 million and $700 million brought by people who allege that they lost profits on the transaction which, for policy reasons, this government set aside. We are acting very much in the interests of the public and the taxpayers, who will be expected to pick up the tab for that $600 million or $700 million if it were to be awarded by the courts. This is not a private interest in just any lawsuit; this is an action against the taxpayers of Canada for between $600 million and $700 million.

By introducing this legislation, the government is following through on a policy decision made long before the litigation was commenced. You see in that litigation government lawyers defending against claims brought against the public purse. In this legislation, with its proposed amendments, the complainants will have access to the court, but only to recover certain kinds of damages. I see nothing repugnant about any of that in the chronology that has unfolded.

Senator Lynch-Staunton: I do not see why the nature of the case justifies the bill. It is a claim for a large amount of money, following a very controversial agreement which was cancelled unilaterally. That is one thing.

However, the question goes beyond the nature of the case. The question is: Can the Parliament of Canada, particularly when the Government of Canada is a party to the case - and I am not identifying the government as a private party - while the case is in progress and the trial is proceeding, ask Parliament to establish guidelines and rules which would favour the government and, in effect, give instructions to the judge? Those instructions are, "You have been proceeding to date along established guidelines which have been known and accepted over the years; but in this particular case we do not like those guidelines. Therefore, we want to tell you that Parliament has decided on our advice as a defendant," or a plaintiff, "that you have to follow this rule before coming to a judgment."

Mr. Rock: As a matter of law, constitutionality or the legal powers of government, I think the answer to your question is a clear "yes". I go beyond that to address the colourful context you have created to say that it is not that way at all. This action was commenced in a context in which all the parties knew that the government had introduced legislation to say, "There is no access to the court and no damages for anybody. If you get anything, it is up to the minister to decide how much." They then commenced their action. It is not as though they commenced it without knowing that that was the position of the government.

Even apart from that, as a matter of law, senator, I answer your question this way: Yes; Parliament does have that authority.

Senator Lynch-Staunton: Where do you find that authority?

Mr. Rock: Where is there anywhere written any suggestion that the sovereign power of Parliament to enact legislation is in any way limited or made conditional simply by someone commencing an action in the courts? If the Parliament of Canada sees fit to enact legislation defining or specifying the categories of recovery available at suit in the court, which your experts have said before this committee it can do, then why is that power limited or removed simply because an action has already been commenced?

Senator Lynch-Staunton: Your argument is that, because the government had already declared an intention, that by itself was practically an edict?

Mr. Rock: My response to your question is, yes, the Parliament of Canada has the lawful power to pass legislation of this kind, even when a case is pending before the courts. That is my answer. Then I go beyond my answer to address the context which you create in your question, that we are a party litigant and that we are changing the rules after the litigation has commenced. I simply point out parenthetically that the chronology establishes that we made clear our policy decision first and then the litigation was commenced.

Senator Lynch-Staunton: However, the policy decision you made and declared via Bill C-22 is totally different than what is before us today with your amendments. At that time, you declared that there would be no court action; the contracts are null and void; any action taken prior to the passage of Bill C-22 is dismissed; and only the minister can take final decisions.

All of that will be scrapped if these amendments are passed. The intentions declared when Bill C-22 was announced are no longer there. Reluctantly or not, the government has now accepted court action, the validity of the contracts up until December 15, 1993, and damages with certain exceptions, which is a totally different policy than what was announced in early 1994.

I do not see the relevance of Bill C-22, and even Bill C-28 which repeats Bill C-22, since we were told by Senator Kirby - and this was confirmed by you today and by Senator Bryden a few days ago - that the government intends to, in effect, throw out its original intention via Bills C-22 and C-28 and to bring in a new bill through a series of amendments to Bill C-28. The intent at the time is no longer valid. It no longer exists.

Mr. Rock: I am no longer entirely certain of your question.

Senator Lynch-Staunton: My question is: How can you claim that the government's policy announcement of two years ago is still relevant when you have just told us in your opening statement that, in effect, you are changing that policy?

Mr. Rock: Let me go back to "first principles first". As a matter of law, in my respectful view, there is nothing out there that limits, reduces or negates the power of Parliament to enact this legislation either as originally proposed or as proposed to be amended by the amendments that I said the government will support. That is point number one.

Second, the mere fact that litigation is pending does not limit, reduce or negate the power of Parliament to pass this legislation either in the original form or in the form as we propose it to be amended.

You have raised another issue, that there is some substantial difference between the position we take now as a government and the policy decision of 1993. I suggest the fundamental principle is the same, namely, that taxpayers should not be at risk of a claim for hundreds of millions of dollars arising from this transaction; that legislation should limit recovery.

Initially, we said legislation should limit recovery to compensation to be determined by the minister. We now say there should be access to the courts for limited ranges of damage awards. However, the principle is the same. Because we want to get this legislation into place and move on, we have made changes which we do not think are legally or constitutionally necessary but which do address concerns raised by some honourable senators.

Rather than compartmentalizing it, the simple answer to your question is that there is no legal impediment to Parliament acting because the litigation is pending.

Senator Bryden: Mr. Minister, I have several questions which arise out of the proceedings that have gone on before this committee. In your opinion, what is the meaning of "the rule of law" as stated in the preamble to the Canadian Charter of Rights and Freedoms where it states:

Whereas Canada is founded upon principles that recognize the supremacy of God and the rule of law:

Am I correct in assuming that the rule of law includes all of the laws that, from time to time, govern the people of this nation including the Constitution, the common law as developed and changed over the years, the statute laws of Parliament and the legislatures depending on their area of responsibility, and the regulations and ancillary rules flowing from that statute law?

Finally, does it include the application and interpretation of that body of laws in a consistent and unbiased manner by an independent judiciary and, in some cases, by administrative tribunals and processes?

I give you my guess at what I believe is included in that. What is your concept of the rule of law as it appears in the preamble of the Charter?

Mr. Rock: Senator, I would be happy to accept the definition which you have just given for "the rule of law." It may be possible to elaborate on it, but I think it is an excellent summary of what is intended by that phrase as used in our constitutional document.

When people say that this legislation is "contrary to the rule of law," I think they are fundamentally in error. It is an exercise of the rule of law.

It would abrogate the rule of law if the government were to simply announce that there will be no compensation, that no action can be brought, that the contract is at an end, and that no further steps could be taken. That would be an abrogation of the rule of law; but it is an exercise of the rule of law for the government to put that legislation before the House of Commons, to have debate on it, a vote on it, to enact it and send it to the Senate and ask that the Senate debate and support it. That is an exercise of the rule of law. It is within the legislative authority of Parliament. It is an exercise of the sovereignty of Parliament and it is an example of passing a statute which regulates the affairs of citizens, as you have described it. I accept the definition that you have given and I say that this legislation falls well within that definition.

Senator Bryden: My next question touches on a matter which has been an issue before, and I am sure it will continue to be. Does the exclusion of non-compensatory, punitive, exemplary or aggravated damages from the heads of damage in the amended clause 8(2)(e) of this bill violate the rule of law?

Mr. Rock: In my view, it does not. I do not know of any expert appearing before this committee who has said that it was not within the lawful authority of Parliament to limit the categories or kinds of recovery that parties could seek in court. There are examples in both provincial and federal legislation that do just that. So, no, I say it is not at all an abrogation of the rule of law.

The only person who expressed any concern about it in particular was Professor Monahan, as I said in my opening statement. I dealt with the concern he raised. As I read the transcript, he seemed to be saying that actions for defamation necessarily include such damages and to prohibit them would be to leave a plaintiff in such a proceeding without an effective remedy beyond a victory in principle in clearing that person's name.

To that, I respond that research demonstrates that recovery in such actions regularly involves general damages for loss of reputation, which are not prohibited. The single most common and most sought remedy in actions for defamation would still be available to plaintiffs in such cases and are not affected by this clause. I say Professor Monahan's concerns in that regard are without foundation.

It is not contrary to the rule law to limit the nature of the recovery and it is entirely consistent with the government's policy that people should recoup their out-of-pocket expenditures and nothing beyond that point.

Senator Jessiman: What we are really considering today is Bill C-28, which is drafted word-for-word the same as Bill C-22. I note that you have a stamp on there saying it complies with the Bill of Rights and the Charter, and that was the case for Bill C-22. I assume that stamp has your approval, or was put there on your instructions or under your authority.

Mr. Rock: Yes.

Senator Jessiman: I can perhaps understand why you did it with respect to Bill C-22, but you have read, as have most of us here, all the testimony that says that Bill C-22, which is now Bill C-28, is contrary to the Bill of Rights. With respect to Bill C-22 - and I will ask you this question regarding Bill C-28 - you did not say, "Notwithstanding the Bill of Rights, we are passing Bill C-28."

Mr. Rock: There was no need to.

Senator Jessiman: Whether you needed to or not, you did not.

Mr. Rock: We did not because there was no need to.

Senator Jessiman: So the answer is you did not. However, out of all the experts we have heard from, only one - and he was an expert engaged by the government to give it an opinion - said that the supremacy of Parliament was above the Bill of Rights and the Charter and that this bill complied. You are a member of the Bar, as I am a member of the Bar, and the Canadian Bar Association came here representing 34,000 or 37,000 lawyers in Canada, and they said that Bill C-22 - and I say Bill C-28 as well - was unconstitutional. How can you now say it is constitutional? I can understand how you may have been able to say so previously, but are you depending on that one opinion only and saying all these other people are wrong?

Mr. Rock: No, senator, nor do I arrive at constitutional opinions by counting heads. I arrive at constitutional opinions by looking at the law, by considering what the constitutional documents say, by reading and considering the jurisprudence that has interpreted those powers, and then by applying those principles to the legislation under consideration. It was my opinion in April of 1994, and it remains my opinion today, that Bill C-22, and Bill C-28, in their initial form, are entirely constitutional, and entirely valid.

Senator, I have read the opinions of the persons to whom you have referred, and I say, without an ounce of arrogance, I do not agree with them. I also acknowledge that it is impossible to be absolute or categorical - it is impossible for them and it is impossible for me - because the last say on constitutionality lies with the Supreme Court of Canada.

Senator Jessiman: Why would you not allow the courts to rule?

Mr. Rock: There is no need, in my respectful view.

Senator, I looked at the arguments. I dealt with many of them on June 24, 1994, when I was first before this committee. I reread my transcript of that appearance before I came here today. I was asked about the Bill of Rights on that occasion. I pointed out the reasons why, in my view, the Bill of Rights has no application, or if it did have application, why its provisions were respected, because a procedure is in place to safeguard the interests that are contemplated by that bill.

I also answered questions about the rule of law, as that phrase appears in the Constitution. I looked also at the question of the distribution of legislative authority and the principle of when Parliament can deny access to the courts. None of that, in my respectful view, need be changed in light of the evidence you have had from other witnesses. I simply disagree with them.

If we are going to get into the business of measuring the weight to be given to the evidence of witnesses based on who retained them, then I think we should look carefully at in whose interests those people act who came here to quarrel with the constitutionality of that legislation.

Senator Jessiman: As I understand, there was only one, Mr. Monahan, who was engaged by the other side. All of the others were independent persons who were just interested in the law. The Canadian Bar Association did not come here on behalf of anyone except the Canadian Bar Association. You and I both know that; is that not correct?

Mr. Rock: The Canadian Bar Association did not, but you referred to Professor MacKay as someone retained by the government. If we are going to talk about who retained whom, there were a lot of other people retained by particular interests.

Senator Jessiman: There was only one.

You know the wording with which you must comply:

Every law of Canada shall, unless it is expressly declared by an Act of Parliament that it shall operate notwithstanding the Canadian Bill of Rights, -

- and you have not put that in -

- be so construed and applied as not to abrogate, abridge or infringe or to authorize the abrogation, abridgement or infringement of any of the rights or freedoms herein recognized and declared, and in particular, no law of Canada shall be construed or applied so as to

(e) deprive a person of the right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations;

That word "person" has been interpreted by the courts to include corporations; you know that.

Mr. Rock: Yes.

Senator Jessiman: The original bill as drafted, which is now Bill C-28, makes the government the prosecutor, the judge and the jury, and says to these litigants, "If you do not take what we offer you, whatever that might be up to a certain figure, you get zero." Do you say that complies with that principle? Are you not depriving a person of a right to a fair hearing when you say, "You cannot go to court. These agreements do not exist"?

Mr. Rock: Senator, that is what we used to call in my former occupation a jury speech. It is always fun to deliver but I am afraid at the end of the jury speech you have to sit down and look at the facts and the law to determine whether the flights of oratory are justified. In my respectful view, they are not, because these are the facts and this is the law: First, we are not here this morning talking about Bill C-22 or Bill C-28 in its original form.

Senator Jessiman: Yes, sir, we are. That is why we are here.

Mr. Rock: We are also here in the context in which I have said that we are prepared to support amendments that would change the legislation in material respects.

Let us go back and talk about the old bill.

Senator Jessiman: I would like something cleared up. When Senator Kirby spoke in the Senate chamber, he said:

...the government would clearly prefer to have Bill C-28 passed in its current form. Point one, full stop. That is the government's clear preference.

I have not said that we will introduce amendments. I said, categorically, that we would introduce them, if you insisted on them.

You have said today that your government is prepared to propose and support amendments. Would you clarify that for us? Is it the government's intention to move these amendments?

Mr. Rock: I think that is up to the Government House Leader in the Senate. I am telling you what we are prepared to support. As to who proposes them, I will leave it up to the House Leader in the Senate.

Let me come back to your question about the Bill of Rights, and let me remind you of what I said in June of 1994 when this issue was raised.

First, the Bill of Rights is not a constitutional document, as you know. It is a guide to interpretation. Second, the courts, which have interpreted the Bill of Rights in the many years since it has been on the books, have made it clear that the "fair hearing" to which you refer is afforded through the parliamentary process, that the kind of due process which is mandated by the Bill of Rights is provided by the very procedure in which we are engaged today. So let me make a jury speech, senator.

Senator Jessiman: You are the judge and the jury, so you might as well talk to yourself.

Mr. Rock: In this instance, you are the jury.

The fact of the matter is that when the Bill of Rights requires that before any such step is taken there be a fair hearing afforded, the courts have made it clear that that is satisfied. When legislation is put before Parliament; when elected representatives debate that legislation and vote on it; when that vote gives rise to a bill which is then sent to the Senate for consideration by its committee; and when senators then debate and vote on that legislation and take into account all of the interests sought to be protected by the Bill of Rights, that is the fair hearing that is guaranteed by that statute. That is the procedure process that assures that Canadians' rights are guaranteed when legislation is enacted. We have fully complied with those requirements in Bill C-22 and Bill C-28. We are engaged in a fair hearing.

Senator Jessiman: Your own words earlier - and I wish I could repeat them to you - indicated to me that Bills C-28 and C-22 as drafted, unamended, do not comply with the rule of law.

Mr. Rock: That is not right.

Senator Jessiman: I will read back your testimony from today.

Mr. Rock: I quoted from Senator Lynch-Staunton making that decision. I said that I am not here to debate him; I disagree with him. I pointed out that there were many experts before this committee who also felt the same. I am confident that Bills C-22 and C-28, as enacted by the House, are valid and constitutional.

Senator Jessiman: I listened to you and I also listened to you before when we were talking about the lawsuit. You had lost the first round and you were going to appeal. I said to you that in the event that you lose in the Court of Appeal of Ontario, would you consider applying to the Supreme Court of Canada for leave. As you have done so today, you eloquently replied that, "Of course, we are going to win the appeal." You know what happened to that appeal to the Court of Appeal of Ontario.

Mr. Rock: The appeal did not deal with the constitutional aspect of Bill C-22.

Senator Jessiman: I am just suggesting that you may also be wrong.

Mr. Rock: That has been well established.

Senator Jessiman: If the court was of the opinion that the action of this government toward these plaintiffs was such that it was deserving of exemplary, aggravated or punitive damages, then why is the government so concerned? It is not the other side determining this matter, it is the judiciary, one branch of our government. You have the executive and legislative branches, now you are taking over the judiciary. When did that happen? You know the rule when the defendant's conduct is such to merit punishment. If the government's conduct, in the court's opinion, merits punishment or more money for its conduct, then why are you so concerned?

Mr. Rock: My concern is for the taxpayer.

Senator Jessiman: But you have acted badly.

Mr. Rock: The principle and policy of this legislation is to permit recovery of the dollars laid out by those persons involved in this transaction. That is the principle.

Senator Jessiman: For your conduct.

Mr. Rock: The fact is that punitive, exemplary, aggravated and non-pecuniary damages usually take the form of money awarded by the court, not for out-of-pocket expenses by the claimant. It is a windfall to the claimant. The principle and the philosophy of this legislation is: access to the courts is permitted so that persons who have laid out dollars will recover them and so that the taxpayer will not have to pay anything beyond that.

While we are back to jury speeches, I wish to remind you that these are parties who took part in an action that was closed in the shadow of an election.

Senator Lynch-Staunton: Oh, come on!

Mr. Rock: We are speaking to juries here, senator, are we not?

This was done in the context of an election. These parties went forward with a transaction where questions were raised and they were asked to leave the closing until after the election. Notwithstanding that, and in the face of a commitment by the Liberal Party, should it be elected, to review and set the contract aside, they went ahead. Those are the people who want to have punitive windfalls. I say that the taxpayers should not have to pay for it. That is why it is contained in the legislation.

Senator Jessiman: Punitive damages are awarded to make an example to deter others from committing the same tort. They want the next government and the one after that not to do what you are doing with this bill.

Mr. Rock: I hope it will never again occur that parties will go ahead and close a transaction on which questions have been raised days before an election, knowing that the party vying for office had committed to set it aside if elected. I would hope that would never happen again.


Senator Beaudoin: Mr. Minister, I want to ask you a question on clause 8. One of the exclusions in clause 8 relates to investments.

There hasn't been much talk about that as yet. Yesterday, Mr. James McIlroy appeared before this committee and he stated that Canada is bound by NAFTA. It is an international treaty. The word "investment" is described under article 1139 of this agreement in a legally broad and liberal manner.

He believes that if clause 8(2)(d) remains as it is now, it might be concluded that Canada doesn't live up to its commitments under NAFTA.

We've already heard this argument. Since it was brought up again and we heard some experts on this, I wondered if your amendment as proposed and as drafted would not be in conflict with an international treaty to which Canada is a signatory.

What is the impact of the exclusion as well as the impact on the international scene?


Mr. Rock: As I understood Mr. McIlroy's presentation, he was taking the position that what has occurred here constitutes an expropriation. Therefore, it is caught by NAFTA. NAFTA requires that certain compensation be available on expropriation by government. As I understand his testimony, that was substantially his point.

Senator Beaudoin: You disagree that it is a question of expropriation. The fact is that if this bill is adopted as amended, it will bind all Canadian citizens and may also bind American or Mexican investors. They would be precluded from claiming damages for their investments. It is not that clear-cut.

There may be two points of view, but, prima facie, there is certainly something in that argument that must be considered. Since it is a legal question, I ask that question of the Minister of Justice. You may ask the question to another minister, but as far as legality is concerned, it falls under the purview of the Minister of Justice.

Mr. Rock: I am happy to answer it. I know Mr. Jim McIlroy. He is a good lawyer. He trained at my law firm in Toronto. I did not read his testimony, but I had a summary of it presented to me. On this point, I must disagree with him.

His observation was that this constitutes an expropriation and, therefore, certain rights arise for an American, a participant in the consortium, who, under NAFTA, should be entitled to compensation.

Let me make the following points as to why I disagree with that interpretation: First, an expropriation by its very nature requires a government to take something. That is what expropriation is about. No such taking occurred in this instance. Indeed, the very court that we were talking about earlier, in response to Senator Jessiman's question, made the finding that on December 3, 1993, there was a repudiation of this agreement and on December 13 the other parties accepted that repudiation.

This is not an instance in which the interests of the party were taken by government. The interests came to an end by reason of principles of domestic law governing contract, so expropriation does not arise. It was quite independent of government's legislative initiative and indeed the court, in a subsequent judgment, declared that the plaintiffs no longer had any registrable interests in the land because their interest was entirely extinguished with the acceptance of the repudiation. So the condition precedent does not exist; namely an expropriation.

However, even if there was an expropriation, and let us assume there was for the sake of argument, neither the Free Trade Agreement nor NAFTA affects this event because in December of 1993, NAFTA had not come into effect. It came into effect on January 1, 1994. All the relevant events took place before NAFTA came into effect.

Obviously, the Free Trade Agreement does not regulate Bill C-28 because that has long since been dead. In any event, even assuming again an expropriation, which I say did not take place, compensation by international arbitral tribunals in such circumstances rarely, if ever, involves the award of future lost speculative profits. For all of those reasons, there is no foundation to the suggestion that NAFTA or any other international accord is engaged and that Mr. McIlroy's client or anyone else is being deprived of entitlements under such treaties.

Senator Beaudoin: So in your opinion it would have no application in that precise case?

Mr. Rock: There is no expropriation and NAFTA was not in effect, in any event, at the time the events took place.

Senator MacDonald: Mr. Minister, there is, as we all know, established procedure in Parliament whereby if a bill - in this case Bill C-22 - dies because of prorogation, within a certain length of time it can be revived and taken up at the exact stage where it was left at the time of prorogation. It enables the House of Commons to skip first reading, second reading, committee, report stage and passage, and the Senate to pick it up at the same stage it was before prorogation.

The only difference between Bill C-22 and Bill C-28 is the number. Clause 9 of the unamended bill which we have before us states that no one is entitled to any compensation. I am curious to know why, when the bill was given second reading in the Senate, Senator Kirby spent a great deal of time explaining all the amendments which it is intended will be proposed.

Also, when the bill was referred to this committee again, the clerk sent us a message, before our first meeting, which stated: "Please find enclosed a copy of the amendments to Bill C-28 to be proposed by the Liberal senators." You are now before us explaining these amendments but saying, in answer to some of our concerns, that we should not worry, we have access to the courts for general damages. I will not talk about any of the other restrictions.

You used the words "material respects." Yet, in answer to Senator Lynch-Staunton, you said "no substantive difference." Is there not a substantive difference? If there is, why did you not bring in a new bill?

Mr. Rock: As I stated at the outset, it is now two years since my first of three appearances before this committee on this matter. This bill is well known to senators. It has been debated for some time in great detail. A great deal of evidence has been heard. When Parliament prorogued, the process, which had taken almost two years to get to the stage it had reached, came to an end. By the procedure you have described - the motion to reinstate when Parliament resumed - we were able to go back to where we were and to go forward from there.

Why would we let an artificial event like the prorogation of Parliament and its procedural consequences require us to repeat a process in the House of Commons when we can simply take up from where we left off? We all know the issues and the concerns. We now have proposed amendments to deal with those concerns and we can go on from there. In the interests of the public and getting on with the business of government, it seems to us appropriate to do that.

Senator MacDonald: I can understand your impatience. I suggest that you are rushing the fences a bit and that there is a material difference between Bill C-22 and Bill C-28. Your department prepared these amendments some time ago.

Mr. Rock: The House of Commons will have every opportunity, senator, if and when they receive it, to consider the amended bill. As I understand the process of Parliament, at which I am not long experienced, that is what will occur. If this committee and the entire Senate accept amendments to the bill, it will go back to the house for acceptance. The house will have the opportunity to consider the bill as amended.

As to whether it is materially different, I guess that is in the eye of the beholder. My earlier point was that we started off with legislation which was intended to achieve the purpose of protecting the taxpayer from claims arising from these contracts. We are still in that position. We have proposed changes which would allow access to the courts for defined purposes, but the fundamental principle remains the same.

Senator Doyle: Welcome, Mr. Minister. You were discussing just a few minutes ago the reasons the government has chosen to act in this manner. You repeated several times the words "supremacy of Parliament". You said that the government is not a private interest. You said that we are talking about $600 million and that in that matter the government is acting for the public; that the government's action is on behalf of the taxpayers.

Six hundred million dollars is a lot of money, but what minimum would be required to have this kind of unexpected action taken by Parliament with a dollar value attached to it? You attached $600 million, saying it was an amount you could not afford and that you had to act on behalf of the taxpayer. Would the minimum amount be $300 million; would it be $2?

I am getting to a question of principle. At what point does a light go on and you say, "That will do more harm to taxpayers than it will do good to the justice system to leave things as they are"?

Mr. Rock: The policy decision to proceed with this legislation was not based on the amount of dollars for which we would be sued. It was a policy decision that, in the circumstances of this contract, actions ought not to be permitted and, according to the amendments, only certain kinds of damages should be permitted. It was not arrived at by counting up the number of dollars for which we might be sued.

Senator Doyle: It still had a dollar application, though. There was an amount.

Mr. Rock: The plaintiffs are claiming between $600 million and $700 million. That is a fact.

Senator Doyle: That matter is before the courts.

Mr. Rock: Yes.

Senator Doyle: I have here a copy of the House of Commons Debates for May 31 of this year. A question was asked of the Minister of Transport having to do with the anticipated profits of the consortium that was going to produce Pearson airport. It was replied to by Mr. Stan Keyes who is the parliamentary secretary to the Minister of Transport.

He said:

Mr. Speaker, the government is facing a lawsuit in Toronto on this issue. It would be entirely inappropriate for me to comment on the particulars of this case at this time, save to say...

He is invoking again the fact that this is a matter before the courts, not a matter for discussion and that money is at the root of the court action and therefore we cannot talk about it. Yet, we have talked about money and its application here this morning again.

It seems to us, and perhaps we are being overly sensitive, that in all our arguments in these late days of examining this legislation, we are getting an alternative to "Here is a money answer;" or, "No, you can't have an answer because it is before the courts". Yet, you say this morning that it is not a great concern in the way in which it is before the courts because you have given reasons for your actions and they are quite straightforward.

Is Mr. Keyes wrong? Should questions not be asked? Is that not a limitation on what we are doing here?

Mr. Rock: It is a question to which the parliamentary secretary was responding, senator. I was in the House of Commons that day. He sits behind me. The question went something like this: "Here is the evidence before the court based on a report as to what should be awarded as damages, or what the loss of future profits were. What is the government's position on that?" I agree with Mr. Keyes that it is not appropriate for us to get into that aspect of the subject because the matter is before the court, and it is for the court to determine. However, I think that is quite proper.

Senator Doyle: May I read the question? It states:

Mr. Speaker, for the last two years the Liberals' explanation for cancelling the Pearson airport development contract was that the developer's profits would have been excessive. Now the government has admitted that the potential profits were far from excessive. In fact, the Liberals in a court of law are stating -

His question was based on what had been policy for two years. Only as an afterthought does he say that that has been cited in court.

Mr. Rock: I think the parliamentary secretary took the question to invite a comment on the evidence before the court. That is why he said he did not think it was appropriate to comment.

Senator LeBreton: In this exchange in Parliament Mr. Keyes was asked a question by Mr. Gouk about what seems to be conflicting evidence now before the court in Toronto. We went through an inquiry last summer when Messrs Nixon, Goudge and Crosbie were claiming that there would be excessive profits. Justice officials, obviously, were hired to contradict that amount.

Mr. Keyes went on to say at that time:

The government has a responsibility to the Canadian taxpayer to test the validity of that claim. To that end, the government retained the experts who provided the government with the correct advice on the plaintiff's case.

My question is this: Are these officials that you, the Minister of Justice, hired to give the "correct" advice; or were Messrs Goudge, Nixon and Crosbie giving the government's view of what was before the Pearson inquiry?

Mr. Rock: I must say, Madam Chair, I am taken aback somewhat by the line of questioning. I had understood in preparing myself to appear today that the interests of the senators was not in any way on the compensation to be awarded to the claimants. Indeed, the record is replete with references by various honourable senators to just that point. For example, in my preparation for this appearance, for example, I read that Senator Lynch-Staunton said in July, 1994:

I want to say at the outset that our interest in this bill is as the committee chairman has stated. It has nothing to do with compensation itself. We are completely indifferent to whether or not the claimants are entitled to compensation, the amount of compensation, or on what it is based. That is their problem. Our problem is understanding the constitutionality of this bill or some of its clauses -

On July 5, 1994, the same honourable senator said:

One cannot repeat enough that we do not seek compensation for anyone. We have no interest in claims, whatever their nature.

Then, on October 5 of 1994, the honourable senator said:

Can anyone in this chamber, in the other place, or anywhere else for that matter, find one shred of evidence that the Senate's stand on Bill C-22 is prompted by the financial interests of the parties prejudiced by it? How many times must I state that we have no interest in the outcome of the claims, any claims? How many times must I say that we do not support or condemn them; that we are unaware of and indifferent to their validity; and that we have no stake, either personal or political, in how any claim is assessed.

In that context, I am taken aback that there are questions about how much should be awarded to the claimants in this lawsuit, quite apart from the constitutionality and the legality of the legislation which is now before this committee.

Senator LeBreton: With respect, Mr. Minister, you were the one who injected into these discussions the fact that you had to protect the Canadian taxpayer. From the very beginning we have argued on the constitutionality of the legislation. You were the one who brought this matter up. I was simply asking the question: Why is it that the officials under your jurisdiction as minister have given us one stance when we were dealing with the matter before Parliament and the Pearson inquiry and yet another stance when it was before the courts? I am simply quoting what your parliamentary secretary said about "correct advice" on May 31, 1996.

Mr. Rock: Madam Chair, it was as recent as May 15 of this year in the Senate on second reading debate of the bill that Senator Lynch-Staunton said that.

Because figures on compensation had been mentioned, he -

this is referring to Senator Kirby

- assumes, suddenly, that someone is concerned about the level of compensation. That was never the concern.

Let me repeat, I hope for the last time: Whatever the nature of the damages, whatever the amount claimed, whatever the validity of the claims, whatever the arguments to support them, let the consortium take care of itself when it comes to supporting those claims. Our concern is that every Canadian citizen who has a dispute and who wants to get satisfaction and remedy should be allowed to do so before a third party.

Senator LeBreton: Absolutely.

Mr. Rock: I thought it would be crystal-clear that the concern here is not with the amount claimed for compensation, or what the witnesses might say about compensation, or how much will be award.

Senator Grafstein: If anything is to be awarded.

Mr. Rock: That is up to the court. Surely, we are focusing here on constitutional and legal issues, which is why I am somewhat taken aback by this line of questioning.

Senator LeBreton: My question was not about the amount of compensation. My question was: Was it you and your department who hired these people to provide what your parliamentary secretary claims now is the "correct advice" on the plaintiff's case?

Mr. Rock: This has everything to do with compensation. The honourable senator is now asking about the amounts of compensation being claimed or how much they ought to be.

Senator LeBreton: I was asking if it was "correct advice."

Mr. Rock: I was told that that is not a matter of interest to honourable senators.

Senator Doyle: You have been referring through the course of your testimony this morning to certain aspects of the law being known to all the parties concerned on certain dates. What is the status of this bill at the moment? It is not law.

Mr. Rock: No.

Senator Doyle: In other words, law will not flow from Bill C-28 - or however it is known by the time we finally pass it - until it has passed both Houses, been given Royal Assent and, what is more, proclaimed.

Mr. Rock: Yes.

Senator Doyle: Therefore, when we talk about whether this party knew or that party knew what the rules were, they will not really know until the rules have been finalized.

Mr. Rock: This legislation will not become law until it is passed by both Houses and has received Royal Assent and has been proclaimed into force.

Senator Doyle: Therefore, the rules as they applied two years ago are still in effect.

Mr. Rock: I think the reference I made was that the parties may have known about the policy decision taken by government and the intention of government. You are quite right, senator; this bill will not become law until after all of the procedures have been followed. That is the fair process as required by the Bill of Rights.

Senator Grafstein: I have not had an opportunity to carefully examine all the evidence to date, Mr. Minister, but my question is related to the Crown's right in any action which might arise as a result of this legislation. Does this legislation prevent the Crown from claiming costs or counter-claiming against the litigants for excessive claims or nuisance actions? Is the Crown prevented from protecting the taxpayer under this legislation?

Mr. Rock: No, senator.

Senator Lynch-Staunton: I will not repeat what the minister has had me say at least three times. I do want to correct the impression, despite what I said and what he has repeated, that he is giving and the spin he is putting on it. We are not interested in whether the level of profits are justified by the claimant.

What we do not understand is this: The Government of Canada immediately, even before taking office, asked Mr. Nixon to do a review of the contracts. One of the conclusions he reached was that the profits, by his experts' opinion, were excessive. The Nixon report was used to justify Bill C-22. One of the arguments for denying the right to go to court was that, as the minister has repeated, the taxpayers would have been saddled with the possibility of hundreds of millions of dollars in damages to which the claimants were not entitled.

So that was the argument at the time; excessive profits denied them the right to go to court.

That was compounded by the most vitriolic language I have heard from ministers of the Crown, including such things as "the biggest rip-off in Canadian history," and that senators on this side were holding this bill up "to line their friends' pockets." It went on and on.

Today, however, we have a totally different version. We are told by the Minister of Transport's parliamentary secretary that the government has abandoned its claims of excessive profits, claims based on the Nixon report, claims which were repeated during the hearings of Senator MacDonald's committee, claims which were included in the Liberal minority opinion as late as last December. Suddenly we are told that the government has accepted expert advice that, far from excessive profits, there were possible losses of $180 million.

I am not arguing whether one expert or the other is right. I am asking the Minister of Justice: How can you justify Bill C-28, when you now say officially that the profits to justify Bill C-22 are no longer there to justify Bill C-28?

Mr. Rock: I must say, Madam Chair, I am astonished by the preoccupation of the honourable senator with matters of compensation.

Senator Lynch-Staunton: I am not. Do not distort my words, Mr. Minister. I have no interest in the compensation, whether they are entitled to a nickel or to $500 million. I am interested in your justification of the contradiction of claiming for months, if not two years, that the profits were excessive. Whether they were or not is one thing. Now you are officially sanctioning expert advice, commissioned by your department, to the effect that there were no profits. How can you have it both ways?

Mr. Rock: The passages from which I have read, and indeed the record over the last two and a half years makes it perfectly clear that the preoccupation of honourable senators is with constitutional and legal matters.

Senator Lynch-Staunton: I believe that is my question, Mr. Minister. You are running yourself overtime. Just answer my question.

Mr. Rock: It is an answer you may not like, senator, but it is my answer. Compensation is a matter of interest but surely it is beside the constitutional and legal issues on which the honourable senators want to focus.

As to justifying the bill, I remind the honourable senator and the committee that, when the government articulated the policy reasons behind the bill, among other things it referred to the inappropriateness of this sort of privatization of an airport facility and the much better public policy of turning such facilities over to airport authorities, which is indeed what this government has done.

One should not mis-state the policy reasons given by this government for the steps that it took, but surely this preoccupation with compensation is beside the legal and constitutional points.

Senator Lynch-Staunton: Mr. Minister, there is no preoccupation with compensation. You well know there is not. There is a preoccupation by the blatant contradiction in the approach you take to this bill where, for years, you have maintained one thing to justify it and now you deny it and still justify the bill. That is all we are asking.

Mr. Rock: Madam Chair, if we are to get into the area of compensation - and, frankly, I thought we would focus on legal and constitutional matters - the honourable senator will know that there is a highly paid team of experts in Toronto who are prepared to tell the court that the compensation to be awarded should be in the range of $600 million or $700 million. I make that observation. At least someone out there is contending forcefully that that is the range of compensation for the plaintiff. That is before the court and is for the court to decide, but that apparently is the position of at least some of the parties.

I would have thought that the legal and constitutional issues are the ones which ought to be studied here.

Senator Lynch-Staunton: I know you prefer to stay on that ground because you do not like to go on shaky ground and I do not blame you.

The Chair: With the greatest of respect, the Minister of Justice was invited today to speak on the legal and constitutional side of this particular piece of legislation.

Senator Lynch-Staunton: I would be happy to get back to that. I hope that, since this minister does not want to talk about the policy side, we will invite the Minister of Transport or the parliamentary secretary to discuss that side.

The Chair: As you well know, Senator Lynch-Staunton, a letter was sent to the Minister of Transport requesting his attendance before this committee. We have not yet had a reply from the Minister of Transport. There is a steering committee meeting immediately following this meeting to determine any additional witnesses who will be invited.

Senator Lynch-Staunton: To get back to the constitutional issue, Mr. Minister, we may not agree on the propriety or the legality of closing a controversial deal a few days before the election. That is one aspect which we can discuss another time. The point is that you are faced with a legal contract, a contract with which the government is unhappy and which it has therefore decided to cancel. Now the government is facing an action.

We are as concerned, as you are, with whatever costs this may impose on the taxpayers. However, we should be equally if not more concerned with the taxpayers' rights to go to court to file these claims. That goes beyond the cost of the claim itself. If there will be an award made, in whatever amount, it is irrelevant.

The point is that people in Canada feel they have a right to go to a third party to arbitrate a dispute between two contractors or whatever the term may be. That is the main issue.

I know that you have very kindly stayed overtime so I will try to be as succinct as possible, but I am still uncomfortable with the fact that Parliament can intervene in an action which is already taking place before the courts.

I am troubled by that. It may be legal, but I find it irregular, if not improper, particularly when the government at the same time is a defendant, is one of the parties. It is not so much the nature of the case that is disturbing, though that is the argument you have brought up because the taxpayers are exposed to a claim of $600 million. It is the fact that the government, for whatever reasons, with Parliament supporting it, can intervene in an action in which it is a party. As much as the amendments may or may not meet our objections and concerns, I feel very uncomfortable discussing them because, by supporting them - and I hope you will dispel this concern - and endorsing them, I will be party to an action which in effect would also make me an intervenor in a court action. I frankly feel very uncomfortable being called on to do that. I do not understand why these amendments were not brought in before the court action started, despite the intent being known or not known. The court action is underway now. Why did the government not say, "All right, let us hold off. We have to take a chance now. The trial has started and will go on, we do not know how long, but why do we not wait until it is over?" I understand that then the government and the Parliament have an absolute right to intervene to alter, change, amend or challenge the verdict. However, right now we are in the middle of a trial and the government says, "We do not like the rules as they are now, let us change them and give instructions to the judge to act accordingly." That part lies at the basis of my and others' great discomfort with the government's approach at this stage.

Mr. Rock: It sounds like the honourable senator is not prepared to take "yes" for an answer. The passages from his speeches to the Senate to which I referred identified the three principal areas in which he had legal and constitutional concerns. The amendments to which I referred this morning, and which the government is prepared to support, address each of those concerns. They recognize the existence of a contract, they provide access to the courts, and they remove the discretion of the minister to determine solely the question of compensation.

There has never been any quarrel among the experts before this committee about the power of Parliament, once access to the court is permitted, to define or delimit the categories of damages that can be recovered. That is all these amendments do. They act on that acknowledged and recognized jurisdiction.

Honourable senators have identified constitutional and legal concerns. Without saying we accept them, we are prepared to accommodate them through the amendments I have proposed, and now the honourable senator is suggesting that, even though he identified these as recently as April 30 in the Senate in the course of his speeches, there would be some reason why we should not perhaps act on them now. If the honourable senator is prepared to acknowledge that we can properly wait until the court judgment is handed down and then set it aside, surely it can be properly done now before the matter goes to judgment.

As to the question of waiting, this came up in one of my earlier appearances before this committee. I saw it in the transcript that I reread yesterday. Why not wait, I was asked, until the end of the court proceeding before introducing or proceeding with legislation? The answer I gave then still holds today. Why put the parties to the expense and the difficulty, why put the court through the process of adjudicating upon claims, if it is the intention of Parliament to better define that to which the litigants are entitled in that proceeding? I think it is only fair to the parties, considering the money they are going to spend and the time and effort they will devote to this issue, to make clear Parliament's position. That is why I am here today responding to the concerns.

Senator Milne: I am a little confused. Senator Lynch-Staunton says he is uncomfortable because this is before the courts right now. However, if Parliament did not enact legislation because things were before the courts, would that not mean that no legislation would ever be enacted? Something is always before the courts somewhere in Canada, all the time. This is how lawyers make their money. I am concerned about this view.

Senator Lynch-Staunton: I think the answer to that -

The Chair: The minister will answer that question.

Mr. Rock: That is exactly right, senator. Particularly in the area of the criminal law, there will always be cases before the courts, and the system would become sclerotic if we had to take the position that because an issue is before the courts, Parliament cannot act. The system could not work.

Senator Lynch-Staunton: I have one last question for the minister. Parliament is passing laws all the time but they do not affect court decisions in the same way this bill does.

I hope everyone understands that a trial is going on now. We are not taking sides. We are absolutely disinterested in the nature of the proceedings and in whatever decision comes out of it. However, the argument is about loss of profits, lobbying fees, investments, claims for losses and probably damages. Those, I suspect, are parts of the claims before the courts. I assume that loss of profits will be in there as well, now that we have the proposed amendment to clause 8. The government, after four months of trial, is asking Parliament to instruct the judge to ignore all the evidence he has heard so far touching these six items. I say that is highly irregular and improper and I wonder whether I want to be part of it.

Senator Bryden: Is that a question to yourself?

Senator Lynch-Staunton: It is a question to myself, and I am not being helped by the minister in answering it.

Mr. Rock: It is very difficult to help you on that point.

Senator Lynch-Staunton: I know.

Mr. Rock: You have raised concerns about the constitutionality and legality of Bill C-22 and Bill C-28. I have proposed ways that meet every one of your concerns and you have now found some other reason for not supporting the bill, or you seem to be speaking in that way. I say that the concern that you have articulated is without foundation, and I suppose that the honourable senator will have to make up his own mind.

I understood the focus to be on legal and constitutional issues with this bill. I have addressed each of the issues that have been raised and proposed solutions for each of them and, in my respectful submission, complete answers for them. As I say, the senator does not seem to want to take "yes" for an answer.

Senator Jessiman: You gave an explanation or an answer in respect of article 1110, the expropriation compensation under NAFTA. I do not agree with it. However, you were not asked about article 1105, minimum standards of treatment. It reads as follows:

Each Party shall accord to investments of another Party treatment in accordance with international law, including fair and equitable treatment and full protection and security.

Mr. McIlroy said that in addition to violating the NAFTA's expropriation provisions, clause 8 and the proposed amendments to clause 8 of Bill C-28 violate article 1105 of NAFTA because they deprive American investors of due process before an impartial tribunal.

Mr. Rock: First of all, that assumes that NAFTA applies. For reasons I have already given, in answer to Senator Beaudoin's question, NAFTA does not apply. This matter occurred before NAFTA came into effect.

Second, in terms of due process, I have already responded in relation to the Bill of Rights. What we have here is due process. Careful, methodical legislative attention is being paid to proposed government action which would affect the investment. That is due process. Furthermore, the amendments that we propose to this legislation would provide access to the court for some elements of loss that are defined in the legislation.

I also point out that the foreign investors are treated in exactly the same fashion as domestic investors are treated. There is a complete equality between the treatment of the Canadian participants and the foreign participants. For all of those reasons, I say this recent assertion that there is some inconsistency between this legislation and NAFTA ought not to trouble the Senate and is not a basis in law for objecting to this legislation.

The Chair: Thank you, Mr. Minister, for your appearance this morning.

The committee adjourned.

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