This is from a paper by some Canadian business groups on promoting internal free trade within Canada through reform of Canada's Agreement on Internal Trade:
A more effective and efficient dispute resolution mechanism should include ... a domestic equivalent of investor-state dispute settlement, ... .
Investor-state dispute settlement normally grants foreign investors the right to initiate dispute settlement proceedings against a foreign government. NAFTA contains such a provision, as will CETA once it comes into force. In the internal trade context, a domestic equivalent should at least provide businesses access to dispute resolution under the AIT (and could potentially be opened to individuals or other organizations). Currently, businesses and others must first go through their provincial government to resolve disputes under the AIT before initiating a dispute – an unnecessary and burdensome step.
Their general point seems to be that Canadian businesses should not have to go to their provincial government in order to initiate a dispute against another province related to perceived trade barriers. They should be able to enforce domestic free trade on their own, through a private right of action. The report refers to ISDS, and says there should be a domestic equivalent.
Calling for a private right of action makes sense, but is ISDS the best parallel? I would have thought the better comparison would be to the EU treaties or to U.S. constitutional law, where private actors can go directly to domestic courts where barriers exist. Wouldn't constitutionalizing the process be the most effective way to promote the Canadian "single market," the free movement of goods, services, capital, and labor, and free trade generally? Ad hoc trade panels seem less authoritative to me than constitutional courts.
It has been suggested that direct private action is already possible under Canadian constitutional law, at least for trade in goods, although the relevant provision seems to have been interpreted narrowly and may not work here. Does Canada need a separate process for internal trade disputes, or could the existing constitutional system handle these matters? It may need to be tweaked to cover modern trade issues, and provide for broader trade freedoms, but this might be an easier and more effective approach.
On the other hand, maybe legalizing these issues is too much of a challenge. Perhaps it needs to be more of a political process. If the provinces can agree to work together on issues such as mutual recognition, progress can be made; but if they can't, we are stuck with the existing situation.
