More on Howard`s complaint and its significance

by Randall F. White

Melvin J. Howard wanted to build "the largest privately owned health center in Canada.” According to documents filed with Foreign Affairs and International Trade Canada, he incorporated Regent Hills Health Centre in January 2003 in the province of BC. The original plan involved purchase of 9.5 acres in Vancouver, and he had begun securing financing and undertaken negotiations with the Canadian firms DGBK Architects and Ledcor Construction, Ltd. The scheme involved a Delaware company which would raise funds by selling bonds through Ziegler Capital Markets, a U.S. investment bank specializing in health care financing, "exclusively to American citizens, funds and companies." The loan would have passed through TD Bank in Vancouver, but the money would have flowed from and to the United States.

The Regent Hills Health Centre intended to offer outpatient surgery, laser dentistry, diagnostic imaging, physical and occupational therapy, ambulatory and medical education programs. The 215,000 square-foot building would have housed 14 operating rooms and 110 beds. Nowhere in the documents is a mention of how many physicians and nurses would be needed, how they would be recruited, or any acknowledgment of the peculiarities of health care financing in British Columbia such as the Medical Services Plan.

Howard wanted to open Regent Hills in February 2007, but given the dates on the documents, his plans in Vancouver have been derailed for some time. In the NAFTA complaint, Howard alleges obstruction of permitting by "municipalities or city officials," and loss of deposits on contracts to purchase 5 separate land parcels. Documents suggest he may have shifted his plans to Surrey after Vancouver denied him permission. Furthermore, he mentions "community activist (sic) opposing the private surgical center."

All this indicates that Mr. Howard doesn't give up easily. He is angry, aggrieved, and perhaps grandiose. But according to Todd Grierson-Weiler, Canadian attorney who specializes in NAFTA arbitration, Howard’s submission is amateurish and has little chance of advancing. As for his threat to invoke the General Agreement on Trade in Services, according to Ellen Shaffer of the Center for Policy Analysis on Trade and Health, only the U.S. government could initiate this action against Canada. Unlike NAFTA, the World Trade Organization, which administers GATS, does not permit investor-initiated actions against member states.

So perhaps this is a tempest in a teapot, but dismissing the “NAFTA bogeyman,” as Grierson-Weiler does, fails to acknowledge the crucial lesson. U.S. corporations are not going to give folksy Canadian entrepreneurs a free run. If a market in health care develops in Canada, multinationals like Minneapolis-based United Health International will be at the ready, and for them, NAFTA will be an essential tool.