CETA and Irish Housing

CETA and Irish Housing

This blog post is written by the CATU Campaigns Group, which is campaigning against CETA – the EU-Canada Comprehensive Economic and Trade Agreement. The below lies out the case for how CETA might impact housing policy in the country as well as other social concerns.

  1. How will CETA empower Canadian Vulture Funds?

CETA removes trade and tariff barriers for Canadian businesses including Canadian vulture funds. These vulture funds will have an advantage over Irish businesses by virtue of their ability to sue the state through the Investor Court System mechanism (ICS allows private companies to sue the state if legislation, like rent caps, impacts their profit margin). As it tends to be larger corporate entities that make foreign investments it is more likely to be vulture funds than smaller real estate companies from Canada investing here. This will skew the market further towards vulture funds. The more investments these funds have in Ireland the less inclined the Irish government may be to enact legislation, should they lose an ICS lawsuit.

  1. What could it do to housing standards, rent caps, environmental requirements, etc? 

Mechanisms that exist today which are similar to the ICS have been used in the past to sue governments which have tried to protect public health, consumer rights, product quality standards, workers’ rights or environmental standards. It is highly likely, therefore, that should the government decide to introduce legislation which would improve on the minimum standards for a property to be considered habitable they would be liable for damages from Canadian companies in the housing market. Ires Reit, being Ireland’s largest private landlord, is Canadian, along with Irish Life’s owners, which has hundreds of homes in Ireland. This would affect the quality of the buildings, safety standards, utilities and attempts to reduce overcrowding.

The ICS mechanism could also be used to sue for lost profits from legislation surrounding rent caps, improved tenants’ rights in areas such as evictions, protections for tenants who complain to the RTB etc.

  1. How is the Land Development Agency (LDA) involved?

Currently public land that is requisitioned by the LDA, only 10% of it is used for social housing. 20% is supposedly “affordable” in theory but is still in the private market. Any attempt to improve the percentage of social homes or on the level of affordability could very negatively impact Canadian developers, real estate companies, funds etc. Any move towards genuine public housing would hugely affect these businesses. This would mean that they would all have recourse to the ICS mechanisms. 

  1. How will it impact housing budgets?

Investment Court Systems, and similar agreements under different names, have resulted in a ‘chilling effect’ preventing significant changes or investments in public infrastructure and services. 

According to a report from the Irish Council of Trade Unions, “this was the case in New Zealand where the government dropped plans to introduce plain packaging for cigarettes due to fears of litigation.”

“The French multinational Veolia also utilised ISDS/ICS procedures to bring a case against Egypt, seeking some €82 million compensation, following the government’s decision to raise the monthly minimum wage and introduce other labour reforms.”

  1. Will CETA prevent building of public housing?

According to An Taisce’s analysis of healthcare and the environment, yes. They cite the European Public Health Alliance (EPHA) who have expressed fears for the negative impact CETA could have on healthcare. The EPHA warned that via the ICS mechanism, “lifesaving public health measures which could be affected by CETA’s investment chapter include, among other initiatives, minimum pricing of alcohol, food labelling, air pollution restrictions, chemicals legislation and soda/sugar taxes.”

This would no doubt also impact funding towards public housing projects. 

Further Resources:

Public Services International – The EU’s Great Corporate Privilege Rebrand

An Taisce – The National Trust For Ireland – CETA and the Investor Court System – No legal basis or need to have such a court

Seattle 2 Brussels Network – Joint Interpretative Declaration on CETA. Unpacking the “clarifications” on investment protection

Comhlamh – CETA ICS Fact Checker