OTTAWA—An apparent leaked text of Canada’s free-trade deal with the European Union shows Canadian authorities will be subject to possible legal challenges from European-based corporations that believe government decisions in Canada hinder their profit-making ability.

Negotiators put the finishing touches on the deal last week, but Prime Minister Stephen Harper’s government hasn’t said when MPs and the Canadian public will see what Ottawa agreed to with the EU. However, versions of the pact emerged from Europe on Wednesday.

Questions have been raised on both sides of the Atlantic about whether the deal should include an investor-state dispute settlement (ISDS) mechanism, a measure similar to the much-maligned Chapter 11 provisions in NAFTA that allow multinational businesses to go before a special tribunal — rather than regular courts — to sue governments over regulations a corporation believes are discriminatory.

A text released by a German news outlet confirms Canada and the EU have agreed on ISDS measures as part of the so-called Comprehensive Trade and Investment Agreement (CETA). These investor protection clauses are valued by business, but there are mounting concerns in Europe that such measures give corporations too much power and that businesses should rely on the regular court systems in Europe or Canada if they intend to sue governments.

On Wednesday, Shannon Gutoskie, a spokesperson for International Trade Minister Ed Fast, said, “Canada does not comment on leaks of purported negotiating texts.

“We have released comprehensive materials which describe the various elements of the agreement and clearly show the significant benefits that will be generated in every region of Canada upon the agreement’s entry into force.”

With Germany and France raising questions about this issue, trade experts say Canada and the EU may yet have to refine the ISDS provisions in CETA to meet European objections as the final approval process grinds away over the next two years.

Now-emerging details of the pact also show CETA is likely to spark more concern about procurement rules that limit the ability of federal, provincial and municipal governments in Canada to favour local companies on a wide range of construction, supply and service contracts. Dozens of local governments across the country have objected in recent years to being subjected to CETA’s procurement provisions.

And the leaked documents confirm Ottawa has agreed to new rules governing pharmaceutical patents that could eventually drive up the cost Canadians pay for prescription drugs by a total of $850 million or more annually.

“I think this final text shows us that we’ve had every reason to be concerned about procurement and investor-state and certainly other provisions of the deal,” said Brent Patterson, political director of the Council of Canadians.

“We’re not seeing anything here that would alleviate the profound concerns and criticisms that we have of this so-called deal.”

The leak “is really a first chance for the public to be able to scrutinize the deal the way we should have been given the right to do months or years ago,” Patterson said, adding that he expects to see increased opposition to CETA now that details are becoming available.

The Harper government has said CETA, by opening up the huge European market to Canadian business, will provide a long-term boost to Canada’s economy.

Harper, who travelled to Europe last fall to sign a tentative agreement on CETA, is expected to host a Canada-EU summit next month in Ottawa to officially approve the version of the pact that is now entering the final stages of the approval process. But it must be translated, legally vetted and ratified by Canada and the 28-member EU before coming into force. Canadian officials expect that to happen in 2016.

The deal also sets out the creation of Canada-EU committees on topics such as customs co-operation, services and investment, government procurement, financial services, sustainable development and regulatory co-operation to address issues that arise in those areas.

The agreement details how tariffs will be eliminated — some over seven years — and for products like shrimps, frozen cod and wheat, sets out how much will be duty-free during that timeframe.

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By year six of the deal, Canadian producers will be able to export 75,000 tonnes of pork, more than 45,000 tonnes of fresh and frozen beef and veal, and close to 18,000 tonnes of cheese to the EU.

With files from Alex Boutilier

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