Centurion to invoke extraordinary enforcement provisions of NAFTA investment rules to challenge Canadian health care policy and law

Unfair trade practice against American health care companies wanting to enter Canada.

By Melvin J. Howard


After communication with US Federal government officials and intermediaries it was decided that Centurion would file a lawsuit under NAFTA and the WTO trade agreements. This investor state litigation is to bring some uniformity and consistency with provincial health care agencies throughout Canada. With Alberta’s Bill 11 for health care and the recent Supreme Court ruling in Quebec in favor of private health care insurance for residents of that province. As well as a number of provinces contracting out their health services including Public and Private Partnerships. There are serious inconsistencies throughout Canada in terms of the Canada Health Act and Provincial health care programs. Centurion will seek to be compensated for damages for barriers to entry and expropriation. As we have experience in the past even when following provincial guidelines and rules in terms of running private surgical facilities. Municipalities or city officials can and have put up numerous roadblocks such as zoning and by law requirements that is politically motivated instead of merit base. Its like saying yes you can no you can’t in the same sentence i.e. plausible deniability as far as the government is concerned. Centurion thus pursuant will file suit under specific investment services as follows:



· National Treatment (Investment and Services)
· Most Favored-Nation Status (Investment and Services)
· Performance Requirements (Investment)
· Senior Management and Boards of Directors (Investment)
· Local Presence (Services)



Article 1102: National Treatment
1. Each Party shall accord to investors of another Party treatment no less favorable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.

2. The treatment accorded by a Party under paragraphs 1 and 2 means, with respect to a state or province, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that state or province to investors, and to investments of investors, of the Party of which it forms a part.



In other words, Canada must extend the very best treatment it accords its own citizens and companies to US and Mexican investors on a non-discriminatory basis. Article 1202 establishes the same rule for Foreign Service providers. Therefore unless explicitly excluded, National Treatment would require that foreign investors and service providers be given the same rights and opportunities that Canada makes available to domestic health care service providers and investors.



Article 1106: Performance Requirements
1. No Party may impose or enforce any of the following requirements, or enforce any commitment or undertaking, in connection with the establishment, acquisition, expansion, management, conduct or operation of an investment of an investor of a Party or of a non-Party in its territory:
2. to achieve a given level or percentage of domestic content;
3. to purchase, use or accord a preference to goods produced or services provided in its territory, or to purchase goods or services from persons in its territory.
Article 1106 prohibits government regulation that would condition the right to conduct business with obligations to support the local economy.



Article 1110: Expropriation and Compensation
No Party may directly or indirectly nationalize or expropriate an investment of an investor of another Party in its territory or take a measure tantamount to nationalization or expropriation of such an investment ("expropriation"), except:
a. for a public purpose;
b. in a non-discriminatory basis;
c. in accordance with due process of law and Article 1105(1); and
d. on payment of compensation in accordance with paragraphs 2 through 6

Article 1205: Local Presence
No Party may require a service provider of another Party to establish or maintain a representative office or any form of enterprise, or to be resident, in its territory as a condition for the cross-border provision of a service.
Article 1107 imposes similar constraints with respect to the composition and nationalities of Senior Management and the Boards of Directors.



Reservations
No exception for health care is included among the general exceptions to NAFTA set out in Chapter 21. This contrasts with the approach taken for National Security, Taxation and Cultural Industries which are given broad exemption from the application of NAFTA rules. Rather, to protect health care policy and law from trade disciplines, Canada elected to list only certain health care services as reservations, and then only to some of the provisions of Chapters and 11 and 12.



Dispute Settlement
The provisions of Section B of Chapter 11 provide foreign investors with the rights to invoke international dispute resolution processes to enforce their rights under the Chapter. Accordingly, under Articles 1121 and 1122 foreign investors of a NAFTA party have a right to sue national governments for any alleged breach of investor rights they are granted by the trade agreement. The disputes will be decided, by the international arbitration panel under international law and according to procedures established for resolving international commercial disputes. This is just summary of the arguments we will be making at the tribunal.

CENTURION TO CHALLENGE CANADA UNDER NAFTA

IS CANADA FAIR WHEN IT COMES TO HEALTH CARE UNDER NAFTA

BY MELVIN J. HOWARD

NAFTA has been in the news lately because of Presidential elections in the United States. Indeed Canada's federal NDP Leader Jack Layton was in Washington on Monday to press for changes to the North American Free Trade Agreement.

Layton spoke at the 'Take Back America conference, a gathering of activists, elected officials, business owners and policy makers.
He his calling for changes to NAFTA, particularly for new labour and environmental standards. His message was 'let's work together and make trade deals that are sustainable and fair. He further goes on to state the Democrats in the U.S. can count New Democrats in Canada as allies in the vital effort to improve upon NAFTA and help build a modern 21st century North American economy that is prosperous, fair, and sustainable for today's families and future generations."

But is it fair when it comes to open markets for health care in Canada. I am of the opinion it is not for the last 5 years we have spent millions of dollars. Trying to build the largest private surgical center in Canada. The $154,000,000.00 facility was to be state of the art with major partners in the health care field to participate in the administration and financing of the project. We have had major bankers, investors, lawyers from major firms in the US come to Canada to do their due diligence. Not only did we have the financing in place. I also had commitments from top international surgeons to relocate to Canada. Only to jump hurdle after hurdle of governmental red tape, road blocks and stall tactics. The fact that I was American and that an American company was behind the project only made things more frustrating. The fundamentals of the project did not matter the focus was more on I am an American. So this will be an American style health care project. There are key elements of NAFTA that calls for fair treatment when it comes to trade it’s called the national treatment rule. It demands that Canada treats all investors, goods and services from Mexico and the U.S. no less favorably as those from Canada in the same circumstances. For example, if a provincial government required the contracting out of publicly funded surgical services, but only to Canadian -owned private facilities, this would put U.S. service providers and investors at a disadvantage. The second key element is called the expropriation provision it’s included in NAFTA’s Chapter 11 on investment. Section 111 0 states that the Canadian government must provide compensation for any measure expropriating an American or Mexican investment. This provision also applies for any measure that is tantamount to expropriation (or nationalization). If U.S. investors enter the Canadian market during periods of experimentation with private health care insurance or delivery, the expropriation provision means that provinces may find themselves compelled to pay compensation to those investors if the provinces want to remove or restrict the investors right to operate in Canada at a later date. Canada negotiated two exemptions in 1994 to try to protect outside investors from entering the health care market this is discriminatory. After spending thousands of man hours and costly delays. I am announcing on the behalf of my shareholders, my investment bankers, and partners. We are officially challenging Canada under the investor state provisions Chapter 11 of NAFTA. I will not get into specifics here but we have a strong case. At the very least my investors should be compensated for the costly delays and unnecessary red tape. We have a serious trade dispute that has been brewing for sometime I am calling on the tribunal to finally do something about the unfair practice. It seems to me you cannot cherry pick what you want in NAFTA then turnaround and say no you are not allowed to enter this market because it is untouchable. This will be the first challenge under NAFTA when it comes to health care. It is time to address this issue that has been unfair for so long.

Senators Obama and Clinton lets talk about universal health care

Let’s talk US health care

By Melvin J. Howard

Calling on US Presidential candidates Senators Obama and Clinton universal health care for the US is a non starter. Take it from someone who has spent most of his adult life studying the financing of health care globally. I have read all the data for and against a government run health care system. Let me tell you just like a court room drama both sides have their expert witnesses and can show you impressive charts of demographics social and economic trends. Take it from me it does not play out that way on the front lines. There must and I underscore must be a coalition between the private sector and the government in order to include the current population that does not have health coverage. It must be done creatively and take a bi-partisan approach I notice that a lot of so called experts like to compare the US health care system as the big boogie man to the rest of the world. But that’s like comparing apples to oranges the US spent over 2 Trillion Dollars on health care. That is most countries GNP it’s huge. Universal health care for the US is like asking the largest US aircraft carrier to stop on a dime by the way it cannot be done. Turnaround go back to port and load up a additional aircraft carrier ( i.e. the extra bureaucracy that would take to run an all government health system) on top go back to sea and fight the same fight but with the extra baggage. Result it will collapse under its own weight. My door is always open to this important issue if you want to talk. It seems since 1994 every election year Universal Health Care comes up. I vote no to Universal Health Care the US is a free market society it is its founding principals. Besides socialized medicine is not really free remember John Kerry.

The Wall Street Journal

Canada’s “Free” Health Care Has Hidden Costs
By Pierre Lemieux*

John Kerry’s health insurance proposals amount to a “sweeping socialization of [the U.S.] health care system,” writes Michael Cannon, director of health policy studies at the Cato Institute in a recent Daily Commentary on the Cato Web site. Although Mr. Kerry’s proposals do not echo the frequent calls for imitating the Canadian model, they would keep the U.S. heading down that slippery slope. This ought to alarm Americans. The Canadian system is much more costly than advertised because it is highly efficient in hiding costs.

Proponents of the Canadian model praise its universal coverage and its apparent low cost. Total (private and public) health expenditures are only 10% of gross domestic product in Canada, compared to 14% in the U.S. A study published last August in the New England Journal of Medicine claimed that a third of this difference is explained by lower administrative costs in the Canadian system. But, among its other faults, this accounting ignores the hidden economic costs of Canadian health care.

The Canadian system is built around a compulsory public-insurance regime that provides most medical and hospital services free. Of course, it is not free for the taxpayer, who finances the system at a rate of 22% of all taxes raised in Canada. The Canadian government pays about 71% of total Canadian health care expenditures, compared to 44% paid by the government in the U.S. This translates into public health expenditures of 6% of GDP in Canada and 7% in the U.S.—a rather small difference. More than three-quarters of the difference in total expenditures is due to higher private expenditures in the U.S. [see American Health Care: Government, Market Processes and the Public Interest, edited by Roger Feldman]. Why are private health expenditures so low in Canada? The main reason is that they are illegal, which gets us to the heart of the system’s hidden costs.

Canadian public health insurance is not only compulsory, it is also monopolistic. The system is administered by provincial governments under strict guidelines imposed by federal law and federal subsidies. Private insurance covering publicly insured services is illegal. Physicians are forbidden to accept private payments above the fees billed to the government. Hospitals are public or non-profit, and tightly regulated. Physicians’ fees are determined—or “negotiated”—by provincial agencies. Prices of drugs are controlled. In short, the public supply of medical services is rationed, and there is little private alternative. Hence the apparent low cost of the system.

The hidden costs include the poor quality of services, and the costs imposed on customers (aptly called “patients” in this case) who have to wait in queues.
Quality is subjective and can only be evaluated through consumer choices, but the government won’t let consumers make choices and vote with their feet if they are not satisfied. Anecdotal evidence of questionable quality is everywhere. In a recent piece in Montreal’s Gazette, a Canadian related her own experience, and contrasted the “kindness, discretion and professionalism” of staff in U.S. hospitals, with the frequent rudeness of unionized personnel in the Canadian system.

Long waiting lines are a fixture of the system. The Fraser Institute, a Vancouver think tank, has calculated that in 2003, the average waiting time from referral by a general practitioner to actual treatment was more than four months. Waiting times vary among specialties (and, less wildly, among provinces), but remain high even for critical diseases: The shortest median wait is 6.1 weeks for oncology treatment; excluding radiation, which is longer. Extreme cases include more than a year’s median wait for neurosurgery in New Brunswick. The median wait for an MRI is three months. Since 1993, waiting times have increased by 90%.

Waiting lines impose a real cost, which is approximated by what individuals would be willing to pay to avoid them. Waiting costs include health risk, lost time (especially for individuals whose time is most valuable), pain and anguish. Socialist systems are notoriously oblivious to anguish, discomfort, humiliation and other subjective factors which bureaucrats cannot measure or don’t value the same way as the patient does.

A Québec physician, Dr. Jacques Chaoulli, is suing the government for not allowing patients to pay for better care. The Supreme Court of Canada will hear his appeal of lower-court rebuttals in June. Last month, a class-action case was launched against Québec hospitals on behalf of 10,000 breast cancer patients who, since October 1997, have had to wait more than eight weeks each for post-surgery radiation therapy.

Liberalization proposals are met by the “two-tier system” bogey man—that if choice is allowed an unequal system will develop. But if directly paying a doctor is illegal, there are legal ways to jump the queues. As pointed out by Professor Livio Di Matteo of Lakehead University in Ontario, what now exists is a three-tier system. The very rich (like Robert Bourassa, the late Premier of Québec) go to the U.S. for rapid, personalized, high-tech treatments. The second tier is made of “the well informed and aggressive, who can push their way to the front of the treatment line.” The poor and those with no connections get stuck in the queue.

At least two Indian groups are now considering building private clinics or hospitals on their land—just as other sorts of illegal-elsewhere trade thrive on Indian reserves. Yet, Canadians who patronized such clinics would still be prohibited from purchasing private insurance to cover the service, leaving the opportunity only to the wealthiest.

As noted by Harvard professor Patricia Danzon, another hidden cost of the Canadian system comes “from forcing everyone to have the same level and type of insurance,” whatever their individual preferences are.
One last cost should not be ignored: the loss of personal responsibility and the habit of dependence on the state. Opinion polls show that Canadians are generally proud of their public health insurance. Indeed, for most people, any basis for comparison has been made illegal. Auberon Herbert, a libertarian Member of Parliament in late 19th century England wrote, “If government half a century ago had provided us all with dinners and breakfasts, it would be the practice of our orators today to assume the impossibility of our providing for ourselves” [see The Right and Wrong of Compulsion by the State and Other Essays, by Auberon Herbert].

*Pierre Lemieux is a Research Fellow at The Independent Institute in Oakland, Calif., and Co-director of the Economics and Liberty Research Group at the University of Québec in Outaouais, Canada.

CENTURION TO CHANGE DIRECTION

Keeping pace with the ever changing markets Centurion will no longer be principals in health care infrastructure projects. Centurions will seek to achieve its financial objectives primarily by investing in both public and private shares of health related companies.

There are no limitations on the kinds of securities or instruments in which Centurion may trade including distress debt. Consequently, we may cause the Company's assets to be traded in all forms of equity or debt securities, financial instruments or agreements, including but not limited to domestic and foreign preferred and common stock, convertible securities, warrants, rights, bonds, money market instruments, commodities, options and derivative instruments. Such securities may be publicly traded on an exchange, listed in the over-the-counter markets or privately placed with a limited trading market.

What is a Merchant Bank and what will be Centurion's role.

A question I am often asked is, 'What exactly is Merchant Banking' and what will Centurion look like when the restructure is completed. Therefore I felt an overview explanation might be a useful way to answer some of your questions. Keep in mind Centurion’s focus is the health care industry.

Before defining Merchant Banking and it’s origins, probably a good place to start is asking the question; ‘WHEN DID MODERN BANKING AS WE KNOW IT TODAY BEGIN’ ?

Many people still confuse the introduction of currency as the beginning of modern banking, but the two are not connected. Coins were minted for centuries before banking began in England, even the Celts were using coins before the Romans introduced their coinage system in fifty five (55) BC. For the Romans, the magic number of division for coins was Twelve (12), and coins were always issued as a unit of weight, for example the English term pound appeared as Pondus in Latin, Pfund in the Germanic, Pund in Old Norse, and in the Roman Empire, the unit of weight was called a ‘Libra’, which represented Twelve (12) Unciae or ounces.

The principal Roman unit of weight for what we know as a pound, was the Libra, after the small Constellation, 7th sign of the Zodiac or, ‘The Scales or Balance’. Roman coinage was made up of the Solidus (gold) and the Denarius (silver). One Denarius equalled one ounce of silver, and it required 12 Denarius or (12 ounces of Silver) to equal one ounce of gold (i.e.) One Solidus, and 12 Solidus or (12 ounces of gold) to provide sufficient weight to equal One Libra. Britons, after 4 centuries under Roman domination, became so familiar with this economic structure and culture, that the Libra, Solidus and Denarius abbreviated to L.S.D. became shorthand for its system of Pounds, Shillings and Pence, which survived almost 2,000 years.

Conversely on Banking, William the Third of England and Ireland (William of Orange) introduced banking by an Act of Parliament in 1694, William needed to finance his war against France, and he knew raising these monies through taxation would not be popular, so he issued debt instruments in the same way governments today issue treasury bills, and similar, placing them out on the open investment market, and thus was created the Bank of England, (i.e.) ‘The Central Bank of England’. In this manner William raised what was an extraordinary sum of money for the time, One Million Two Hundred Thousand Pounds (GBP 1,200,000.00) and thus started the tradition of government debt. The Bank of England was nationalised in 1946, and the British Government is now it’s chief customer.

MERCHANT BANKING - BY DEFINITION
A FORM OF BANKING WHERE THE BANK ARRANGES CREDIT FINANCING, BUT DOES NOT HOLD THE LOANS IN ITS INVESTMENT PORTFOLIO, TO MATURITY.
Merchant Banking is a fee based business, where the bank assumes Market Risk but no long term Credit Risk. Fundamentally, merchant banks originate commercial loans, and then sell them to investors rather than hold them as portfolio investments. The French term for a Merchant Bank is a ‘Banque d’ Affaire’. Aside from debt financing, Merchant Bankers are involved in Corporate Finance - Venture Capital, (risk capital), where the bank advances capital in exchange for equity in the business, or simply places funds into such risk based ventures. These funds typically come from backers in it’s own portfolio who receive an acceptable equity percentage, the bank making it’s money through a fee based structure.

Note: Merchant banks need to be very careful in getting the right mix of investment in their risk portfolio to avoid financial ruin. For example if the portfolio consists of say US$ 10 million to invest in equity, a fool can recognise, that it is better to spread this equally over say Ten (10) companies, than to get excited and invest the entire portfolio in One (1) company. In London after the October 20 1987 stock market collapse, several merchant banks went bankrupt because they ignored fundamental rules, or did not maintain sufficient cash reserves. The competences of management are vital - one needs to know where to emphasize efforts.

Origins of Merchant Banking - Private Banking
German Financier Meyer Amschel ( 1743-1812 ), founded the Rothschild dynasty when he established the Rothschild banking house in Frankfurt. By the time of his death he had already conducted significant financial transactions for European Governments, and left the business to his five (5) sons who set up branches across western Europe.

Notable amongst the sons was Nathan Meyer ‘Baron de Rothschild’ ( 1777 - 1836 ) who founded Rothschild in London in 1804. During the Napoleonic wars, staff were stationed on the battlefields with homing pigeons, where they swiftly reported the fortunes of the British and French armies, often days before the official dispatches had reached Paris or London. In this manner he was able to intervene in the stock market to great financial success, and in fact upon news of Napoleons defeat by Wellington at Waterloo, he was able to sell vulnerable stocks at their high, and a few days later bought them all back at rock bottom prices. The result from this one battle netted Rothschild GBP 5 million which was an enormous fortune in those days.

Baron Rothschild, had interests in businesses other than banking. In trying to simplify his method of getting paid on transactions overseas, he developed what would become known as the forfaiting system to finance his merchant transactions. Very soon all his merchant friends were asking him to help them finance their merchant transactions through forfaiting, and thus began the birth of Merchant Banking. Today Rothschilds remain official gold broker to the ‘Bank of England’ and the Rothschild’s still make gold bars in the family’s private refinery near the Tower of London. It is known as the Royal Mint Refinery and was once part of Great Britain’s Royal Mint.

Merchant Banking is Conversion of Dreams into Reality with the Help of Money, and where Merchant Banking Is a Vision, Investment Banking is a Technique.
Merchant bankers took audacious risks and made enormous profits, but of all their assets, integrity and common sense were the most important. Character was prized more than wealth, and they would rather suffer loss, than tarnish the good name of the firm by any unworthy act. Eventually, the role of the Merchant banker changed from money lender to modern financier, and the private banker then became the intermediary between lender and borrower.

Merchant banking is not a science it is an abstract art, and merchant bankers are laconic people who rarely say more than Ten percent (10%) of what they think. When the banker is an hereditary merchant banker, they say even less, and the credit of these banks falls from Father to Son, with inherited wealth bringing inherited refinement.

Centurion Health and Regent Hills Health

Attention to all Centurion Health and Regent Hills subscription agreement holders please forward corresponding information to the writer so that it may be included in our audit report.

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