Harper Government Ratifies Controversial Canada-China Foreign Investment Deal

The Harper Government ratified the controversial Canada-China Foreign Investment Promotion and Protection Agreement (FIPA) Friday after secretly signing the deal with China in Vladivostok, Russia in September 2012.

The Canadian public has been offered no opportunity to clarify the details of the agreement or discuss its economic or environmental implications even though FIPA is the most significant trade and investment deal in Canada’s history since NAFTA.

The Canada-China FIPA is a bilateral trade agreement intended to protect and promote international trade and foreign investment between nations through legally binding agreements.

Canada has 24 similar trade agreements with other nations including Russia, Argentina and the Czech Republic. The Canada-China FIPA has been widely criticized as lopsided, given China’s significant investment in Canada's economy and natural resources.

Critics expressed concern over FIPA after Prime Minister Stephen Harper approved the $15.1 billion acquisition of Canadian-owned Nexen Inc. by the Chinese National Offshore Oil Company (CNOOC), a state-owned enterprise.

The presence of massive Chinese state-owned investments in Canada have led some to worry over the legal significance of FIPA.

Ed Fast, Minister of International Trade, said trade agreements like FIPA, "provide the protection and confidence Canadian investors need to expand, grow and succeed abroad," in a press statement released today.

“We remain committed to opening new markets around the world for Canadian companies, including in the fast-growing Asia-Pacific region. This FIPA will create jobs and economic opportunities for Canadians in every region of the country.”

Kai Nagata, energy and democracy director for the Dogwood Initiative, a democracy advocacy organization, said this treaty “takes decision-making power away from Canadian citizens, and puts the future of our economy in the hands of China's state-owned corporate behemoths."

“This has serious implications for our democracy, and that's why so many true conservatives are worried,” he said.

In 2012 Dogwood asked 7,000 Conservative donors to share their thoughts on the investment deal. According to Nagata 72 per cent said they would consider withdrawing financial support from the Harper Conservatives if the deal was ratified.

“Today marks a turning point,” Nagata said. “Harper has turned his back on Canadians, including the grassroots members of his own party, simply to save face with the regime in Beijing."

International investment lawyer and trade agreement expert Gus Van Harten told DeSmog Canada in 2012 the Canada-China FIPA essentially threatens Canadian sovereignty.

“What’s really different about the China-Canada investment deal,” he said, “is that it allows disputes about how laws and regulations or even court decisions have been made, to be decided outside of the Canadian courts.”

Under FIPA, disputes that have the potential to affect Chinese investment – whether they concern resource development, environmental law or the rights of Canadians citizens – will be resolved through international arbitration, without the knowledge or input of the Canadian public.

“The China-Canada investment deal and many of these other investment treaties…gives the power, and quite immense power, to the investor to challenge any decision that Canada would make, whether by the Canadian Parliament, or a provincial legislature, by the Supreme Court of Canada or a lower court, or by Cabinet or some low-level government official,” Van Harten said.

“Anything can be challenged by skipping Canadian courts and going straight to these international arbitrators.”

Because of this new legal obligation to protect Chinese investments, critics are worried the concerns of Chinese investors will take precedence over the rights of First Nations in local land and resource disputes, especially considering the presence of Chinese investment in Enbridge’s Northern Gateway pipeline.

The Hupacasath First Nation launched a legal battle against the agreement last June with the support of the Tsawwassen First Nation, the Union of British Columbia Indian Chiefs, the Serpent River First Nation in Ontario and the Chiefs of Ontario.

The Canadian federal court rejected the challenge in August 2013, saying the First Nation had not demonstrated the agreement would have adverse impacts on Aboriginal rights. Brenda Sayers, from the Hupacasath, told the CBC the federal government agreed to “hold off on the ratification until due process took place in court.”

Jamie Biggar, executive director with Leadnow, an independent advocacy organization that promotes participatory decision-making and democracy, told DeSmog Canada the agreement should not be permitted to threaten First Nations’ constitutional rights.

“Today Prime Minister Harper is showing his disrespect for the legal process by ratifying this agreement before the courts have finished reviewing the case,” Biggar said.

"A massive citizen response and the Hupacasath First Nation's legal challenge has delayed ratification of this secretive and extreme investor deal for two years longer than anyone thought possible,” he said.

“Tomorrow there will be a new wave of people working to hold this government accountable at the ballot box in 2015, and undo the damage that it's done."