This is a guest post by Gus Van Harten, professor at the Osgoode Hall Law School and author of Sold Down the Yangtze: Canada's Lopsided Investment Deal with China. This post originally appeared on the Globe and Mail.

For years, Prime Minister Stephen Harper’s government told Canadians that it could not act on climate change until China joined in. Yet, in 2014, the government quietly finalized a 31-year investment treaty that, in essence, gives Chinese oil companies an advance bailout against a range of steps that Canada may need to take on climate change.

Take, for example, the call by more than 100 scientists for limits on oilsands expansion until a serious Canadian plan on climate change is in place. What is a serious plan? The scientists said it would need “to rapidly reduce carbon pollution, safeguard biodiversity, protect human health and respect treaty rights.”

Now, consider Canada’s new Foreign Investment Promotion and Protection Agreement (FIPA) with China. 

The deal gives Chinese companies powerful rights to frustrate even modest steps that reduce the value of their oilsands holdings. That is, if governments in Canada put new limits on the oilsands, they face major liabilities under the FIPA’s system of foreign investor protection. Worse, Canadians cannot know reliably how the FIPA is being used – and whether it is affecting government decisions – because the agreement makes special allowances for confidential settlements with Chinese investors.

On a close study of the FIPA’s terms, a key purpose of the deal was to open Canadian resources to China and to preserve the value of Chinese assets in Canada. In the case of the oilsands, there are already billions of dollars in Chinese-owned assets and expected profits that would be affected by a tougher response on climate change. If China is not on board for how we decide to regulate in Canada, we will have a problem, owing to the FIPA.

Read DeSmog Canada's in-depth interview with Gus Van Harten on the Canada-China FIPA

China-Canada Investment "Straightjacket": FIPA Interview with Trade Investment Lawyer Gus Van Harten

Can we expect FIPA arbitrators to award billions of dollars in compensation to Chinese companies? The short answer is yes. In the past few years, there have been huge awards to oil companies under similar investment deals: $2-billion (U.S.) against Ecuador, $50-billion (U.S.) against Russia.

True, these cases differ from potential disputes about climate change in Canada’s resource sector. But it is not unrealistic to expect FIPA arbitrators to (1) issue compensation orders against Canada, since they’ve done so in various North American free-trade agreement cases already, and (2) order vast amounts to be paid by Canadians, since they’ve done so against other countries, and the amounts reflect the value of the foreign investor’s assets, not the Boy Scoutishness of the condemned country.

At the least, the FIPA has made it more difficult for governments in Canada to take action on climate change, assuming that governments are (usually) careful with billions of dollars in public money. Put differently, the challenging question of how to respond to climate change in the oilsands is a danger zone under the FIPA, because much of the oilsands are Chinese-owned and because the Chinese owners will not take kindly to government interference with their business plans.

You may ask, why would the federal government agree to a FIPA with China that puts an uncertain and uncontrollable price tag on Canada’s options to respond to climate change – and other important issues too? Why would the government move power over our future from Canada’s legislatures, governments, and courts to Chinese investors and FIPA arbitrators?

I think the straightest answer is that Mr. Harper seems to have wanted it that way. If one accepts climate change as a pressing concern, it is hard to imagine a more epic fail than the FIPA.

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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."

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After three days of arguments in the federal court of appeal in the Hupacasath First Nation’ challenge against the Foreign Investment Protection and Promotion Agreement (FIPPA, also known as the Canada-China Investment Treaty) – all that’s left is the waiting.      Beginning Wednesday morning, lawyers for the Hupacasath spent the first day and a half working to establish the threshold at which the Crown’s duty to consult would be triggered.

Lawyer Mark Underhill approached the case from two directions. The first line of argument was what he called the treaty line, which stated that since Aboriginal peoples are granted the right of self-government, the duty to consult is triggered in any instance in which that right is affected, whether the individual nations are part of a treaty with the Canadian government or not.

Like the vast majority of First Nations in British Columbia, the Hupacasath have never signed a treaty with the Canadian government. Regardless, the nation falls into the category of sub-national government, which means that it’s bound by any legal agreement that binds the federal government.

Underhill’s argument hinged upon the fact that the international agreement has an impact on the Canadian government and all of its sub-national governments, which includes First Nations’ governments. The case is not a constitutional challenge to FIPPA itself. Underhill was clear about repeating this point during his closing statements on Friday.

“The argument is, as I hope you now appreciate, that the day after the [Canada-China] FIPPA is ratified, it will amount to a restraint on Aboriginal governance whether exercised through Aboriginal right of self-government or codified in a treaty such that it’s a treaty right of self-government.” There would be a shift in regime, he said, and therefore the duty to consult should have been triggered.

The second strain of the Hupacasath’s argument dealt with the impact ratifying the Canada-China FIPPA would have on the Canadian government’s ability to fulfill its constitutional obligation to protect and accommodate First Nations’ rights and title.      Crown attorneys representing Canada’s Foreign Affairs Minister told the court that this new treaty would in no way impact domestic law, meaning Aboriginal peoples' constitutional rights would in no way be affected. “The treaty does not represent a fetter on the Crown to deal honourably with Aboriginal people,” the Crown attorney told the court.

The Crown argued three main points. The first is the status of FIPPA as an international agreement requiring no change in domestic law. Crown attorney said the links between the FIPPA and domestic law weren’t strong enough to “attract the application of the constitution.”

The second point was that, although the FIPPA doesn’t trigger the Crown’s duty to consult, the international agreement doesn’t absolve the Canadian government from managing land and resources according to its constitutional obligations to First Nations.

The third and crucial point focused on what it called the speculative nature of the application, arguing that there is no direct correlation between ratifying the FIPPA and adverse affects on the Hupacasath.

Chief Justice Paul S. Crampton is expected to make his decision in about a month.

Brenda Sayers of the Hupacasath First Nation says that, win or lose, she’ll continue to spread the word about FIPPA and other legislation that affects all Canadians. “My plan is to make it even bigger,” she said. “My idea from the beginning was to approach the unions because unions have the ability to reach millions of Canadians in a very short period of time.”

She cited what Grand Chief Phil Stewart of the Union of British Columbia Indian Chiefs calls the thin red line, referring to the small number of First Nations people fighting national battles to protect the environment for all Canadians.

“We’re trying to create a new path, a new way of bringing people together and exercising our constitutional right to participate in the formation of Canada, and how can you do that if you have a government that’s not listening to the people of Canada? In fact outright ignoring the people of Canada?”

Image Credit: Photo by Erin Flegg

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After public outcry was ignored and the NDP’s motion to reject the agreement dismissed, the Hupacasath First Nation is the only thing standing between the Harper government and the ratification of its Foreign Investment Protection and Promotion Act (FIPA) treaty with China.

The Hupacasath will be in court June 5-7 when the judge will hear final arguments from both sides. This is the last step in a nine-month long process to stop the Government of Canada from signing a treaty that would give Chinese companies the power to exploit First Nations’ territory without consulting First Nations people. A decision is expected no earlier than a month from the closing arguments.

With support from the Tsawwassen First Nation, the Union of British Columbia Indian Chiefs, the Serpent River First Nation in Ontario and the Chiefs of Ontario, Hupacasath spokesperson Brenda Sayers believes the case is strong.

“I’m feeling very positive that things will fall in our favour. We have a strong argument that we’ve put forth under section 35 of the constitution.”

The tiny nation from the Alberni Valley in BC, caught on to the agreement, signed in secret last September with the intention of ratifying it in November, and filed the court challenge that stalled the process. Last month, NDP MP Don Davies’ motion to refuse to ratify the agreement was voted down in House of Commons. The Hupacasath are now the last line of defence.

“This will affect our natural resources in our traditional territory to a great extent,” Sayers said. “China is the second largest economic power in the world, moving up to number one, and they have the power and the means to come in and buy Canadian companies and extract the resources from our traditional territory.” The terms of FIPA would mean that any attempt on the part of First Nations to protect their land could be seen as interfering with China’s right to profit, thereby triggering legal action against Canada.

The Hupacasath have also reached their goal of making the challenge publicly funded, raising more than $150,000 through a fundraising campaign supported by Leadnow and the Council of Canadians.

“The way that we’ve looked at this from the start is that it’s everybody’s court challenge. It’s everybody’s responsibility to support the work that’s been undertaken by the First Nations,” she said, adding that she’s disappointed that the provincial government still hasn’t stepped in to support its people.

One of the biggest challenges throughout the process has been getting the word out to Canadians and First Nations across the country. With little coverage from major media outlets, she said it has been difficult for the small nation—of less than 300—to reach a national audience.

“I said it from the beginning and I’ll continue saying it: we need the support. We can’t do it alone,” she said. “We need the support of Canada in a large way to end this thing. We need people to show that they’re not in favour of the Canada-China FIPA.”

The Hupacasath are calling for a Unity Gathering, a peaceful gathering of supporters outside the Vancouver Federal Courthouse on June 5, 6 and 7.

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Yesterday hundreds of indigenous and non-indigenous Canadians stood on Parliament Hill in Ottawa to greet the Nishiyuu walkers – a group of First Nations marchers who have gathered along the 1500 kilometre route between Whapmagoostui in Quebec's James Bay Treaty area and the nation's capital.

The youngest walker to speak on behalf of the group was an 11-year old girl who said she was marching on behalf of missing and murdered Aboriginal women in Canada.

Prime Minister Stephen Harper chose to dismiss the event, traveling instead to Toronto's Pearson Airport where he, along with his wife, Toronto Mayor Rob Ford and a high-school band, welcomed two panda bears on loan to Canadian zoos from China.

If the absurdity of the scene seems all too familiar, you may be recalling Rick Mercer's "Pandas and Pipelines" spoof video ad. Pandas and pipelines might be as confusing as hell, but look! A panda!

On the tarmac at the Pearson Airport Harper spoke of the bears as "symbols of peace and friendship with all Canadians." The cuddly creatures have been used to signify friendship between nations for centuries.

“Over the coming years these pandas will help us learn more about one another while serving as a reminder of our deepening relationship, a relationship based on mutual respect and growing collaboration … It is truly an honour to be entrusted with their care,” Harper said. Canada's growing relationship with China, especially in light of the Canada-China Foreign Investment Promotion and Protection Act (FIPPA), has been seen as a direct threat to First Nations constitutionally-protected rights.

This weekend Postmedia's Mike De Souza wrote about the Stephen Harper government's reluctance to disclose information regarding the pandas after an access to information request was filed on the issue. The Office of Information Commissioner Suzanne Legault conducted an investigation into the request after access to certain sections was denied by Environment Canada.

Legault found the request was "inappropriately responded to," according to De Souza. The government redacted the word 'loan' from an internal memo's title, as well as additional references to a 'loan' in the document. These redactions were reversed after Legault's investigation.

Harper's panda diplomacy might be as confusing as hell, but look! A panda!

Image Credit: PMO Image Gallery.

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Last week Foreign Affairs and International Trade Canada announced Canada had "officially joined the latest round of Trans-Pacific Partnership (TPP) trade negotiations" after more than two and a half years of talks by previously engaged nations. The 15th round of talks, involving Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam, wrapped up yesterday in Auckland. 

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hat's the scariest thing happening just after Halloween? Is it the stomachaches our children will have from eating too many sweet treats? No, it’s the Canada-China Foreign Investment Promotion and Protection Agreement (FIPA), which will automatically come into force on November 2nd, binding Canada for 31 years to come.

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