Adjournment Proceedings – Foreign Investment

On Thursday, March 7th, 2013 in Adjournment Proceedings

Elizabeth May: Mr. Speaker, I rise this evening in adjournment proceedings to pursue a question I asked of the Prime Minister on November 21, 2012. It related to what we are pursuing in the Canada-China investment treaty, which was, as we know, signed in Vladivostok in September 2012. It was placed before this place for 21 sitting days, in which, unfortunately—I stress unfortunately, because it is rather a weak term for what I regard as a large democracy deficit, and a tragedy—we did not get to debate the Canada-China investment treaty.

It is now sitting before the Privy Council of this country. Most Canadians would take that term to mean the cabinet. At the time it decides to pass an order in council, the Canada-China investment treaty will be legally binding on Canada. Given its difficult provisions, it is very difficult to exit the Canada-China investment treaty compared to NAFTA, for instance, which has a six-month exit clause that can be exercised by any one of the parties: Canada, the U.S. or Mexico.

The Canada-China investment treaty is in effect for a first 15-year period. If a future government wants to exit the treaty, it needs to give a one-year written notice. Any existing investments from the People’s Republic of China within Canada would be further protected for another 15 years after we try to exit the treaty, so it is essentially locking us in for 31 years.

I raised the issue with the Prime Minister on November 21, because he was just back from a trade mission to India. Some of the news reporting at the time had been a little misleading. It suggested that we had a treaty with India on investments and that the Indian parliament was not yet ready to vote on that treaty. The Prime Minister’s response was right. I had taken the newspaper coverage at face value. We do not yet have an investment treaty with India.

Since the time that has elapsed that I could pursue this question in adjournment proceedings, a lot has happened in India on this subject. I am looking forward to the government representative’s response to this. India is taking a very dim view of investment treaties, such as the one that now sits before Privy Council between Canada and the People’s Republic of China. This class of agreements, investor state provisions, do not open up new markets necessarily. Certainly the one with China does not. What they do is give foreign investors superior rights to seek arbitration damages against the country in which they are investing.

In the case of India, the Indian government has decided, as recently as late-January 2013, after a raft of suits from foreign corporations—they are looking at upwards of $5 billion in current arbitration charges against India—to put a freeze on all investment agreements. Certainly any hopes Canada has for getting a new investor state agreement with India are on hold, because India is putting on hold all investor state agreements, and it wants to reopen and renegotiate the ones it has already agreed to.

This puts India in the same category as Australia. It did a full cost-benefit analysis on investor state provisions and decided that they are not of benefit to Australia. South Africa is now also re-examining investor state agreements.

It is time for Canada to do a cost-benefit analysis, as India is doing and as Australia has done, and not only refuse to ratify the Canada-China investment treaty but never enter into one of these things ever again.

Gerald Keddy: Mr. Speaker, I thank the member for Saanich—Gulf Islands for her interest in this subject, and I wish her good luck in maybe reaching a better understanding of it.

I know that she is new to this House and may not be aware that prior to our forming government in 2006, treaties such as the FIPA with China were never brought to this place. There was no opportunity to debate them. There was no discussion about them. I think it was around 2007 that we brought in the rule that treaties would be tabled in the House of Commons for 21 sitting days. Of course, the hon. member did not take advantage of those 21 days. Unfortunately, her party is not large enough to take advantage of those 21 days to force debate. The official opposition did not take advantage of that opportunity to force debate on this issue, and the Liberal Party of Canada did not take the opportunity to force debate on this issue.

What we have, quite frankly, is a whole lot of innuendo, rumour and some misinformation, although I will be fair to the member for Saanich—Gulf Islands. She has not come anywhere near the rumour and innuendo the NDP have put onto this issue.

The principle of a FIPA, or the Canada-China Foreign Investment Protection and Promotion Agreement, is to make sure that Canadian investments in China are protected and that there is reciprocity so that Chinese investments in Canada are protected. The member was quite right when she said that it is over a 15-year period and that at the end of that period, either side, either China or Canada, can opt out of it.

Obviously, those investments already made need some longevity and protection, so another 15 years for those investments that have already been made is not untoward or unreasonable. I suspect, with the hon. member’s background as a lawyer, that she probably wrote a number of agreements similar to that herself in the past.

This is about giving Canadian companies investing in China the same rights and privileges a Chinese company would have. This is about protecting Canadian foreign direct investment in China. We cannot do that without allowing those same rights and privileges to the Chinese. It is called reciprocity. It is called fairness. It is called reasonable, rules-based trading.

I appreciate that the hon. member did not go along with the fear-mongering of the NDP. This treaty in no way impedes Canada’s ability to regulate and legislate on such areas as the environment, culture, safety, health and conservation, which is another thing that needs to be brought up.

What this does is establish a clear set of rules for trading and investment between Canada and China. It promotes trade, helps the Canadian economy, and provides jobs and opportunities for Canadian workers. It is a good agreement.

Elizabeth May: Mr. Speaker, let me amend my earlier statement to make it very clear that I also believe that the Canada-China investment treaty will create a chill for future Canadian governments if we ratify it on those very areas of the environment, health, safety and labour.

I will move to the member’s point that I may be new to this House. I did not just drop off a turnip truck. I have been working on investment treaties for a very long time.

Go back to chapter 11 of NAFTA, which was the first in the world. Of course, it was subjected to a vote in this House, because NAFTA was a much larger treaty and had to have lots of other ancillary laws changed. Interestingly enough, if Canada were to give the six-month notice to exit NAFTA, there would be no grandfathering of other investments. In that sense, the Canada-China investment treaty is very unusual in having a 15-year first period and a further 15-year lock-in.

This treaty is one that should never be ratified. Canada should follow India’s and Australia’s lead and study this whole area to see if, on a cost-benefit analysis, these treaties are worth the paper they are written on and protect Canada’s interests.

Gerald Keddy: Mr. Speaker, I know I only have a minute to sum up, so I am going to try to stick to a couple of important issues and simply correct the record.

Again, in no way, shape or form does this treaty impede Canada’s ability to regulate and legislate in areas such as the environment, culture, safety, health and conservation. The hon. member is incorrect. She is fearmongering and following in the footsteps of the NDP. It is unfortunate to hear that type of rhetoric in the House, quite frankly.

This is no different from 24 other foreign investment promotion and protection agreements that we have already signed with other countries around the world. It is similar to the agreements that apparently dangerous countries, according to the hon. member, such as New Zealand, Germany, the Netherlands, Belgium and Japan have already signed with China. There is nothing untoward here. This again is broken down to rules-based trading. Everybody knows the rules. That is fair trading.

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