Attention should be paid to the fact that the Prime Minister has signed a deal with President Hu of China that promises investor protection. The text of said deal is not yet before the House of Commons, but everything I read about it (including from business analysts at Heenan Blaikie and Osler, Hoskin and Harcourt) anticipates the deal will include investor-state provisions similar to those in Chapter 11 of NAFTA.

Chapter 11 of NAFTA allows corporations from Mexico or the USA to claim damages against Canada if any level of Canadian government (municipal, provincial or federal) causes them to experience less profits than they had anticipated. Canada has actually repealed a law limiting a toxic gasoline additive when the US-based manufacturer sued under Chapter 11 — and we paid $10 million plus in damages. This outrage only gets more outrageous if the claims for multiple millions in damages come from a non-democratic enormous economy to which we have hitched our wagon as a compliant resource colony.

When will Mr. Harper share the text of this investor agreement with Parliamentarians? When will it be shared with Canadians? It was signed on September 8th when both Harper and Hu were in Russia. It must now be ratified. Assuming all the Conservative MPs who are worried about selling out our country to China do what they always do and submit to the will of the Boss, it will become a trade obligation. China will, if offended by any new health, labour, or environmental law, be able to make a claim for damages. I have already witnessed the chilling effect of Canada knowing a US based corporation can sue under Chapter 11. It was rumoured that former Liberal Health Minister Allan Rock refused to ban cosmetic use of pesticides for fear of Chapter 11 claims by US pesticide manufacturers.

What happens when Canadian laws, passed democratically, are struck down in hotel room arbitrations launched by the Communist Party of China?

I pay attention to things that CNOOC’s CEO says in public. In the August 29, 2012, Wall Street Journal, CNOOC CEO Wang Yilin said, “Large-scale deep-water rigs are our mobile national territory and a strategic weapon.” OK, so the bitumen isn’t mobile – until you mix it with diluents and stick it in a pipeline. But the oil sands do become Chinese territory. What did he mean about “strategic weapon?”

Are there national security implications?

I would love to trust in a national security review under the 2009 amendments to the Investment Canada Act, except that Stephen Harper specifically rejected the advice of the blue ribbon panel (struck after the Minmetal attempt to buy Noranda) that Canada needed a clear, objective definition of “national security.” The experts thought we should have a definition and use it to assess any takeovers of Canadian companies by foreign interests — particularly state-owned enterprises. Our PM rejected the advice. Instead the Canada Gazette for the 2009 amendments says that “national security” cannot be defined. It is, apparently, a fluid term.

Smart people I respect, like Andrew Coyne, say “don’t worry — there’s no national security threat when you cannot take the resource out of the country.” But then I run into stories like this:

Beijing hints at bond attack on Japan

Jin Baisong from the Chinese Academy of International Trade – a branch of the commerce ministry – said China should use its power as Japan’s biggest creditor with $230bn (£141bn) of bonds to “impose sanctions on Japan in the most effective manner” and bring Tokyo’s festering fiscal crisis to a head.

Writing in the Communist Party newspaper China Daily, Mr. Jin called on China to invoke the “security exception” rule under the World Trade Organisation to punish Japan, rejecting arguments that a trade war between the two Pacific giants would be mutually destructive.

Separately, the Hong Kong Economic Journal reported that China is drawing up plans to cut off Japan’s supplies of rare earth metals needed for hi-tech industry.

– The Telegraph, September 19, 2012

OK, maybe he’s just threatening to destroy Japan’s economy. Maybe he doesn’t mean it. Maybe the WTO wouldn’t let him do it…. but then there was the Sino-Forest fraud, busted by the Ontario Securities Commission:

OSC puts the spotlight on Sino-Forest gatekeepers

In its allegations Tuesday, the OSC noted that auditors Ernst & Young “were not made aware” of Sino-Forest’s “systemic practice of creating deceitful purchase contracts and sales contracts.” The commission makes no further comment on the audit firm’s work. A spokeswoman for Ernst & Young could not be reached for comment Tuesday.

The OSC issued a report in March calling on boards, underwriters, auditors and stock exchanges to improve the practices for listing foreign companies on Canadian stock exchanges, saying there has been a broad lack of “skepticism” about business practices in emerging companies like China.

– Globe and Mail, May 22, 2012

There’s a beautiful term: “broad lack of skepticism.”

It makes me nervous that Chinese companies are merely branches of the Chinese government. The Communist Party hierarchy appoints the boards of directors of CNOOC, Sinopec and Petro-China.

When I read in the business pages that Petro-China wants to bid on construction of the Enbridge pipeline, and read in the same story that Chinese companies are very competitive in their bids because of low labour costs, I picture the labourers who built the national dream of Pierre Berton’s imaginings… with a brutal and nasty history. We have a temporary foreign workers programme. It could happen. And the bitumen going through the proposed pipeline is to go to Chinese supertankers to Chinese refineries.

All this makes me nervous. It makes me nervous in two quite contradictory ways. Firstly, I am a tolerant small “l” liberal type of person. I am not Sino-phobic. China is not a country one can ignore. In terms of global climate negotiations, China’s engagement is essential. China has been, at least at COP17, far more progressive than Canada in talking about the need for a global climate deal.

I want greater ties with China for environmental endeavors, and cultural exchanges, and — yes – trade too. Losing sovereignty to China makes me nervous. I don’t want to be intolerant. But I want us to trade items made in Canada, by Canadians, to China. I don’t like the idea of China owning Canada. It makes it hard for us to point out to the Chinese government that it must start respecting human rights. We need to be really forceful in advocating for religious and political freedom in China. How do we do that when they have veto power over Canadian laws?

And then there are issues of global tensions. Mr. Harper and John Baird are talking tough to Iran. But what about the fact that, while we claim we are exerting sanctions on anyone doing business with Iran, Sinopec, now a major stake-holder in Syncrude, is Iran’s number one customer for oil? Or, that Chinese oil money helps prop up Bashar al-Assad?

So, bottom-line, the Nexen-CNOOC deal doesn’t have me nearly as freaked out as the investor deal Stephen Harper signed in Russia. But when I think about the idea of “net benefit” I just don’t see any answer but “no.”

The post Why I think we are absolute idiots if we approve CNOOC take-over of Nexen appeared first on Elizabeth May.

“This has been described as the largest takeover by a Chinese company in the world, so very serious questions must be raised about the wisdom of such an unprecedented move,” May stated.  “We simply cannot allow strategic energy resources to disappear from Canadian control at such a rate and level with no real oversight.”

State-owned CNOOC was the first Chinese company to make a major acquisition in the Canadian oil industry when it purchased a 17-per-cent interest in MEG Energy for $150-million in 2005.  Then, in 2011, it expanded by acquiring OPTI Canada for $2.1-billion, giving it 35 percent of key assets like the Long Lake oil sands facility.  Nexen controls and operates the remaining 65 per cent of that site.

Foreign control of Alberta’s oil sands has reached a level that could very well be worrying.  This year, PetroChina bought out Athabasca Oil Sands Corp.’s remaining 40-percent stake in the MacKay River – and became the first Chinese company to have full ownership of an oil-sands project.  Last year, deals included Sinopec’s $2.2 billion purchase of Daylight Energy Ltd., its purchase of 9 percent of Syncrude, and CNOOC’s takeover of Opti Canada.

The Nexen mega-deal was announced almost at the same time as a $1.5-billion acquisition by China’s top refiner, Sinopec Corp., of a 49-per-cent stake in the North Sea operations of Talisman – one of Canada’s top oil and gas exploration companies.

“Chinese investment in Canada’s oil sands is not so much about opening new markets in China for Canadian products as it is about nationalizing our valuable resources by Beijing,” said May.  “With investor-state rules, giving corporations even greater power, now under negotiation between the two countries, we may be precluded from implementing more rigorous regulations.

“The prime minister’s eagerness to encourage Chinese investments has already led to gutting of environmental laws in Bill C-38.”

Not all countries are as willing as Canada to hand over their strategic energy interests.  In the US, a negative reaction forced CNOOC to withdraw an $18-billion (U.S.) bid for California-based Unocal Corp.

“The Harper Conservatives added the words ‘national security’ to the Investment Canada Act in 2009, but so far they have refused to define it and have rejected expert advice on the matter,” said May.  “They haven’t even clarified what they consider to be of “net benefit” to Canada when it comes to selling our non-renewable assets.

“We are losing control over energy ownership and planning as we court multi-billion dollar investments from enterprises intrinsically part of a foreign Communist government with an appalling human rights record.”

Anthony Campbell, former head of the Intelligence Assessment Secretariat of the Privy Council Office, wrote:  ‘The servility of Canada’s political leaders…to the obvious manipulations of Chinese strategists who flaunt world trade and financial market principles and jail democracy-promoting authors for 10-year terms is a national disgrace.”

Noting also that a Harris-Decima survey showed that 90 percent of Canadians oppose Chinese companies gaining a controlling interest in or completely taking over a Canadian-owned company, May called for a public inquiry into the Nexen purchase and the status and future of foreign interests in the oil sands.

“I know I’m not alone as I voice my concerns,” May concluded.  “This reckless sell-out cannot continue.”

The post May Demands Public Inquiry into Future of Strategic Resource – Latest Chinese Acquisition in Oil Sands Raises Serious Concerns appeared first on Elizabeth May.

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Today’s press includes the news that PetroChina wants to build the pipeline to bring bitumen crude to tankers. Even the Canadian Council of Chief Executives has the report now by Professor Moran from Georgetown University, saying Canada needs clear tests of national security in the Investment Canada Act. When will we get them?

Hon. Joe Oliver: Mr. Speaker, we do not have any such information. However, we can generate hundreds of thousands of jobs and trillions of dollars in economic activity and at the same time protect the environment. We can do that by modernizing the regulatory system to the requirements of the 21st century so that jobs are created in the next two or three years and not the next fifteen or twenty years.

The post Oral Questions – Foreign Investment appeared first on Elizabeth May.

I want to make it clear that I certainly support the idea that we have better ties with China. This is not a statement about our relationship with China and the importance of raising human rights in Tibet and the situation for dissidents in Chinese jails. Our opportunities for raising these issues are enhanced with having a respectful, strong relationship. This is about how Canadians should respond to ensure that foreign investment reviews are clear, that the information is transparent and available and that there are national security reviews that go along with this, particularly where strategic Canadian resources, such as oil sands and uranium, are being traded with the People’s Republic of China’s enterprises.

I would like to put this into context. The hon. Minister of Natural Resources has said there is not very much investment from China directly in the oil sands. Of the $73.6 billion invested in the oil sands between 2007 and 2011, oil sands investment from China was approximately $12 billion, or 16%. This is not a small percentage.

The involvement of Chinese companies, particularly PetroChina, the China National Offshore Oil Corporation and largely Sinopec have been strategic. In the case of Sinopec it has managed to buy a 9% share in Syncrude for a cost of just about $5 billion. It managed to have a seat on the board of Syncrude and be in a position to veto any decision that Syncrude might otherwise make to process the bitumen crude in Canada, thus creating Canadian jobs in Canadian refineries. That strategic advantage for Sinopec does not seem to have been studied in the way that I think Canadians would have expected.

When I asked this question in relation to the oil sands last week, the Minister of Industry claimed that back in 2009 “we improved the transparency”. This was in relation to my question about the national security aspects of this kind of investment. In fact, when we go back to the decisions in 2009, we find that the cabinet rejected the advice of the expert panel that had been put together in 2007. It was a competition policy review panel that had been mandated to review these arrangements.

According to the Canada Gazette of September 30, 2009:

The term national security should be explicitly defined and national security reviews should take place according to concrete, objective, and transparent criteria. This recommendation was not accepted…

In addition to the oil sands investment, we now have the Prime Minister coming back with a deal for uranium. This deal for uranium has much more lax accounting procedures than was offered in previous deals with China, which is why in the past Canada has not continued to trade uranium in China. The strategic concern is not just for what China would do with the uranium, but for China’s relationship with the civilian nuclear industry program in Pakistan and the potential for nuclear proliferation. These are strategic concerns.

I would like the government to tell Canadians exactly what national security review—

The Deputy Speaker: Order, please.

The hon. Parliamentary Secretary to the Minister of Industry.

Mike Lake: Madam Speaker, I took note of the member’s questions, both last week and again this week. Both questions are important in light of tonight’s debates.

Last week, she asked the minister about foreign security provisions in the Investment Canada Act. The minister responded that the national security aspect was included in the law in 2009. Unsatisfied with the answer, the member for Saanich—Gulf Islands stood up in the House yesterday and asked the following. She said:

Mr. Speaker, last week I put a question to the Minister of Industry relating to the Chinese takeover of Canadian resources.

He said I was unfamiliar with the Investment Canada Act changes of 2009. 

She went on to say:

In fact, the Canada Gazette of September 30, 2009 said:

Then the member quoted from the Canada Gazette, just as she did now:

The term national security should be explicitly defined and national security reviews should take place according to concrete, objective, and transparent criteria. This recommendation was not accepted— 

Then the member said today, “close quote”.

The trouble is, if you read the Canada Gazette it is not a closed quote. It actually goes on to say something else. The member for Saanich—Gulf Islands was wrong for two reasons. First, she was quoting from a summary of comments and responses to the gazetting of national security provisions in the summer of 2009. She was not quoting from the regulations themselves. Further, she cut the quote in half, as I just mentioned.

The full quote from those comments and replies is as follows. The Canada Gazette states:

4) The term national security should be explicitly defined and national security reviews should take place according to concrete, objective, and transparent criteria. This recommendation was not accepted since national security threats are dynamic in nature and, therefore, constantly evolve. Neither Part IV.1 of the ICA nor the Regulations define the term “national security” since future threats to national security cannot be predetermined and any such definition may limit the government’s flexibility to respond to future threats.

That is the complete quote.

However, that does not mean that national security provisions do not exist. How do I know that? Because they are not hard to find. We just have to grab a BlackBerry or an iPad and go to www.ic.gc.ca. If the hon. member wants, after we are done here she can come over and I can show it to her on my iPad. They have been there for more than two years. I would ask the member to go and read that section of the website and the associated regulations before getting up to ask her next incorrect question.

The post Foreign Investment (A) appeared first on Elizabeth May.

Elizabeth May, Green Party MP for Saanich-Gulf Islands and Leader of the Green Party of Canada, held a media conference in Ottawa today to outline her serious concerns about the federal government’s growing dependence on foreign money and influence in the oil sands and elsewhere – especially in light of Stephen Harper’s tour of China.

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“We are being told that the Harper government’s almost-desperate attempts to lure foreign money to Canada is business as usual, bringing needed investment, but there is much more at stake which requires public discussion,” said May.  “In fact, what I now call the China-Harper Axis of Oil has so many negative repercussions; I have had to prepare a short list, including everything from job loss to Syria.

“Canadians simply cannot and should not make the dramatic economic and social shifts Harper is aggressively orchestrating without more information.”

1. The oil and gas sector already has nearly two times the amount of foreign investment compared to the average in other areas of our economy with twice the percentage of profits leaving Canada. 
2. Concerning Chinese oil sands investments, estimates vary because of the lack of transparency, but it’s at least $12 billion and as much as $20 billion.  State-owned Sinopec, China`s second-largest oil producer and top refiner, is part of a consortium that has provided about $100 million to fund the Enbridge pipeline-and-tanker scheme`s regulatory and development costs in exchange for guaranteed shipment on the pipeline and an equity stake.
3. During the 2008 federal election campaign, Stephen Harper promised he wouldn’t export raw crude to countries with weaker environmental standards than Canada, protecting Canadian jobs.  With the Enbridge pipeline-and-tanker proposal, it has been estimated that more than 26,000 jobs will be lost because the bitumen will be refined in China, not Canada.
4. Not only jobs will be lost, but energy security and even national sovereignty are at stake.  As Anthony Campbell, former head of the Intelligence Assessment Secretariat of the Privy Council Office, has pointed out:  “We are sitting ducks.”  We are losing our ability to control the oil sands and our energy future.  For example, when China’s state-owned enterprise Sinopec bought minority shares in Syncrude in 2010, it got the right to veto any Syncrude decision to keep jobs, upgrading, and refining in Canada. (See Terry Glavin’s article, Defenceless, in the Ottawa Citizen, Saturday, February 4.)
5. Even Enbridge has admitted that its pipeline will be of no benefit to Canada if it doesn’t secure the so-called “Asian Premium” – a higher crude price.  Economist and former CEO of the Insurance Corporation of British Columbia, Robyn Allan stated in her submission to the National Energy Board Joint Review Panel:  “The upshot is that Canadian refinery demand … will have its market price determined as if the transactions for Canadian crude oil supply and demand take place in the Asian market.”  This will mean, says Allan, “a decrease in family purchasing power, higher prices for industries who use oil as an input … a decline in real GDP, decline in government revenues, increase in inflation and an increase in interest rates and further appreciation of the Canadian dollar.”
6. Canada will slowly become a petro state with all the negatives we’ve witnessed around the world.  Journalist Andrew Nikiforuk has written that Canada is moving in that direction.  He warns:  “Oil exporting nations, which run on oil loot instead of taxes, don`t function like real governments because over time they come to represent hydrocarbons the way plantation economies once championed slaveholders. Ultimately, most petro states, from Russia to Saudi Arabia, fear dissent, transparency, fair markets and good governance.”
7. The absurdity of so-called “Ethical Oil” is made transparent when you consider our increased, unquestioning partnership with China.  After all, China is also working closely with Iran, Syria, and Saudi Arabia.  This fact also makes a mockery of any government concerns about “foreign” influence among opponents of the Enbridge/China pipeline.

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The above raises the following questions:

1. When China has access to more and more of our crude oil, it will be able to provide jobs and produce cheaper consumer goods for its people.  Why isn’t Harper doing for Canada what the Chinese government is doing for China?
2. How can Canada raise issues like human rights abuses in China and elsewhere when so many of our future development eggs are in the Chinese basket?  How can we strongly and credibly criticize China for its refusal to support the UN Resolution on Syria, for example?
3. Of course, the background to all my concerns is the fact that the planet is warming almost visibly.  The PM’s position in Durban was to reject the one legally binding instrument, the Kyoto Protocol, insisting we would only join in to an agreement that included China.  China, already having done more on climate change than Canada, insisted it would only take on targets if and when countries, such as Canada, signed up for a second commitment period under Kyoto.  Is the PM using his trip to China to take a substantial step to global climate action by committing to China that we will withdraw our letter of intent to withdraw from Kyoto?
4. Finally, I remember the time when Trudeau created Petro-Canada and its office in Calgary was referred to as Red Square.  Some Canadians were upset by Trudeau’s moves to nationalize our oil resources, but at least the nation that would have benefitted was Canada. Now, instead of Petro-Canada, it’s Petro-China, and instead of Ottawa nationalizing the Canadian oil and gas industry, it’s Beijing doing the nationalizing.

The post “Axis of Oil” Poses Significant Problems and Questions for Canada appeared first on Elizabeth May.

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Well, I am asking. How did this happen without public debate?

David Anderson: Madam Speaker, the premise of the member’s question is just rubbish. Our government is concentrating on what is important to Canadians, which is the environment and economic growth.

The fact is the oil sands are responsible for over 100,000 direct jobs across Canada. That number will grow to 700,000 jobs. That is how many jobs the opposition, the NDP member opposite and the Liberals say no to every time they oppose the development of the Canadian economy.

The post Oil and Gas Industry appeared first on Elizabeth May.