The Panda in the Room

It has been more than a year since the Harper government cabinet was in a legal position to ratify the Canada-China investment treaty. Thank goodness that step has not yet been taken.

PandaIt is the largest threat currently hanging over Canadians’ ability to chart our own course, whether in environmental protection, labour laws or any aspect of municipal, provincial or federal rule-making.

The Canada-China Foreign Investment Protection and Promotion Agreement, commonly known as FIPA, is the most significant investor-state agreement signed by Canada since NAFTA.

This deal conveys to state-owned enterprises of the People’s Republic of China powers and rights superior to those of Canadian companies to complain and seek arbitration damages against Canadian governments.

Once in force, it lasts a minimum of 31 years. Firstly, there is a 15-year first phase after which, if a future government wants to exit the treaty, a one-year notice is required. Following that step, even once the treaty is cancelled, any existing Chinese operations in Canada are guaranteed another 15 years of the treaty’s benefits.

This treaty would thus bind any future Canadian government for an unprecedented 31-year period if ratified.

FIPA effectively creates a completely unnecessary set of rights to the SOEs of China, rights that are not required by China in order to do business here. Australia has no such FIPA with China, and has a 10-fold larger trade relationship with China than does Canada.

The treaty also empowers Chinese SOEs to claim damages from Canadian taxpayers for any loss in profits resulting from any legislation in Canada, passed at any level of government, after FIPA has become law. The damage claims start with six months of diplomatic negotiation. If that fails, damage claims move to arbitration behind closed doors.

The Canada-China Investment Treaty would allow Chinese investors to sue our government outside of Canadian courts. Special arbitrators would take the decisions. These arbitrators, unlike judges, do not have secure tenures or set salaries. Their decision cannot be subject to judicial review. The arbitrations are to be secret. Even the fact they are happening is to be secret.

In Canada, treaty-making differs from legislation in that it is a royal prerogative. Thus a treaty can become law after having been tabled in Parliament for no more than 21 days, after which time it can be ratified through a cabinet order in council.

With all parliamentary avenues to avert this disastrous treaty having long been exhausted, the Hupacasath First Nation of Port Alberni, BC courageously attempted to block the Canada-China agreement through the courts this past spring.

In June, lawyers for the Hupacasath spent three days before Federal Court in Vancouver arguing for a delay in the treaty’s ratification at least until a proper consultative process had been allowed to take place with First Nations who were to be affected by the agreement.

On Aug. 26, Federal Court Chief Justice Paul S. Crampton announced that the Hupacasth’s claim had been dismissed on the grounds that any adverse impacts to the First Nation’s traditional territory as a result of the treaty were “non-appreciable and speculative in nature.”

The Hucapasath have since taken their legal challenge to the next level: the Federal Court of Appeal, and, eventually, the Supreme Court of Canada. Right now, this Vancouver Island First Nation of fewer than 300 is our country’s last line of defence against this egregious treaty, and with it the Chinese economic juggernaut.

Would it be too speculative to imagine a future where takeovers like the $15.1 billion acquisition of oil and gas giant Nexen by the Chinese government owned CNOOC are the norm, rather than the exception? Or where Canadian taxpayers are forced to reimburse Chinese corporations for profits they lost through Canadian legislation aimed at protecting our land, air and water?

Under NAFTA, our government has already been forced to pay $160 million in compensation. This FIPA could open the door to challenges to Canadian legislation on a scale we can’t yet even imagine, leaving taxpayers to foot the bill.

The Harper Conservatives had once boycotted China, with the PM refusing to attend the Beijing Olympics. Now, he is trading Canada away for a panda visit. By signing the Canada-China Investment Treaty the Harper government is allowing Canadian democracy to be eroded in the interests of Chinese profits.

Originally published in Embassy News.