The threat to Canada’s sovereignty -- what we are giving to China

Elizabeth May

In the last issue of Island Tides, I detailed my fears about the Canada-China version of the Foreign Investment Promotion and Protection Agreement (FIPPA). In Question Period, I had asked about when we would see the text (announced back in February when the Prime Minister was in China, and signed September 9 in Vladivostok, where both President Hu and the Prime Minister attended the APEC meetings).

On September 26, 2012 (the day after my Island Tides deadline), with no press release or briefing, the Parliamentary Secretary to the Minister of Foreign Affairs, rose in the House to table a few documents. It was during a part of every day called “Routine Proceedings.” The media had sped off for scrums after Question Period. I was waiting my turn to table petitions. Maybe another twenty MPs were in the Chamber when Deepak Obhrai tabled a deal with Norway and two with China – the agreement for peaceful use of nuclear energy and the “Agreement between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments” (the Canada-China Investment Treaty).

The nuclear deal is a cover for our sales of uranium to China. Under the terms of the Nuclear Non-Proliferation Treaty, no country is to sell nuclear materials to a country with nuclear weapons unless it can absolutely guarantee a system of verifications and monitoring to ensure uranium for peaceful uses does not end up in nuclear weapons. The two page deal released September 26, cannot do that.

The more far-reaching deal is the second. It is the one my last column was focused upon without having seen it. It does, in fact, set out a series of obligations for Canada, new rights for Chinese state-owned enterprises, and fails to deliver on reciprocity for Canadian companies operating in China. Worse yet, it will not be voted on in the House. It will be automatically enacted 21 sitting days from when it was tabled in the House. By November 1, barring a miracle, Canada will be bound for the next 15 years (minimum) to these terms. If a future government wants to get out of it, a one year notice is required – and even once the treaty is cancelled, any existing Chinese operations in Canada are guaranteed another 15 years of the treaty’s benefits.

Canada must promote and encourage Chinese investments in Canada (Article 3). Chinese government-controlled companies operating in Canada must be treated exactly the same as Canadian companies (Article 6).

The right for China to claim damages over Canadian laws

The Canada-China Investment Treaty allows Chinese companies (including state-owned enterprises) to sue Canada over decisions that can limit or reduce their expectation of profits. In treaty language, this is called “tantamount to expropriation.” China can claim damages against Canada for decisions at the municipal, provincial, territorial or federal level. Even decisions of our courts can give rise to damages. A similar deal between China and Belgium now has Belgium dealing with a $3 billion claim by china for a banking investment that went belly up.

One improvement over NAFTA Chapter 11 is a list of “exceptions.” Unless the actions are “arbitrary or unjustifiable” or can be seen as a “disguised restriction of trade,” the treaty says measures to protect health, safety or the environment are exempted. I am very doubtful these exceptions will make any real difference as the complaint process is secret and China is going to have the stronger economic clout to force Canada to agree. The damage claims start with six months of diplomatic negotiation. If that fails, damage claims move to arbitration – behind closed doors.

In those secret hearings, no other level of government – even if it is the government that made the decision China challenges – have any right to intervene or attend the arbitration. No other interested parties are included.

A one-way street

Although the Harper Conservatives claim the deal is about protecting Canadian companies doing business in China, the deal is lop-sided in favour of China. For example, Canada could not demand “performance standards” (percentage Canadian jobs or materials for example) of a Chinese SOE. But China can make demands (and create hurdles) against Canadian companies.

Restrictions on our use of our own resources

The Canada-China Investment Treaty requires that if, in the future, Canada wants to conserve natural resources (fisheries, water, oil, uranium, forests -- everything is covered), and reduce Chinese access to these resources, we are only allowed to do so to the extent we limit our own use of those natural resources.

On October 1, 2012, I asked the Speaker for an Emergency Debate on the treaty. I explained in a letter I had tabled with the Speaker on September 28 (and available on the website) all the reasons that it was an emergency. Sadly, he ruled that it was not a case for an emergency debate. I asked in Question Period on October 4th, with 16 sitting days left until the treaty takes effect, whether the Prime Minister had chosen to approve this treaty by Order in Council to keep its details from Canadians or to avoid having to force Conservative MPs to vote for something they did not believe in. House Leader Peter Van Loan said there could be debate if an Opposition Party chose to use one of its Opposition Days to do so. I cannot get either the Liberals or the NDP to agree to give it an Opposition Day. But even if they did, it is not the same as submitting the treaty to the process in the House. True, treaty making is a Royal Prerogative, meaning it does not have to go before the House. Nevertheless, the House has been debating C-42, the Canada-Panama trade agreement since last spring (total volume of trade $213 million.) and we had six days debate in the House and 6 days in Committee before passing C-23, the Canada-Jordan trade agreement (volume of trade $90 million.) This sweeping deal with China is not due for a single hour of debate before passage (trade volume $64 billion.)

Please join me in trying to raise the alarm about this treaty. We do not have much time left.