OTTAWA - A New Democrat government would do everything in its power to extricate Canada from a controversial and imminent investment treaty with China if it turns out the agreement isn't in the best interests of Canadians, says leader Tom Mulcair.
Critics say the Foreign Investment Promotion and Protection Agreement would turn Canada into little more than a "resource colony" and is poised to be ratified despite almost no parliamentary debate.
Mulcair, speaking after question period Tuesday, said an NDP government would find a way to get out from under the deal after the next federal election in 2015 if closer inspection revealed it wasn't in Canada's best interests.
"You can sign into an agreement and then you can remove yourself from the agreement. That’s what successive governments can do," Mulcair said.
"We’re not going to be bound for the next 30 years by an agreement that hasn’t even been studied, that would make our court system take the interests of foreign investors and foreign companies pass above the interests of Canadians, the interests of our environment, the interests of our rights."
Bolstered by more than 60,000 signatures on petitions and a precision-targeted letter-writing campaign led by activists, the NDP, Liberals and Green party Leader Elizabeth May began a last-minute push Tuesday for a fuller debate on the agreement.
"China is just as important as the United States and we should really be treating this treaty with just the same level of public scrutiny and debate as NAFTA," said Matthew Carroll, campaigns director for Leadnow.ca, an advocacy group that organized the petition and has flooded MPs with emails and letters.
Canada and China signed the agreement at the beginning of September, and the government tabled it in the House of Commons near the end of that month. Under new rules set by the Conservatives, the agreement must be before Parliament for 21 sitting days before it can be ratified.
That time runs out on Thursday. After that, the cabinet needs to sign off on it through an order-in-council. It's not an automatic process, but the Conservatives have given every indication that ratification is imminent.
The agreement comes into force when both countries have ratified it.
"With this agreement, our government is bringing to Canadian investors the protection and predictability to invest with confidence in China, the world's second largest economy," Rudy Husny, a spokesman for International Trade Minister Ed Fast, said in a statement when asked if the government would be willing to hold off on ratification to allow for more debate.
The agreement has been 18 years in the making and is a replica of many other foreign investment protection agreements Canada has with its trading partners, he said.
The opposition has had ample opportunity to examine the China deal, but chose to use its four opposition days in Parliament on other subjects, he added. Plus, government officials have briefed MPs on the deal, he said.
"The NDP and the Liberals are simply misleading Canadians."
Mulcair, however, insisted that it's up to the government to decide whether the treaty is held up for proper scrutiny.
"They're trying to shove it down Canadians' throat without proper analysis," he said. "They're the government. They control the agenda in Parliament. If they're serious, if they're sincere, they’ll provide Canadians time to study this deal and find out what’s in it."
Critics say the deal should have gone before parliamentary committees to be examined by experts for its implications as well as for flaws and weaknesses.
"We have a government that is refusing normal, democratic process," said NDP industry critic Peter Julian.
May argues that the deal would give Chinese corporations — and the government that owns them — new powers to influence Canadian policy, not just in terms of investment and industrial development, but also in the realms of environment and health.
And since Canada is clearly the junior partner in the trading relationship, Canadian governments at all levels will have little choice but to cater to the whims of a China desperate for natural resources, she said.
"We become the resource colony in that context," said May.
As of the end of 2011, Chinese direct investment in Canada totalled $10.9 billion, while Canadian investment in China was $4.5 billion.
Canadian business has long complained that the investment climate in China is too uncertain to warrant major increases in investment and has repeatedly urged Ottawa to sign a deal to ensure Canadian interests are treated just like other investors in China.
But the investment agreement is going through the procedural hoops in Ottawa at a sensitive time in the Canada-China business relationship. The government is in the midst of deciding whether to approve the proposed $15.1-billion takeover of Calgary-based Nexen Inc., by the China National Offshore Oil Corp.
Industry Canada has until Nov. 11 to say whether it believes the takeover is in the country's best interests — a deadline that could be extended if both Ottawa and CNOOC agree.
The CNOOC deal and the foreign investment pact are separate processes, but the federal government faces similar criticisms in its handling of both: that they have not been subject to public scrutiny and that Ottawa risks giving up too much power to the Chinese government.
Indeed, Leadnow.ca addresses both processes in the same breath: "Stop the Canada-China FIPA investment deal and Nexen takeover," the group's petition urges.
"These agreements would pave the way for a massive natural-resource buyout and allow foreign corporations to sue the Canadian government in secret tribunals."
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Here are five things to know about Canada's investment treaty with China which is expected to be ratified next week:<br> <strong><em>With files from CBC</em></strong>
5. Growing Investment From China
This FIPA is different from other FIPAs due to the sheer amount of investment China already has in Canada, said Gus Van Harten, an international investment law expert and associate professor at the Osgoode Hall Law School at York University, in an interview with CBC Radio's The House. Van Harten explained, the FIPAs Canada has in force are typically with countries who don't own major assets in Canada. However, under this treaty, Van Harten said Canadian taxpayers will assume "more of the risks and more of the constraints" than their Chinese counterparts to the degree that Chinese investments in Canada outpace Canadian investments the other way.
According to Van Harten, the deal doesn't deliver on market access and investor protection. "We come out on the losing side on both," said Van Harten. "We should insist on reciprocity. The treaty does not allow for market access except under the exisiting legal framework of each country." The problem with that, Van Harten said, is Canada's legal framework is "more open and less opaque" than China's existing legal framework which will benefit China more than it will benefit Canada.
3. Impact On The Provinces
Under this treaty, the investor-state mechanism is such that China could sue for decisions made by any level of government in Canada, if Chinese companies thought they were not being treated the same as Canadian ones. In other words, this deal could undermine the provinces "bargaining power," said Van Harten because "this very powerful arbitration process operates outside of the Canadian legal system and Canadian courts." Arbitration would happen behind closed doors, said Van Harten and if the arbitrators found Canada at fault, Canadian taxpayers could be left footing the bill. Several countries have already faced stiff punishment under such treaties. This, according to Van Harten, also calls into question whether the treaty is unconstitutional or not.
2. Opposition Parties
The Opposition New Democrats, Liberals and Greens are all calling on the federal government to study and debate the agreement instead of ratifying it and locking it in for the next 31 years without public consultation – as they can do. In an interview with CBC Radio's The House on Saturday, NDP MP Don Davies, who serves as the international trade critic, told host Evan Solomon that if the federal government ratifies the agreement as it is now, it will have "frozen in time a very lopsided deal." Davies said they have "received 60,000 emails in the last two weeks from Canadians who are concerned about this deal."
The federal government insists "this agreement includes reciprocal obligations" and is good for Canada, said the Conservative MP who tabled the FIPA with China. Also in an interview airing on CBC Radio's The House, Deepak Obhrai, the Parliamentary Secretary to the Minister of Foreign Affairs, said this FIPA with China "levels the playing field" between the two countries. Obhrai told Solomon, this agreement "give assurances to Canadian businesses that their investment in China is protected and they can do business in China because this is a deal that is open and treats our companies in each other's country on equal terms." The question we should all be asking ourselves Van Harten said, is "has Canada conceded something now that we were not prepared to concede under previous governments?" And according to Van Harten, the answer is "it's quite possible."
Here are a few details of the major investment deal coming soon between Canada and China, as well as a list of what CBC chief political correspondent Terry Milewski calls a "small blizzard of incremental agreements," signed in Beijing. <em>With files from CBC</em>. (Diego Azubel-PoolGetty Images)
The Big One: FIPA
Prime Minister Stephen Harper called the foreign investment promotion and protection agreement (FIPA) between Canada and China the first "comprehensive economic agreement" between the two countries. In fact, what was signed by Harper and Chinese Premier Wen Jaibao in Beijing is not the final deal, but a declaration of intent: Now it must be legally reviewed and ratified by both governments, which for Canada will mean a debate in the House of Commons. Once both countries complete this process, it will need to be formally signed to take effect. This deal will protect Canadians investing in China, as well as Chinese investors in Canada, from "discriminatory and arbitrary practices." Once in place, investors can have more confidence that rules will be enforced and valuable business deals will be subject to predictable legal practices. Harper told reporters in Beijing he "absolutely" expected that it will make a "practical difference." "The agreement does not override existing Canadian law in regard to foreign investment and foreign investment review," Harper said. "Those laws remain in place." Negotiations for this agreement took 18 years, and key players in manufacturing, mining and the financial sectors were consulted to get to this stage. It's not unusual for Canada to have this kind of an agreement with a trading partner. FIPAs are in force with 24 other countries that trade with Canada, and active negotiations are underway with 10 other countries, according to the government's announcement. (Diego Azubel-PoolGetty Images)
The 'Blizzard' (By Sector):
(AP Photo/Valentina Petrova)
- A new protocol, building on a 2010 agreement to restore Canada's market access to the Chinese market for Canadian beef following the 2003 BSE outbreak and resulting border closures, to allow industrial beef tallow (fat) to be imported for the first time in almost a decade. China used to be Canada's top export market for tallow ($31 million in 2002), and now Canada has a shot at a share of the $400 million in tallow China imports from around the world. - A memorandum of understanding (MOU) on canola research, to address a recent fungal disease in canola and rapeseed that threatens Canada's valuable trading relationship with China in canola. - On Tuesday, Chinese aquaculture feed company Tongwei announced it will increase its purchase of Canadian canola by up to $240 million per year by 2015. (DAVID BUSTON/AFP/Getty Images)
- A MOU between Natural Resources Canada and the Chinese Academy of Sciences to collaborate on scientific research on sustainable development of natural resources. The government release touts benefits including new technologies for resource firms, carbon emissions reduction strategies, reduced environmental impacts and natural hazards from resource development, and new opportunities for Canadian suppliers of equipment and services. - A MOU spelling out a "framework" for Parks Canada and China's state forestry administration to collaborate and share scientific expertise in the management of national parks, natural reserves and other protected areas. The agreement includes language around ecological restoration, conservation measures for endangered wildlife, wetlands development, and the preservation of forests and wetlands. (<a href="http://www.flickr.com/photos/47096398@N08/" target="_hplink">Flickr: eleephotography</a>)
- A continuation of the MOU, first signed in 2001 and renewed in 2006, on energy co-operation to "engage China on energy issues" through a Canada-China joint working group on energy co-operation, chaired by Natural Resources Canada and China's national energy administration, which is responsible for Chinese energy policy. The working group oversees joint research projects, exchange of expertise, and co-operation between energy companies in both countries, including the promotion of energy efficiency and renewables. It aims to both attract capital investment and improve market access for Canadian energy resources and technology. (MARK RALSTON/AFP/Getty Images)
Science and Technology
- Approval of seven projects, valued at $10 million, under the Canada-China framework for co-operation on science and technology and innovation, including: a diagnostic kit for acute kidney injuries, a wind energy seawater desalination system, a waste heat-recovery system to help oil refineries consume less fuel, new solar cells for renewable energy panels, a real-time multi-sensor navigational tracking device for hand-held devices, a blue-green algae bloom warning system and "next generation" large-scale geographic information systems. - Two more calls for proposals, valued at $18 million ($9 million from each country) for joint research under the same framework. These proposals are for the development of "innovations with high commercial potential" in the areas of human vaccines and clean automotive transportation. The Canada-China joint committee on science and technology, made up of individuals from industry, academia and government, sets the priorities and oversees these projects. (To date, 21 projects ranging from nuclear power to AIDS drugs, to clean technologies for pulp and paper have received some $28 million in funding.) (TOSHIFUMI KITAMURA/AFP/Getty Images)
- A renewed MOU extending and modifying the Canada-China scholars' exchange program, which has seen 900 students travel between Canada and China since 1973. New eligibility rules and scholarships will be in place for the next round of competitions in 2012, including eight to 12 Canadian scholarships for Chinese professionals and 20 awards for Canadian university students. (<a href="http://www.flickr.com/photos/plutor/" target="_hplink">Flickr: Plutor</a>)