New Canada-China trade deal is bad for Canada

FIPPA will allow a foreign power unprecedented influence over Canadian sovereignty

The Canada-China Foreign Investment Promotion and Protection Act (FIPPA), signed by the prime minister and China's president last September in Vladivostok, Russia, should concern all of us because it trades away our laws and rights.

Among other things, FIPPA opens the door for China to play a leading role in Canada's petroleum sector with little in return for Canadians. It will also allow a foreign power unprecedented influence over Canadian sovereignty.

There's much wrong with FIPPA, but I will focus on three areas that are compromised:

•provincial rights;

•legal rights of Canadian businesses and investors; and

•environmental protection laws.

First, Part B, Article 2, Section 3 of FIPPA suggests that a federal government may be permitted to get around the otherwise relevant sections of our nation's Constitution.

From a practical perspective, it is far easier for China to impose any agreement on its provinces than for Canada's federal government to do the same here. This begs a critical question. Is it morally right and politically wise for the federal government to impose an agreement on the provinces that affects their rights without consulting them?

This provision could be unconstitutional because, according to section 92(5) of the Constitution Act 1867, provinces have exclusive jurisdiction over management and sale of public land within their borders. This means the provinces have exclusive right to sell and set the conditions for sale of Crown land within their jurisdictions and to approve or reject the granting of leases on or under provincial Crown land. The provinces also have the right to conduct environmental assessments of proposed projects on or under provincial land.

What would the federal government do if the China National Offshore Oil Corp. (CNOOC) were to be the lead partner and/or the main investor in a future pipeline project, and the company insisted the pipeline go west in spite of opposition from the British Columbia government, our First Nations peoples and any other B.C. residents or other Canadians concerned about threats to the environment from oil spills in an area with hundreds of islands and, in places, treacherous straits?

Second, I want to stress how dangerous Article 10 (expropriations) and Article 15 (disputes between Canada and China) are for Canadian businesses and investors. Canadian investments and businesses in China will be at the mercy of a Chinese legal system if and when their businesses are expropriated. Of even greater seriousness is Article 15, which removes access to the courts to settle disputes. This is an affront to Canadian sovereignty. It also deprives Canadian businesses and investors from access to one of the world's most respected and transparent legal systems.

Finally, FIPPA undermines Canadian environmental protection laws and hobbles our sovereign right to make such laws in the future. The problematic language is found in Part D, Article 33, Section 2: "Provided that such measures are not applied in an arbitrary or unjustifiable manner, or do not constitute a disguised restriction on international trade or investment …."

The section then goes on to say either party can maintain existing measures or adopt new measures, including environmental measures. ("Measure" is defined in FIPPA's definition section to include laws and regulations.)

I can just imagine Canadian A-list corporate lawyers retained by CNOOC at $500 to $1,000 per hour making lots of hay arguing how that provision should be interpreted. You can bet your paycheque it won't be in favour of strong regulations to protect the environment. So, not only could extant laws face reinterpretation to suit the wishes of the Chinese, but writers of future environmental laws could also find themselves needing to consult with the Chinese to ensure such laws are acceptable to them.

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