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This just in: a deal with China

Nov 02 2012

"B.C. is not for sale." - Premier Bill Bennett, 1979, as the province blocked the "foreign" takeover of forestry giant Macmillan Bloedel by Montreal-based Canadian Pacific Investments

"If you're not totally satisfied with B.C., I'll give you double your money back." - Stephen (Slap Chop) Harper, 2013, throwing the door open to China

So, will Canada's super-secret new investment agreement with China really allow Beijing to secretly sue us taxpayers if B.C. blocks the Northern Gateway pipeline?

We're not sure. That's the problem with deals done without scrutiny.

What is being called Canada's most important trade deal since NAFTA could quietly be locked in as early as today, having snuck up on us like the 21st-century emergence of China as an economic superpower (we should have seen that coming, but Seinfeld was on).

Until this week, when other opposition parties climbed on the bus, just about the only politician to notice the agreement - and kick up a stink about it - was Green party leader Elizabeth May, the Saanich-Gulf Islands MP.

The Green party website features the headline Stand Up Against the Sellout to China printed next to a photo of that lone protester staring down the tanks in Tiananmen Square. May says the Canada-China Foreign Investment Promotion and Protection Agreement - or FIPA, as the deal is known - will turn Canada into a resource colony of the Communist regime. If we wake up tomorrow morning and CFB Esquimalt has been restocked with "temporary workers" from the People's Liberation Army, we'll know she was right.

Or maybe the Conservatives, who dismiss the opposition to FIPA as hysteria, are correct - but having slipped this agreement through with about as much public discussion as, say, the B.C. Liberals devoted to the HST, they can hardly be surprised that the alarm bells have gone off.

Canada and China have been working on an investment treaty on and off for 18 years. With China ravenous for Canada's commodities and energy, the deal was concluded in September, its details only being revealed at the end of that month. There was no press release, no debate in Parliament, no announcement.

Proponents say the agreement is little different than the FIPAs Canada already has in place with two dozen other countries, including Russia. Several other investment pacts, including one with India, have been concluded but are not yet in effect.

Such agreements give investors from both countries confidence that they will be shielded from discriminatory treatment, expropriation and the like by the governments of the other. Canadian companies operating in countries with rampant corruption are particularly keen on the protection FIPAs offer. Disputes between governments, or between individual companies and the government, are settled by three-member arbitration panels whose decisions are binding.

Critics say the Canada-China FIPA is different. First, China is an economic behemoth whose investments in Canada dwarf those of Canada in China. Second, the tribunals may be conducted in secret, with Canadian taxpayers not even knowing they are being sued. Third, the companies investing heavily in Canada's resource sector (close to $11 billion last year, and the $15 billion takeover of Calgary-based Nexen pending) are largely state-owned branches of a totalitarian government.

The Greens say Canada could have to pay billions to Chinese companies whose expectations of profits are undermined by the decisions of our courts or of any level of government - federal, provincial or municipal. Effectively, Canada would lose the ability to control the use of its own resources. If, say, B.C. blocks the construction of the Northern Gateway pipeline, and China's investors can persuade a tribunal that that was discriminatory, Canadian taxpayers would be on the hook for compensation.

Other parties have joined in. Thomas Mulcair, rushing in late to the party, threatened that a New Democrat government would revoke the agreement, prompting Harper to refer to him as an "extremist" (a label the Conservatives have taken to slapping on anyone who disagrees with them). How China would react to Canada ditching a deal that is supposed to be etched in stone for 15 years (and 15 more for investors who are already here) can only be imagined.

It all seems too late now, anyway. These are the kind of debates we are supposed to have in Parliament before, not after, major public policy decisions are made. It's called democracy. The Chinese Communists might not know about it, but Harper should.

jknox@timescolonist.com

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