Deal with China under scrutiny

By Manal Sheikh

On Sept. 9, 2012, the Canadian government signed the Canada-China Foreign Investment Promotion and Protection Act, an extensive investment agreement that allows Chinese investors greater access to Canadian markets. The agreement was to be ratified in early November, however, this has been delayed.


The details of the agreement were not shared with the public until the deal was brought to parliament on Sept. 26. Political commentators, journalists, lawyers and concerned citizens have since pointed out the lack of a democratic process in creating the deal. Other concerns were the costs to Canadians, the damage to the environment and sovereignty of Canadian resources.


The creation of FIPPA has been ongoing since the Chrétien administration about 11 years ago. If put into effect, it would bind Canada for a minimum of 15 years. Canada would have to give a year’s notice to get out of the deal.


Mount Royal University academic strategist Sandra Hindson said FIPPA excludes Canadian citizens from the decision-making process.


“The way FIPPA is proceeding leaves me feeling in the dark, not informed or educated,” said Hindson. “I became aware as I spoke to people about the upcoming ratification of this deal and how few people knew about it. It was disconcerting. I question the role of the major media providers — have they fulfilled their mission to inform Canadians of this important government decision?”


There is also confusion regarding what FIPPA promises. U of C business and law professor Robert Malach said the federal government should be clear about decisions that affect the entire 
country.


“It is important for the Canadian government to thoughtfully and clearly define the policy so that foreign investors can have certainty regarding the conditions for investment in Canada,” said Malach. “I think it is important to have those conditions clearly defined before any large investments proceed.”


In addition to the lack of information provided to the public, Hindson said Canadian sovereignty may also be threatened. 


“FIPPA has the ability to challenge environmental laws and regulations, and if a Chinese investment is challenged by government legislation, they can sue us outside of our Canadian court system,” said Hindson. 


The only MP actively opposing FIPPA is Green Party Leader Elizabeth May. 


An advantage of FIPPA for Canada would be an increase of rights for Canadian businesses in China. 


“State-owned entities should expect a higher level of scrutiny for a number of reasons. There should be some degree of fair play involved and our government should factor in state-owned investors’ rules in their native land to see if Canadian investors are treated equivalently in those jurisdictions,” said Malach. “If Canadian investment is not as easily welcomed in that jurisdiction, then I believe that gives Canadians an opportunity to diplomatically discuss reciprocity.”


Hindson said the affects FIPPA will have on Canadian businesses over the next few decades should also be considered. 


“We want to know that Canadian rights are being protected. Harper’s government has been under incredible pressure from the oil industry to get other markets for Alberta’s oil. We now have foreign corporations with rights and privileges developing the tar sands at an unprecedented rate that does not allow for adequate environmental assessment,” said Hindson. “The industry has grown too quickly, and so we have external pressures to find solutions made in haste.”


Hindson thinks the government should be prudent before agreeing to deals like FIPPA. 


“We need to go through the debate process, step back, take our time, understand the implications and consequences of this kind of agreement. We need to have the government be transparent about both the positives and the negatives,” said Hindson. “The next generation is vulnerable to an increasing tax burden due to the potential of growing litigation fees and penalties to American and foreign investors.”


Malach said parts of FIPPA are vital for economic growth because foreign investment is such an important part of the Canadian economy.


“I support our government’s efforts to look at foreign investment in these contexts. I would encourage students to thoughtfully think about these issues and to support our government’s efforts to define a policy that balances economic growth while protecting our national interests in the long and short term,” said Malach. “I would encourage students to create a constituency of well-informed voters that influence public policy.”


Hindson advises students to get involved, vote and write concerns to the federal government and local MPs. 


“Questions are more important than answers. Think critically, ask yourself the hard questions — it’s part of the quest,” she said.


Second-year U of C nursing student Jelena Vukosavljević said the agreement will negatively affect Canadian sovereignty.


“I think that allowing communist China to become directly involved in our natural resource industry would have negative implications on us and our domestic market by jeopardizing our sovereignty,” she said.


Fourth-year U of C biological science student Anna Golovaneva said foreign investment can be beneficial, but all factors must be considered.


“It’s a good thing that foreign investors like China want to invest in Canada, but the policy makers should assess every detail to make sure the deal is good for Canada as a whole,” said Goloneva. “They will have to find ways to minimize the negative impacts while not exaggerating positive impacts.”