Northern Ontario MPs weigh in on Canada-China FIPA

On Sept. 12, Prime Minister Stephen Harper ratified the controversial Foreign Investment Protection Agreement (FIPA) with China almost two years after the terms had been negotiated. The treaty will go into effect on Oct. 1 and last for 31 years.

“Investment agreements provide the protection and the confidence Canadian investors need to expand, grow and succeed abroad,” International Trade Minister Ed Fast said in a news release.

“We remain committed to opening new markets around the world for Canadian companies, including in the fast-growing Asia-Pacific region. This FIPA will create jobs and economic opportunities for Canadians in every region of the country.”

In northern Ontario, the news was met with a polarized response from MP Greg Rickford of Kenora and MP Bruce Hyer of Thunder Bay.

Rickford, Canada’s Minister of Natural Resources and Minister for the Federal Economic Development Initiative for Northern Ontario, recently returned from China where he attended the Asian-Pacific Economic Cooperation (APEC) energy ministers’ meeting.

“We feel very strongly that the Canada-China Promotion and Protection Agreement was absolutely necessary to ensure that Canadian companies doing business in China were treated fairly and benefit from a more predictable and transparent business environment,” Rickford told The Northern Sun News.

“I spoke to my counterpart in China about a couple of specific cases and specific mining companies that are facing real challenges…Canadian companies in China deserve the same type of protection that foreign investors have long had here. So specifically, the FIPA sets out clear rules governing investment relations, including dispute resolutions and protection against discriminatory and arbitrary practices, and importantly, creating a secure and predictable environment to do business.”

Hyer, on the other hand, referred to the FIPA with China as an “unmitigated disaster” that will ultimately cost Canadian taxpayers billions of dollars.

“Some of the problems include that FIPA allows Chinese companies to sue our government for damages if any new law or policy or decision is taken that adversely affects the value of that Chinese company’s assets or business in Canada. And that includes health, labour and environmental restrictions or laws,” said Hyer.

“That’s far more power than any Canadian company has and puts Chinese companies that are operating in Canada at a huge advantage over Canadian corporations. It also means that federal and provincial and municipal governments’ hands are tied when it comes to ensuring that the value added from Canadian resources go to Canadians.”

Hyer points to the Ring of Fire, which is believed to contain one of the largest chromite deposits in the world. Chromite is a key ingredient in the making of stainless steel—of which China is the world’s largest producer.

“If a Chinese company gets involved in the Ring of Fire, and that’s looking quite likely from what I hear, we will no longer be able to say that the chromite extracted has to be processed in Ontario or even in Canada anywhere,” Hyer explained.

“Then there is this secrecy problem. Under other FIPAs documents, the hearings and the arbitrations are open. Whereas in this one, they must be kept confidential at the option of either government, so if either government says they want any arbitration under this agreement to be made secret, they have that right. So that means that Canada can be sued by a Chinese company and pay out billions of taxpayers dollars, and Canadians wouldn’t be able to know why and probably even know that it happened,” Hyer continued.

The discussion on this Canada-China FIPA is not likely to fizzle out anytime soon as Prime Minister Stephen Harper prepares for his visit to Beijing in November for the annual APEC summit.