That, in the opinion of this House, the government should inform the Government of the People's Republic of China, that it will not ratify the Canada-China Foreign Investment Promotion and Protection Agreement.
He said: Mr. Speaker, I rise today to move a motion on behalf of the official opposition, the New Democrats, to direct the Government of Canada to inform the Government of the People's Republic of China that it will not ratify the Canada-China foreign investment promotion and protection agreement. In doing so, I rise proudly in the knowledge that we are discharging a profound responsibility to this chamber, to Canadians and to our country.
This FIPA is critically flawed in a number of ways and, if allowed to proceed in its present form, will do serious damage to Canada. In fact, in view of the very serious concerns raised about this deal by international trade experts and others, it would be absolutely reckless for the government to proceed to ratify this treaty. Indeed, I believe that many members on the government side are aware of the dangers this deal presents to Canadian interests and are troubled by the agreement's violation of core Canadian values.
I say this because even though the government has been in a position to implement the treaty for over five months now, it has declined to do so. While there may be several reasons for this delay, I believe that one of them is the distinct awareness that this deal is bad for Canada, fails our businesses, threatens our economic interests, violates our democratic processes and puts our taxpayers at risk.
Before proceeding to outline these flaws and shortcomings in detail, I would like to set forth some general principles that the New Democrats hold when it comes to this issue.
New Democrats believe in the importance of engaging with diverse economies and emerging markets. We support the development of clear rules that give confidence to investors, create level playing fields, preserve democratic policy-making and are transparent and accountable to Canadians. We believe in trade and investment policies that promote and protect Canada's interests.
With respect to China, we believe that Canada should deepen and broaden our economic relations. China is the second-largest economy in the world, it is in ascendancy and there are many opportunities for mutual benefit and synergies between our two nations. Developing a rules-based framework that improves the investment and economic activities in both countries is desirable and necessary. With careful negotiation, it is also achievable.
New Democrats know that an investment agreement done well has the potential to be of great benefit to both countries. However, a deal that is poorly negotiated risks doing great harm. Because the Conservatives have taken an extreme ideological approach to negotiating and ratifying trade and investment agreements, they have concluded a carelessly and poorly negotiated deal. Put bluntly, this FIPA will do harm to Canada's economic interests. Canadians deserve better.
Let me start, then, with a summary of the problems with this FIPA.
It ties the hands of Canadian governments at all levels—municipal, provincial, federal and first nations—and restricts them from taking legislative measures in the public interest. It exposes Canadian taxpayers to huge liabilities and multi-billion-dollar lawsuits by foreign corporations if they feel that public legislation affects their profit expectations. It is imbalanced and lacks reciprocity for Canadian investors. It does not help Canadian investors effectively break in to China's markets. It puts at risk Canada's vital natural resources, including those in strategic areas such as energy, and allows these assets to be controlled by foreign state interests, including state-owned enterprises that serve foreign state interests, not commercial ones. It contains an unaccountable dispute resolution mechanism that allows China or Canada to hear lawsuits involving taxpayers' money outside Canadian courts and in secret: no public access, no public disclosure, no media, no transparency and no accountability. It subordinates our environment to corporate interests and puts legislative efforts to protect our land, air and water at risk of being struck down by corporate lawsuits.
It was passed by the Conservatives with no consultation with provinces, first nations, trade experts, business, labour or the public. Outside of this one day called for by the New Democrats, there has not been a single minute of democratic debate after 18 years of negotiation. Once ratified, this FIPA will lock Canada into these damaging terms for a minimum of 31 years.
This is a major economic initiative, and contrary to repeated Conservative misstatements, a deal that raises concerns unlike any other. It concerns billions of dollars of investment. It is the first time since NAFTA that Canada has signed an investor protection agreement with a country that is a major investor in Canada. Unlike virtually every other FIPA Canada has signed, China is a major capital exporting nation with massive foreign currency reserves.
Let us look at the numbers. Chinese investment in Canada hardly registered in 2007. It was too small to record. In 2011, it was $11 billion. In 2012, it doubled to $22.5 billion. According to the Conference Board of Canada, China is projected to be Canada's number two foreign investor in Canada by 2020, exceeding $50 billion a year. That is in seven years.
Before the $15 billion CNOOC-Nexen takeover, Chinese state-owned enterprises, such as PetroChina, Sinopec and CNOOC, had already invested over $10 billion in the Canadian oil and gas sector and controlled more than 7% of Canada's oil sands interests. Today, over $25 billion of Canada's oil sector is controlled by China's state-controlled firms.
Let me quote an economist, Wendy Dobson. She said, “There is a tidal wave that is heading out of China in the next decade and I don't think we're ready for it”.
She estimated that this tidal wave amounted to more than $1 trillion of investment worldwide to acquire access to resources and technology. Yet this deal, which will involve those sums of money, was rammed through this Parliament without any study, debate or vote.
On October 23, as official opposition critic for international trade, I presented a motion to the Standing Committee on International Trade to conduct a study of the agreement and to call a varied list of Canadian stakeholders to committee to provide their views. Conservatives refused to even debate that motion in public. No study was agreed to.
On October 31, the NDP member for rose to request an emergency debate on the FIPA. That request was denied by the government.
On October 2, 18, 24, 25 and 31, members of the NDP rose in question period to request that the FIPA be properly studied by a parliamentary committee. Each time, the Conservatives refused even to address the merits of the question.
Through Leadnow, some 80,000 Canadians have sent messages to the government voicing their concerns about this FIPA and requesting proper study and prudence. Just yesterday, in one day, I received over 17,000 emails after this motion calling for this debate was made public. That was in 24 hours. Despite all of this widespread concern and opposition, the Conservative government has refused to bring this FIPA forward for debate, study or vote.
I want to turn to some of the details of why this FIPA is so dangerous and poorly negotiated. I will turn first to natural resources.
This FIPA requires Canada to award national treatment to investments made by Chinese firms once established in Canada. This paves the way for a massive natural resources buyout and foreign-state expansion of ownership in our economy. For example, I have referenced CNOOC's recent purchase of Nexen, which was approved by the Conservatives. Under the FIPA, if CNOOC wants to expand by buying up other oil interests, it can, and it must be treated by this FIPA as if it were a Canadian company. Any attempt by any government to limit this expansion may be met by a lawsuit claiming damages for unequal treatment.
There is a loophole in this FIPA: non-producing oil properties are not subject to Investment Canada Act review. This means that when oil reserves are present, but drilling has not yet commenced, those oil leases are not subject to any kind of review and therefore would qualify under this FIPA for national treatment.
This FIPA will place Canada's strategic oil reserves, and in fact strategic sectors beyond oil, into the hands of foreign states and state-owned enterprises that do not operate as purely commercial businesses but rather would serve the interests of a foreign state. This locks us into a dangerous path of foreign ownership and resource extraction until at least 2044.
Canadians are opposed to this. Canadians want a national conversation and a policy that makes responsible choices for the wisest long-term stewardship of our natural resources in Canada.
This deal is unbalanced. First, this deal allows both parties to maintain their current non-conforming measures. This means that both countries commit to not implementing any new discriminatory barriers to each other's investors in the future, but the agreement allows both to keep any existing non-conforming measures.
Here is the problem. China has been and is a command economy. It has many non-conforming measures. These include requiring foreign investors in China to partner with local Chinese enterprises, to use local suppliers and to source local goods and services. Anyone who has done business in China is well aware of these requirements. However, Canada, which has been on a trade liberalization trajectory for the last 30 years, has largely eliminated such requirements. The result: Canadian investors are at a major disadvantage. This deal fails to secure reciprocal and equal access to China for Canadian investors.
When I asked DFAIT officials at committee for a list of China's non-conforming measure, they first said that they did not have them, then they said that they were on the website, and then they said that they were not sure. The government has signed an agreement allowing China to keep non-conforming measures in place that bind Canadian investors, and it cannot even tell us what they are.
In addition, this deal fails to include Canada's pre-establishment rights model, which grants protections to both existing investors and those seeking to invest. Instead, the Conservatives have acceded to the Chinese model, which provides very little protection to prospective investors compared to existing ones. The result: again, imbalance against Canadian investors. Why? It is because relatively speaking, Canadian investment in China is a relatively small $4.5 billion. In 2012, China had five times that amount invested in Canada, and it is growing exponentially.
As Paul Wells wrote last September, when this deal was released, quoting an investment analysis: “It will be interesting to see if this is spun as an agreement that 'liberalizes' or opens markets for Canadians. If it is, that will not be true”.
Canadian companies need and deserve an agreement that helps remove the barriers that are keeping them out of Chinese markets. The simple reality is that this FIPA fails to provide effective tools to challenge the protectionist barriers the Chinese government has at its disposal to block new foreign investment in the profitable sectors of its economy. For certain, access to sensitive areas of the Chinese economy by Canadian investors has been restricted, while Canada has thrown the doors wide open to firms from China.
This deal will also expose Canadian taxpayers to expensive litigation and billions of dollars in damages. This FIPA provides a mechanism to Chinese companies to sue the federal government if they feel that Canada has passed regulations or policies that they feel amount to unfair treatment or that interfere with their expectations of profits or future expansion.
Foreign corporations can sue Canadian governments and cost Canadian taxpayers billions of dollars. I would like to emphasize that this is not the Conservatives' money; this is Canadian taxpayers' money for enacting laws that protect our energy security, environment, jobs or public health.
This is not a hypothetical concern. Chinese state-owned insurance company Ping An sued Belgium for $3 billion in damages after its profit expectations were not met after the European recession. Canada has been forced to pay damages exceeding $157 million to U.S. firm AbitibiBowater following the Newfoundland government's decision, after the company closed its pulp and paper mill, to reclaim the water and timber use rights it had provided. An investor state tribunal has now ruled against the Government of Canada in another case, because the Newfoundland government tried to get foreign oil companies to invest a certain amount in local research and development to create good jobs in that province. The amount of damages that have to be paid has not yet been released.
Other lawsuits have been filed challenging Quebec's decision to place a moratorium on fracking, Ontario's offshore wind power policy and the Canadian court's invalidation of a drug patent.
In short, this FIPA provides protectionist policies for foreign corporate profits and not for the well-being of Canadians, our economy or our environment.
As the South African government put it, “Investor-state dispute resolution that opens the door for narrow commercial interests to...matters of vital national interest” is a direct challenge to “constitutional and democratic policy-making”.
Let us hear it from the horse's mouth. Here is what one of the international arbitrators himself had to say about the exact type of clause contained in this FIPA:
When I wake up at night and think about arbitration, it never ceases to amaze me that sovereign states have agreed to investment arbitration at all. Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.
That was Juan Fernández-Armesto, an arbitrator from Spain.
Canadians do not agree with this.
All 50 U.S. states, every one of them, have passed resolutions opposing the application of investor state dispute resolution mechanisms in their jurisdictions. They did it last year again.
Let us look at the investor state dispute mechanism in this particular FIPA. This deal changes Canada's long-standing policy of ensuring public access, public disclosure and transparency in arbitrations. For the first time in Canadian history, the Conservatives have agreed to a dispute resolution procedure that violates the Canadian tradition of open courts at the whim of three arbitrators who have no responsibility or accountability whatsoever to Canadians.
I thought Conservatives did not like unelected judges overturning democratic decisions by elected officials. However, in this case, they cannot help but trample down the door and give over sovereignty to three unappointed, unaccountable, world legal arbitrators to overrule decisions made in this Parliament. That is undemocratic and indicative of Conservative principles.
These panels lack the standards and safeguards that apply to judges in Canadian courts. There is no security of tenure for arbitrators, raising concerns about their ability to be impartial. There is no prohibition on arbitrators being paid for non-judicial activities, giving rise to apprehensions about bias and conflicts of interest. Worst of all, these hearings can be conducted in secret, and documents can be hidden from the public.
I have heard a lot of dissembling from the government, so I am going to read for Canadians exactly what the FIPA says in article 28. It states: “Where a disputing Contracting Party”—that is the sued state—“determines that it is in the public interest to do so...all other documents submitted to, or issued by, the Tribunal shall also be publicly available”.
Here is the next clause: “Where...a disputing Contracting Party”—that is the state being sued—“determines that it is in the public interest to do so...hearings held under this Part shall be open to the public”.
If China determines that it is not in the public interest to do so, at its sole discretion, hearings are not open to the public and documents need not be disclosed. What a violation of Canada's tradition of open courts, where Canadians can see justice done when their money is on the line.
Canadians can decide for themselves when Conservatives stand up and say that these hearings will be held in public. I read it right there in black and white.
Interestingly, Canada has made 16 claims through NAFTA's ISDS mechanisms, mostly against the U.S., and we have never won a single case. Neither the U.S. nor China, on the other hand, have ever lost an arbitration brought against them by another country.
I want to talk about the environment a bit. I want to read a section of the FIPA, as well. One would think that when Canada negotiates a deal on corporate interests, it would make sure that nothing in that agreement would inhibit the ability of Canadians governments to protect the environment. Here is what the clause says:
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, nothing in this Agreement shall be construed to prevent a Contracting Party from adopting or maintaining measures, including environmental measures: (a) necessary to ensure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement
What does that mean? Why do they not just say that nothing in the agreement would prevent any Canadian government from taking any measure to protect the environment, period. That is what the Conservatives could have said. They did not.
The government failed to consult. Wise governments consult, especially when important issues involving Canada's economy, resources and policy-making freedom are at stake, and especially when we are talking about profoundly large deals that would bind Canada's interests for the next three decades.
Canadians want us to be prudent, cautious, informed and intelligent, yet after 18 years of negotiation, the Conservatives have announced this FIPA as a fait accompli, take it or leave it, without conducting a minute of consultation. Predictably, the Conservatives have been taken to court by a first nations lawsuit that was filed on January 18 because of this lack of consultation.
In conclusion, no rational government that cares about Canada's economic interests, democratic policy-making, and citizens' interests could possibly stand beside such a flawed agreement. No prudent government that is sincerely concerned about Canada's future generations, resource security, and environment could possibly defend this FIPA in its current form. No responsible government could defend an agreement that has taken 18 years to negotiate, that would bind Canada for 31 years, and that would affect billions of dollars of investment without proper study and input from Canadians.
Canadians want and deserve a well-negotiated agreement with our trading partners, including China. Let us take the time to ensure we secure such an agreement.
I urge all members of this House to support this prudent, thoughtful, and wise motion.
Mr. Speaker, this opportunity to debate the motion by the member for gives me a bit more time to expand on some of the ideas I have on his motion and on the lack of time in questioning. Let us be clear and let us try, in the interests of openness and honesty in this place, to lay out the parameters of what we are actually discussing.
I have heard a lot of talk about the inability to debate this in the House. Of course, the hon. member would know that, prior to the Conservatives' coming to government in 2006, there was no ability to debate treaties, not just investment treaties but any treaty in the House. We debated free trade agreements because that is legislation, but there was no ability to debate treaties. We changed that law to allow treaties to be debated. Since coming to power, we have signed FIPAs with 11 countries: Iran, China, Czech Republic, Jordan, Peru, Kuwait, Latvia, Madagascar, Mali, Romania and Slovakia. Apparently, none of those were worthy of debate; they are basically all the same format.
Some hon. members: Oh, oh!
Mr. Gerald Keddy: I hear a lot of squealing from the opposition benches, but they are all the same format and basically all the same agreement. None of those were worthy of debate, but somehow this one is different.
Now let us expand on the debate a little further. It was tabled in the House on September 26, 2012. This is the 17th opposition day, not the first or the second or the third, that the official opposition has had to debate this treaty. I will forgive the Liberals on this one because they said from the beginning that they are going to support the treaty, so they do not need to debate it in this House. However, there is an opportunity to debate this treaty in this House. This is the opportunity. It is the 17th item on the NDP list of priorities. That is what we are dealing with here, nothing more and nothing less.
Let us just stop for a second, and look at how this treaty unfolds and how it would actually work for Canadian investors. The key message with this foreign investment promotion and protection agreement, and with all the rest of them, is that it is about rules. It is about rules-based investing, in the same way as we have rules for rules-based trading. Anytime we have rules, we know exactly what the parameters are, we know exactly what we are getting into when we make an investment and we can make that investment with some surety.
We made a promise to Canadians when we formed government in 2006 that we would provide jobs, prosperity and opportunity. Of course, with the downturn in 2009 that became more difficult, but Canada is still in an enviable position with our economy compared to all the other economies in the world.
To come back to this FIPA for a moment, what we are dealing with here is a foreign investment promotion and protection agreement with the second-largest economy in the world. Yes, it took 18 years to negotiate and that is no mean feat, and I give some of the credit to the former government that started it for the right reasons. However, our government finished it, and we put it into place because we need this investment agreement to deal on equal footing with the Chinese, for Canadian investors investing in China. They need this protection much more, I would argue, than Chinese investors investing in Canada. However, there is a little thing that the New Democrats obviously do not understand and that is called “reciprocity”. When we have a set of rules, we have to offer that same set of rules to the partner in the agreement.
This agreement was signed to protect Canadian investors in China through stable, predictable rules and protection against discriminatory and arbitrary practices. Opposition members can try to make it more complicated than that, but it is no more complicated than that. It allows predictability. It allows transparency, and there is transparency and public access to any arbitration. The idea that there is not is simply incorrect. All of the hearings, all of the paperwork, will be provided to Canadians upon request, and there will be transparent public access to the dispute settlement procedures.
I am going to get off this topic and talk about trade a little bit, because it is all one and the same. What we have is a party that is anti-trade and now it is coming out to be anti-investment. For businesses looking to set up in China, the Chinese could not treat a Canadian company less favourably than they would any other foreign company looking to do the same thing. Once an investment is made, a Canadian business could not be treated less favourably than any other business, including Chinese businesses.
I really cannot comprehend the opposition to this treaty. We are creating a secure, predictable environment for Canadian investors, and we are not doing any more than that. There is nothing hidden here. This is about opportunity for Canadian investors in China. This is about equal footing and reciprocity for Chinese investors in Canada. We are dealing here with the world's second-largest economy with arguably the largest reserves of foreign currency of any nation in the world, and we are hearing from the official opposition members that we do not want to trade with China, and I do not know where they expect this country to go.
I started to articulate my opposition to their line of questioning on the favoured nation status for imports coming from China or exports from China to Canada. I think we have to draw them together. For the public listening to this, here is the dichotomy. On one side of the equation, the official opposition is against rules-based investing and rules-based trading apparently with China, and on the other side of the equation, the official opposition asks that China, the second-largest economy in the world, remain on the preferred nations list. That list of 72 nations was put together for emerging economies, nations and people living in poverty, to give them an opportunity to get out of that situation and to move from an emerging economy to a mature economy.
Most people would argue that China has done that. So have India, Brazil and a number of other countries that were on the list. They no longer have a preferential tariff coming into Canada. They are now on equal footing with Canadian companies. They do not have that advantage. This is one and the same. We are talking about the same issue here. I find it bizarre that the anti-investment position the NDP takes is the same anti-trade position it takes. Since we formed government in 2006, we have been opening up trade. We have been trading with countries around the world.
We continue to get static from the official opposition and sometimes from the Liberals, though the Liberals tend to at least say they believe in free trade. We saw a number of trade agreements, and it is as if trade and investment do not account for anything in Canada. It accounts for one out of every five jobs and it accounts for 64% of Canadians' annual income. That may not be important to the opposition parties, but it is certainly important to us.
The Liberals were in power for 13 years and they signed three trade agreements. One of them was an extension of NAFTA, which they were going to get rid of but could not, because it was too important. They saw the error of that and they changed their ways, which I appreciate, because governments are sometimes forced into positions they did not originally take.
We are continuing to negotiate deals around the world. We are working on a free trade agreement with India, and we are working on a free trade agreement with Japan. At committee, we have been discussing the Pacific alliance, although again, the NDP and the Liberals do not want to discuss that agreement and its potential. Here is their logic and it is not unlike their logic with the FIPA with China: It is not important. It is not important to Canadians and it is not important enough for us to take our time to conduct even a precursory study or to take even a brief glance at it, to see if it is worth pursuing.
When we look at the real numbers in that agreement—and it is no different from the position they are taking on the FIPA with India—we have Chile, Peru, Colombia and Mexico. We have already got bilateral agreements with those countries and we have already got a very good trading relationship with them, but those countries put together make up the ninth-largest trading bloc in the world. The answer we get from the opposition is that it does not want to study this. It does not want to look at it, it does not want to talk about it or think about it because it is not important.
What is important? The opposition does not want a foreign investment promotion and protection agreement with China, because it is not important enough. The second-largest economy in the world and a growing and dynamic nation that we need to do greater business with, and we will continue to do greater business with, is not important enough. The opposition is not going to support the CETA, the comprehensive economic trade agreement with the European Union, because it is apparently not important enough. The NDP does know about that. There were 28 countries on July 1. The official opposition does realize the importance, I would hope, of this; the ability for Canada to expand with traditional trading partners and form potentially one of the most, if not the most, important trading bloc in the world.
Canada, with 33 million people, would sit between the United States, with 330 million people and an affluent economy that is starting to rebound, and the European economy, which even though it is struggling has 500 million consumers and is one of the wealthiest economies in the world. Canada, with 33 million people and goods, services and talented workers to offer those economies, would be between those two huge economies in an enviable position to any nation on earth, and all we get from the opposition, in place of support, is condemnation.
I cannot understand that for the life of me. Perhaps we are going to see some type of an epiphany on behalf of the official opposition. Perhaps it is going to change its ways. Perhaps it will begin to embrace investment and trade.
I have seen nothing to assure me that this will occur. First, we really have to look at our position on investment, which we have discussed. Second, we have to look at our position on trade and our rejuvenated global commerce strategy, which allows Canadian goods, services, talent and investments to be spread around the world. In our own hemisphere, we have to look at our Americas strategy and the importance of that Americas strategy to many of our provincial manufacturers that, by looking at the Americas, and not just the United States and Mexico but also looking at the Caribbean, Central America and South America, are able to invest in real time, in their own time zone, not talking to somebody 10 or 11 hours away, in the western hemisphere.
We will continue that strategy. We will continue the Americas strategy. We will continue our strategy for the Caribbean. We will continue a global commerce strategy, because it is good for Canadians, for manufacturing and for workers.
The NDP record deserves to be discussed because it has brought forward the motion. It is 17th in the NDP list of priorities. The NDP had 17 oppositions days to debate this, but chose not to do so. Now all of a sudden it is a priority.
I believe it has become a priority for the NDP because it was hoping that by holding back there would be some kind of groundswell of support. That did not occur. The hon. member said that he had 17,000 emails, but I do not know if that 17,000 emails is 1,700 emails sent 10 times or if it is 170 emails sent 100 times. I certainly received some of those form emails. It was a matter that someone forwarded it to someone else, and then it could be forwarded to a member of Parliament. I had emails that had reasonable, responsible concerns that were easily addressed.
Let us take a look at the NDP trade and investment record and at what the New Democratic Party is actually saying. Page 18 of the NDP policy book states, “New Democrats believe in renegotiating the North American Free Trade Agreement”. That is incredible. The trade critic, the member for , said that he would not support a free trade agreement because trade unions did not want it. Those are his words, not mine. I am just reading it back.
The former NDP trade critic from has said that he supports the efforts of big union bosses to stop any further trade negotiations with Korea, Japan and the European Union.
Are we to become isolationists? Are we to withdraw? Are we to lose that slight advantage that we have over other countries in the G7, the G8 and the WTO?
These are difficult times. The world is truly at a crossroads. The economy is struggling. We have never said anything else. However, we are better off because of prudent fiscal management than all of our neighbours.
Let us look at some more quotes. I only have a minute left and I want to get these on the record.
The former NDP trade critic from described the free trade agreements as “job destroying”.
The member for said that trade agreements threatened the very existence of our nation.
The member for said that the Conservative government told them that free trade was good for all of us, and he begged to differ.
The former critic from even said in the House that free trade had cost Canadians dearly.
I ask Canadians to use some common sense. There is nothing hidden here. There is nothing untoward. This is a straightforward investment agreement that would allow Canadians investing in China to do so with assurance and would offer the same rights to Chinese investors in Canada.
Mr. Speaker, I will start off by stating what the parliamentary secretary did not say in response to that question. Yes, the FIPA with China and Canada is similar, but it is certainly not the same.
We are dealing with what is now or will be the biggest economy in the world, and we are also dealing with state-owned enterprises. There is a lot of difference in terms of the China agreement, and some other countries have recognized that and have put in specific safeguards in their own country's interests on SOEs. They have done it in a way to protect their own interests and still have a foreign investment protection agreement. That should be added to the parliamentary secretary's answer.
I am pleased to speak to the motion, but I want to point out a few facts as I begin. What the motion really shows in this place is the extreme position of both the Conservative government and the NDP opposition on major issues that affect Canadians.
On the one hand we have the Conservative government that will sign any deal just to get a deal, just to get the number. It will sign basically anything, regardless of the long-term consequences on Canadians.
On the other hand, we have the NDP, which seems to oppose any trade or investment treaty, and leaves us with the impression that the NDP position is anti-trade in its approach to the economy. That kind of thinking belongs in the early 20th century, not today.
We have the two extremes. What the Liberal Party wants to do is find the balance. That is why, as I said earlier in a question, we will not be voting for the NDP motion because we really think what we should be doing is holding the proper hearings. We cannot just throw out an investment treaty that has some flaws in it. We need to fix the flaws. That is really what we need to be doing.
In order to do that, and the parliamentary secretary can say all he likes about the fact that there were seven opposition days and more—
Hon. Wayne Easter: —seventeen, but the government has a responsibility. All parliamentarians have a responsibility to come up with the best agreement for Canada that we can come up with.
The problem with the government is that it either denies debate or limits debate, so that the proper hearings cannot be held across the country, and in this case globally, I would submit, to find the best solution for Canadians on an investment treaty with China, to fix those flaws.
That is where we want to be. We want to ensure the facts are laid out, both the good points and the bad points, so that we can fix the flaws in this particular agreement to ensure that it is best for Canada.
The facts are these: Foreign investment protection agreements are important for Canadians investing abroad, as well as businesses here at home. While the Canada-China FIPA contains several flaws that raise serious concerns, completely abandoning the treaty is not the answer to assist Canadians and Canadian businesses in dealing with investments and trade issues with China, which is a major player in the world.
Second, a better opposition day motion would have toned down the anti-foreign investment and trade rhetoric by highlighting the areas that require improvement, and I hope I can do that through the course of my remarks.
There is no question that the Canada-China foreign investment protection agreement needs to be improved, but not completely discarded.
The Liberal Party has raised concerns about provisions in the Canada-China investment agreement, particularly on issues of transparency during arbitration, termination of the agreement and the length of time the agreement is in force. Liberals have consistently called for a public debate on the issue, not on a motion such as this but a real debate where the treaty is actually laid out. I would submit that beyond that, we need to be bringing in witnesses, going to see businesses, some in favour and some opposed, to see the implications from their perspectives.
Unfortunately, the government has failed to take responsibility for this treaty and has blocked discussion on it, creating a vacuum that has been filled with misinformation and fearmongering. That really concerns me because there are two major extremes, and that is causing a lot of dissension toward the agreement. Indeed, if the government had the will, the FIPA could be fixed.
It is important to keep in mind that the only briefing ever provided to the Canadian public and Parliament came about as a result of a motion presented to the international trade committee, at which government officials were permitted to speak for a single hour. The minister never went before committee on this issue. By way of a motion that the government members were too embarrassed to defeat, officials were before the committee for one single hour. Does anyone think that on an investment treaty this broad that is enough time to debate the issues and get some answers? I certainly think not.
From what we know, the key issues surrounding the Canada-China FIPA are these: one, transparency in terms of public awareness of disputes; two, federal liabilities for provincial decisions based on the Constitution; three, restrictions on investment and joint ventures in China, restrictions on what industries Canadians can invest in in China vis-à-vis what China investment companies and state-owned enterprises are allowed to invest in in this country; four, security concerns raised by both CSIS and United States security agencies; five, energy investments such as CNOOC and national treatment on further investments. Those are the five key areas about which there are concerns. To a great extent, if the government had the will to allow itself to debate the issue, many of those key issues could be solved and we could have an investment treaty that in fact works. Let us not just throw it out, but let us also not just do as the government does and sign it because it is under a bit of pressure.
Let me come back to each of the issues. On the transparency issue, in terms of disputes to be resolved through arbitration, officials told the committee the following:
...it is Canada's long-standing policy to permit public access to such proceedings. Canada's FIPA with China...will allow Canada to make all documents submitted to an arbitral tribunal available...subject to the protection of confidential business information.
Later in the same testimony, we found out Canada has little to do with it. In response to the question that stated that FIPA means that “China...does not have to have public hearings and does not have to disclose documents if they don't want to”, the response from officials was, yes, that was correct.
On the transparency issue, I am saying that officials, in that single hour of testimony we had from them in questions, admitted that there is an entirely different situation related to transparency on disputes that has to occur in this country versus the transparency that has to occur for Canadian investors having a dispute on the China side of the equation.
When asked if the government has done an economic impact assessment of the agreement, something that has been done for all the FTAs, which has been used as the basis of defending them, officials confirmed that no such analysis was undertaken or apparently attempted. That is a serious issue, when we have the Government of Canada undertaking a major international agreement, which any of us who have read the document and the timeframes know is basically locked in for 31 years, and the government has not done a cost-benefit analysis. That is just about unbelievable, but in fact it is true.
The second major concern that I raise was a termination clause. In other FIPAs, there is usually an easy mechanism to end the agreement early if the agreement does not end up providing Canadians the protection it is supposed to. This agreement remains in force indefinitely, and the exit mechanisms generally consist of a six-month or one-year notice and then the exiting investments remain in force for a period of a certain number of years that would be spelled out.
For example, under NAFTA, which is a major agreement, a party may withdraw six months after it provides written notice of withdrawal to the other parties. If a party withdraws, the agreement shall remain in force for the remaining parties. In our agreement with Lebanon, there is a one-year notice for termination, and then existing investments remain in force for some 20 years. In Jordan, it is the same thing; there is a one-year notice of termination, but the existing investments would remain in force for 15 years. In Argentina, it is much the same.
However, and this is the point I raised earlier, the parliamentary secretary said that this FIPA with China is the same, but it is not the same in many respects. It is similar, but with many different qualifiers around it. With China, this agreement is not indefinite until termination notice. In other words, we are locked in for an initial period of 15 years, which is unprecedented in terms of these agreements. Then it can be terminated on one year's notice and existing investments remain in force for another period of 15 years. Hence, that is where we get the 31-year agreement point that many people keep citing. This is a departure and locks us into the agreement, regardless of whether it ends up providing Canadians the protection it is supposed to.
The third point of concern is federal liability for provincial decisions and the constitutional impact. At the international trade committee on October 18, 2012, in response to the direct question, “Would this FIPA subject provinces to claims for damages as a result of this legislation if a Chinese investor believed that provincial actions had violated this deal?” officials responded, “No, it doesn't subject provinces to any claims. The federal government is responsible. The federal government would be accepting all obligations”.
That is something we seriously have to consider. If a province makes a decision, and a Chinese business is upset because it believes that it has future lost profits as a result, and it wins the case, the federal government is responsible for all those obligations. The federal taxpayer could end up having to pay for those obligations.
That is key. That is not different from some of the other trade agreements. I recognize that. However, we should go in with eyes wide open and look at whether there is any way of limiting that liability to the federal taxpayer as a result of provincial decisions, for whatever reason they are made.
The fourth area is restrictions on investment in China and on joint ventures.
During the briefing by officials at the international trade committee, the following was stated:
Some sectors are completely off limits to foreign investment, such as mining of certain minerals. In other sectors, foreign investments are restricted or “encouraged”, meaning that they are subject to foreign equity caps or requirements for Chinese control or joint venture arrangements.
The official went on to state that this agreement:
will support Canadian businesses' efforts to explore the growing investment opportunities in the world's second-largest economy across a range of key sectors, including financial services, natural resources, transportation, biotech, education, information technology, and manufacturing.
Further to this point concerning restrictions with China, and to the point the raised in the House on October 23, 2012, regarding reciprocity, the following should be noted from the U.S.-China Economic and Security Review Commission report of 2012, which states:
The Chinese government identifies “oil and petrochemicals” as one of seven strategic industries for which the state must maintain “absolute control through dominant state-owned enterprises.”
As such, foreign companies are not permitted to participate in China's domestic strategic industries, except through joint ventures.
There we have it. There are different rules for our investments in China versus its investments here. We need to be looking out for those pitfalls in terms of this particular agreement.
The point is that state-owned enterprises in China are designed in such a way as to enhance total economic endeavours and the foreign, political and trade policies of China. We need to recognize that up front. That is not necessarily a bad thing, but we need to go in with eyes wide open and ensure that we protect ourselves from any problems that may occur as a result of that strategy.
I would like to move that the motion be amended by replacing all the words after the words “China that” with the following: prior to any decision and the ratification of the Canada-China Foreign Investment Promotion and Protection Agreement, the said agreement should be referred to the Standing Committee on International Trade to conduct hearings across Canada and report back its findings and any recommendations to amend the agreement to the House.
Mr. Speaker, in starting I would like to say that I was very disappointed, having been in this House now for nine years, to see the Liberal Party yet again siding with the Conservatives.
I have been in Parliament nine years, and hundreds of times, when push comes to shove, when Canadians' interests are at stake, the so-called new Liberal Party seems to be exactly like the old Liberal Party, always siding with the Conservatives, always siding with the .
I would just like to share my disappointment, because I know that this is an important debate. The member for , in his very eloquent speech, spoke of thousands of emails flooding in from across this country on this important debate. We have received tens of thousands of emails, letters, cards, and phone calls from Canadians who are very concerned about the Canada-China FIPA and its implications for Canada.
I would like to say at the outset that on this side of the House we are resolute fair traders. The NDP has always stood for fair trade, that means a rules-based system that is balanced and well-negotiated and serves both parties.
In the NDP caucus of 100 strong members, we have many members of Parliament who have actually worked as negotiators in the past. They have represented the interests of their side in negotiations. What we have seen before in the Liberal government and most certainly now under the Conservative government is governments that seem incapable of negotiating strongly for Canada's interests.
I would just like to say on behalf of the NDP caucus that when we come to power in 2015, Canada's interests will finally be effectively protected. Canadians can know for sure that we will have tough Canadian negotiators who will always stand for Canada first and will always be capable of negotiating fair trade agreements.
I just want to mention in starting off that I will be sharing my time with the very eloquent member for who has just reminded me of that point. I look forward to her speech. She will be speaking particularly to the consultation that was not done on the Canada-China FIPA, and will also be referencing the lawsuits that are starting to emerge because of this badly botched negotiation.
Let us start with the Conservative approach to trade. Let us start with the record. The member for very eloquently set it out. We have the worst trade deficit in our nation's history, and this is after seven years of Conservative government. So badly have they botched negotiations, so badly have they been in terms of defending Canada's interests, that the Conservatives have taken Canada into the worst trade deficit in our history.
This is something the Conservatives were trying to explain, badly, quite ineptly, just a few minutes ago, that somehow that was due to international conditions, that somehow it was somebody else's fault. It is the worst government in Canadian history for trade deficits, but it is “somebody else's fault”. We see this systematically. The Conservatives are always trying to point the finger at somebody else. The member for replied that out of 18 countries, in terms of the trade deficit, in terms of our chief industrial partners worldwide, Canada is 18th out of 18 among those countries. It is the worst trade deficit because of Conservative incompetence.
We have seen this firsthand, time after time since the Conservatives came to power. We have seen half a million manufacturing and value-added jobs evaporate because of Conservative incompetence. We have the worst trade deficit in our history.
If we look at the inability of the Conservatives to negotiate even one fair trade agreement, then every time we bring fair trade proposals forward, Conservatives and even the Liberals always vote against them. They have never supported a fair trade agreement or anything that has been brought forward that even smells of fair trade on the floor of the House of Commons, certainly since I have been here.
When we look at the components of what the Conservatives have actually negotiated, we see how badly they have defended Canada's interests.
I will give one example, because it strikes home in my riding of . It shows the impacts of these badly botched agreements the Conservatives throw onto the floor of the House of Commons and then try to cover up. Of course, there is never any debate because they are so reprehensible in how badly they negotiate these agreements that they never want them to be examined in committee. They never want them debated on the floor of the House of Commons because they are all so bad.
I will give one example: the softwood lumber agreement. In my riding of , in the weeks following the ramming through of that agreement on the floor of the House of Commons, Conservatives and Liberals concocted together, and another party that used to exist and that is not so present today, the Bloc Québécois, conspired, on behalf of Canadians, to push it through. In my riding of , 2,000 families lost their breadwinner. Within a matter of weeks, we saw three softwood plants go down, one, two, three: Canfor, Interfor, Western Forest Products. Those workers were sold out by Conservatives and their partner, the Liberal Party, resulting in those workers losing their jobs and those families losing a breadwinner.
We said at the time, on the floor of the House of Commons, that there would be dire consequences if we rammed this through. Most of the Conservatives did not even bother to read the agreement. They just voted blindly because the told them to. Many of the 60,000 jobs that were lost were lost in Conservative ridings. The Conservatives said, “We don't care about those workers. We don't care about those jobs. We don't care about those businesses.”
Actions have consequences. That is why the member for is bringing forward the motion today. Having read the Canada-China FIPA and understanding the consequences, we are saying we need to take a halt on this, not ram it through, not ratify it, because the consequences to Canadian communities and the consequences to Canadians would be serious.
We have a government that seems intent on a one-dimensional economy. It wants to ship raw logs, raw minerals, raw bitumen out of this country. That is all it wants to do. It seems to think that there would be some economic benefit to doing that. I think the figures prove the contrary. Half a million manufacturing and value-added jobs were lost. We have the largest trade deficit in our nation's history. We have the worst trade economic performance in our nation's history. Those facts basically speak for themselves. What, then, would happen if we compounded that by ratifying a Canada-China FIPA?
Here is the situation. It was badly botched. The member for was very eloquent about that, going over step by step, section by section, how badly botched the negotiations were.
It would permanently keep in place all of the discriminatory measures taken by the Chinese state government, but it would open up Canada and basically ensure that the measures that we might normally take to protect our environment, to ensure that there is economic development, even value-added economic development, could be contested and that Chinese state companies that then choose to move forward and seek compensation could seek compensation from Canadian taxpayers.
Who would negotiate an agreement that would ensure that discriminatory measures could be taken by one party but not by another? And who would then say, “We're going to put this into place and ratify it for three decades”?
We have our answer. It does not seem logical. It does not seem consistent with what the Conservative Party ran on. Yet it is the current Conservative government that wants to put into place this FIPA and ensure, for all time, that those discriminatory measures could be taken by the Chinese state government but that Canadian measures that we put in place to protect our environment, our health and safety, our economy, could not be taken.
On this side of the House, we stand with the Canadians who are writing to us throughout this debate, the tens of thousands of Canadians who have expressed valid concerns about how badly this negotiation was botched.
The New Democratic Party caucus stands with Canadians on this issue. That is why we encourage the debate. We invite members who have actually read the agreement to vote with us to send a clear direction to the government that the agreement should not be ratified because it is not in Canada's interests.
Mr. Speaker, I want to thank the member for for sharing his time with me.
I am rising to speak on the NDP motion calling on the government not to ratify the Canada-China foreign investment promotion and protection agreement. I know the member for has very ably covered a number of areas of concern. I am going to focus on one particular area.
One of the big challenges with this agreement is that it does not acknowledge the Crown's constitutional obligations to first nations. This is outlined in section 35 of the Constitution, which states that the government has a legal obligation to consult aboriginal peoples before undertaking measures that impact on their rights. Of course, this right has been reaffirmed in any number of court decisions.
I only have 10 minutes, so I am going to try to focus on a couple of key arguments. The Assembly of First Nations has conducted a very preliminary analysis on the impacts of this agreement. It is a draft and much more work needs to be done, but part of its analysis includes the statement that the government has a duty to consult on FIPA and, to its knowledge, has not consulted with first nations. It went on to point out that the Hupacasath First Nation is currently challenging FIPA in court, mainly on this basis. I want to turn for a moment to this challenge.
Hupacasath filed a notice of application against Canada in early January. One of the councillors, Brenda Sayers, stated, “This deal will pave the way for a massive natural resource buyout and allow foreign corporations to sue the Canadian government in secret tribunals, restricting Canadians from making democratic decisions about our economy, environment and energy.”
Steven Tatoosh, the chief councillor, says, “We will argue that the Government of Canada breached its fiduciary duty to consult First Nations on our respective constitutionally enshrined and judicially recognized aboriginal title, rights and treaty rights.”
There are many organizations that are supporting this initiative. I have a quote from Grand Chief Stewart Phillip, president of the Union of B.C. Indian Chiefs, who said, “To recklessly disregard our title, rights and treaty rights is an outrage. Our inherent rights are our fundamental human rights. Canada repeatedly violates our human rights when our inherent rights are totally ignored in agreements such as the Canada-China FIPA.”
Councillor Brenda Sayers went on to say that the court action is intended to put the brakes on the FIPA process until all Canadians have had a chance to study the far-reaching and potentially devastating implications of the agreement.
One of the glaring threats in this agreement is around environmental protection. Sayers pointed out that under a FIPA, the foreign investor is subject to all the environmental regulations of the host country, but only as those regulations were in place at the effective date of the agreement.
Ms. Sayers further stated, “This is not just a First Nations battle. This is a battle for the rights of aboriginal and non-aboriginal Canadians. Both of our constitutional rights are being violated. There are a lot of common threads behind our two communities: the protection of our water, the protection of natural resources and our environment, the protection of our future. Canadians need to realize this is a fight for Canadians as a whole.”
Because I have limited time, I cannot read all of the letters I have received into the record. I have a letter from the Union of B.C. Indian Chiefs, a presentation from the Assembly of Manitoba Chiefs, a detailed brief from the First Nations Summit, a brief from The Council of Canadians with regard to how this agreement threatens indigenous rights, and a brief from the Coastal First Nations Great Bear initiative. There are many more. Those are the ones I was able to grab as I left my office.
I want to return to the Assembly of First Nations' preliminary analysis. It has identified the following:
Several modern treaties contain an express obligation to consult prior to the adoption of new International Legal Obligations (ILOs) which could affect rights under the treaties. We believe that the government is very likely under a duty to consult even those First Nations who do not hold modern treaties, based on the unilateral nature of the conduct of foreign relations and the potential for new [international legal obligations] to impact the exercise of existing or claimed [first nation] rights.
There are numerous in this draft analysis, and I think it would be incumbent upon the government to take a look at the concerns being raised that impact not only first nations, both treaty, non-treaty and self-governing, but also non-indigenous Canadians.
Further on in the brief, it says:
The potential for FN rights claims to be dealt with in investor state arbitrations is especially problematic for modern treaty holders. FNs would have, at best, intervenor status in such arbitrations. Past practice of international investor-state tribunals suggests that the ability to raise FN rights issues or human rights issues would be substantially impaired in such forums. The problem arises because some modern treaties contain language which suggests the exercise of some rights under the Agreements would need to be modified if those exercises conflicted with an ILO (hence, the reason for the consultation clauses). If an investor-state tribunal holds that a particular treaty right is effectively an expropriation, and hence contrary to the ILO of Canada in the FIPA to prevent such expropriations, then it means that future exercises of that right may need to be modified. This could arise with respect to self-government exercises of authority which are deemed expropriatory, and likely harvesting activities.
Further on it cites a claim under NAFTA, and it says:
To give you an idea of the kinds of cases which attract investor state claims, consider the Glamis case under NAFTA. There, a Canadian mining company was subjected to a mining reclamation regulation enacted, in part, to preserve a sacred site of the Quechan Nation. Glamis claimed this environmental regulation (enacted to preserve the Quechan Nation's connection and access to its sacred sites) was expropriatory.
When we are dealing with first nations sacred sites, cultural sites or traditional sites, mechanisms need to be in place in order to protect them and in order to consult appropriately with first nations.
Later on, the brief states:
Quechan intervened, but was unable to participate meaningfully in the case. Indeed, it had to rely on the US DOJ to defend the measures (which, incidentally were promulgated by the state of California). This should concern FNs because unlike the US DOJ, which occasionally acts on behalf of tribal rights as part of its trust responsibility, DOJ Canada typically is adversarial to FN interests.
We have seen that in any number of cases. We see the number of times that first nations have been forced to the courts to defend their rights, with the Department of Justice intervening on behalf of the government to prevent first nations from moving forward. It is very worrisome that we do not have these kinds of protections in Canada.
I want to turn briefly to the UN Declaration on the Rights of Indigenous Peoples, because this should be a fundamental underpinning for any kind of action that the government is going to take in the context of infringing on first nations rights. Article 19 indicates:
States shall consult and cooperate in good faith with the indigenous peoples concerned through their own representative institutions in order to obtain their free, prior and informed consent before adopting and implementing legislative or administrative measures that may affect them.
It is clear from the very brief overview I was able to present that there are grave concerns around the great potential this agreement has to infringe on inherent rights.
One of the things that often comes up in the context of talking about consultation is not only the duty to consult but the duty to accommodate. There is certainly no mention in this agreement either around the duty to consult or the duty to accommodate, so it is important that the Conservative government pull back from this agreement and undertake its constitutional responsibilities under section 35 to conduct those consultations to ensure that first nations treaty rights and inherent rights will not be abrogated in this context.
I am hopeful, given the very reasoned and rational presentations that are being made in the House of Commons, that the Conservatives will reconsider their position on this matter.
I did not have time to talk about the hundreds of emails and letters I am getting in my own riding expressing grave concerns about this agreement. People are very concerned about how it is going to impact on the environment and on our waters. People really want an opportunity to have their say on this agreement.
In the absence of the government undertaking any meaningful consultation with indigenous and non-indigenous Canadians, I encourage people to write directly to the to ask him to back down on this agreement.
Mr. Speaker, what a pleasure it is to stand in the House and speak to international trade. My speech will be broken into two parts. The first part has to do with some of our trade accomplishments. Then the second part will be more specifically addressed to our FIPA with China.
Our government's top priority is creating jobs, growth and long-term prosperity in every region of Canada. That is why we are working hard to open new markets to increase Canadian exports to the world's largest, most dynamic and fastest-growing economies. Since 2006, our government has consistently opposed protectionist measures around the world and has stood up for free and open trade, showing leadership on the world stage in what was, and continues to be, a challenging period for the global economy. Canada has proven resilient through these tough global economic times.
Today, Canada is further ahead than any other G7 country when it comes to creating jobs and economic growth and further ahead than any other when it comes to our debt to GDP ratio. At the same time, Canada is just one of a handful of nations in the world with a Triple A credit rating. We proudly lay claim to having the safest banking system in the world for five years, according to the World Economic Forum. Overall, Canada boasts the best fiscal position of the G7 countries and the best fiscal prospects in the G20.
It is not without good reasons that Forbes magazine has opined that Canada is the best country to do business in the G20, and the Economist Intelligence Unit has declared Canada to be the best place in the world to do business in over the next five years.
Before I delve into our trade and investment relationship with China, I will take a few moments to recap some of our government's accomplishments in promoting the interests of hard-working Canadians internationally over this past year.
Canada joined the Trans-Pacific Partnership and participated in the first full round of negotiations. The TPP is a significant opportunity to not only serve as the central pathway for economic integration in the Asia–Pacific region, but is designed to be expanded to include other countries. In fact, it is hoped that the TPP will act as the catalyst to reinvigorate the Doha round of the WTO. Once completed, the TPP will not only strengthen Canada's effort to broaden and deepen its trade relationships with dynamic and fast-growing Asia–Pacific markets, but it will also reaffirm and invigorate our traditional partnership in the Americas.
We launched the first round of negotiations with Japan for an economic partnership agreement. Japan is the world's third largest economy and a key trade and investment partner for Canada.
Furthermore, we announced exploratory discussions for a bilateral free trade agreement with Thailand and achieved observer status with the Pacific Alliance which is a group of four fast-growing Pacific countries in Latin America.
We saw the entering into force of the Canada-Jordan free trade agreement and royal assent given to the Canada-Panama Economic Growth and Prosperity Act, which came into force on April 1. This builds on other free trade agreements our government has signed in the Americas, including with Peru, Honduras and Colombia, all agreements the New Democrats have opposed. In fact, the NDP trade critic, the member for , argued against a free trade agreement with Colombia because “the trade unions do not want it”.
Our government has also placed an emphasis on the importance of promoting international education. An advisory panel of eminent Canadians provided recommendations to help guide Canada's international education strategy. International students contribute over $8 billion to the Canadian economy and $445 million to government tax revenues each year, supporting more than 86,000 jobs.
We completed the fifth year of the five-year global commerce strategy, the launching of a cross-country consultation and the naming of an advisory panel to help shape the next phase of the strategy.
We established a record number of trade missions to advance Canada's commercial interests abroad, including to India, China, Saudi Arabia, Jordan, Thailand, Cambodia, the Philippines, Russia and Libya, and the conducted a historic trade mission to Burma just this past spring.
In North America, we signed a two-year extension to the Canada-United States softwood lumber agreement that would secure access to the U.S. market for Canada's softwood lumber until 2015. This means continued predictability for Canadian softwood lumber exporters and the hard-working forestry workers who depend on the industry for their livelihoods.
We continue to make ongoing progress in implementing the Beyond the Border and Regulatory Cooperation Council action plans to improve the flow of people and goods between Canada and the United States and laying the foundation for more jobs and growth in both countries.
While I am discussing our partnership with the United States, I would be remiss if I did not remark upon our celebration of the 25th anniversary of the Canada-U.S. free trade agreement. Since the coming into force of the agreement, Canada's annual GDP has risen by $1.1 trillion. Nearly 4.6 million jobs have been created in Canada and two-way trade in goods of services with the United States has more than tripled.
Now we all know that the NDP opposed this agreement from day one. Even today, despite the NDP leader's attempt to whitewash his party's socialist history, page 18 of the NDP policy book states, “New Democrats believe in...Renegotiating North American Free Trade Agreement”.
Any party that would threaten the economic well-being of Canadians with such a reckless proposal simply cannot be trusted. The fact is that last year our two-way trade in goods and services with the United States exceeded $742 billion. That is nearly $2 billion a day or almost $1.4 million every minute of the day. These numbers are not simply statistics. They represent some 2.4 million Canadian jobs that the NDP would simply throw away. Therefore, the NDP's anti-trade credentials are well established.
Our government's leadership in resisting protectionist measures and continuing to create new opportunities for our exporters has been key to Canada's success. Thanks to our actions, Canada's workers, businesses and exporters, including small and medium-sized enterprises that form the backbone of our economy, now have preferred access to, and a real competitive edge in, more high-growth and emerging markets around the world than any other economy in our history.
In less than six years, our government has concluded free trade agreements with nine countries: Colombia, Honduras, Jordan, Panama, Peru and the European Free Trade Association member states of Iceland, Liechtenstein, Norway and Switzerland. As I mentioned, Canada is also engaged in negotiating with large, dynamic and fast-growing markets, including the European Union, India, Japan and the countries that comprise the Trans-Pacific Partnership.
I will now focus on one aspect of our trade strategy, and that is our engagement with China, of which I speak with a little experience. I first started doing business in China in 1982. My business experience in China has been exporting mass-transit equipment, engineering services, agriculture and fisheries products to the Chinese businesses.
The simple fact is that our government is providing Canadian businesses with the tools they need to invest with confidence in China. Conversely, China is rapidly expanding its middle class and consumer base. Its population of 1.4 billion offers an enormous market to Canada's exporters. It is soon to be the world's largest economy.
Before I discuss the important part the foreign investment promotion and protection agreement plays in our trade and investment relationship with China, I would like to remark upon the importance of the people-to-people ties between our two countries, which is supported by more than 1.4 million Chinese Canadians residing in Canada. Our continued success in applying trade and investment as the twin engines of economic growth will rest upon these ties. Fundamentally, it is the strong people-to-people links that are helping us take our relationship to the next level.
In my remarks so far, I have emphasized that our Conservative government is committed to creating the right conditions for Canadian businesses to compete globally. Canada's foreign investment promotion and protection agreement with China, the world's second-largest economy, will provide stronger protection for Canadians investing in China and create jobs and economic growth right here at home.
At its core, the agreement establishes a clear set of rules under which investments are made and under which investment disputes are resolved. For Canadian businesses looking to set up in China, they cannot be treated less favourably than any other international company looking to do the same. Once an investment is made, a Canadian business cannot be treated less favourably than any other business.
The agreement also ensures that all investment disputes are resolved under international arbitration. This is an important part of the agreement as it ensures that adjudications are independent and fair. Thanks to this FIPA, Canadian investors in China will no longer have to rely on the Chinese legal system to have their disputes resolved. I also have experience in resolving disputes in China.
It is also crucial to note that ours is the first bilateral investment agreement that China has signed that expressly includes language on transparency of dispute settlement proceedings. Our government has repeatedly made it clear that it is our long-standing policy that all dispute resolutions should be open to the public and that submissions made by the parties be available to the public.
Let me clear. Under the agreement any decision emanating from the dispute resolution will be made public.
It is unfortunate that for months the NDP and its anti-trade allies have continued to spread myths about this agreement. Let me clear up a few misconceptions. First, Canada retains the ability to regulate and legislate in areas such as the environment, culture, safety, health, and conservation. Furthermore, the agreement maintains Canada's ability to review foreign investments under the Investment Canada Act to ensure they provide a net benefit to Canadians and that our national security is not compromised. There is no doubt Chinese investors in Canada must obey all the laws and regulations of Canada just as any Canadian must.
Nor, as the NDP likes to pretend, is the agreement somehow unusual. Canada-China foreign investment promotion and protection agreement is a reciprocal agreement similar to the 24 other investment treaties Canada has signed with key trade investment partners. Canada is one of several countries, along with such countries as New Zealand, Germany, and the Netherlands which have all signed investment treaties with China, often on terms less favourable than the terms that Canada has negotiated with China.
This investment treaty will help protect the interests of Canadian investors. The primary purpose of the foreign investment promotion and protection agreement is to ensure that Canadian investors can invest in China with greater confidence, thereby spurring increased investment in China and creating jobs and economic growth right here at home. We have been very clear with the Chinese government that Canada wants to continue to expand its commercial relationship with China, but only in a way that produces clear benefits for both sides.
We are seeing these clear benefits to Canadians. Not only is China the world's second-largest economy, but it has recently become Canada's number two export market, second only to the United States.
In fact, Canadian goods exported to China rose 15% last year to over $19 billion. Not only that, but Canada's exports to China have nearly doubled under our Conservative government. All this being said, it is unfortunate that the NDP and professional anti-trade activists have continued to spread such misconceptions about the importance of trade to the livelihood of Canadians and about this agreement in particular.
Thankfully, Canadian investors and exporters can count on our Conservative government to create conditions for them to compete, and win, in the global economy for decades to come.
Mr. Speaker, I will be sharing my time with the hon. member for .
As a member of the Standing Committee on International Trade, it is my duty to rise here today to debate an agreement that could have a significant impact on Canadians from coast to coast to coast.
On several occasions—at meetings of the Standing Committee on International Trade, here in the House as well as outside the House—the NDP asked the Conservative government to be transparent and hold a public debate before signing the foreign investment promotion and protection agreement, or FIPA, between Canada and China.
As per usual, however, the Conservative government preferred to do things in secret, under the radar, behind closed doors. The agreement itself has never been debated or examined by a committee. It has never even been voted on. China and Ottawa surreptitiously negotiated this FIPA, an agreement that gives Chinese state-owned enterprises unprecedented rights that are not even offered to Canadian enterprises, an agreement that undermines Canadian sovereignty and the constitutional authority of the provinces. To add insult to injury, the agreement will have a 31-year term and cannot be revoked.
The Canada-China FIPA is the biggest trade agreement since NAFTA. It gives Chinese state-owned enterprises the right to sue Canada for damages when decisions are made at the municipal, provincial or federal level that harm their investments.
Usually, Canada signs FIPAs with countries whose investors do not own major assets in Canada. However, that is not the case with China, and the growing weight of Chinese investments in Canada now has a political price. As a result of the Canada-China foreign investment promotion and protection agreement, Canadian taxpayers will now have to shoulder disproportionate obligations with regard to Chinese companies in exchange for protecting Canadian companies in China.
According to Gus Van Harten, a law professor at York University, the rights that this treaty grants to Chinese state-owned enterprises will affect provincial authority over natural resources, taxation and property rights.
By signing this treaty, Canada is abdicating part of its sovereignty to China and its enterprises, without really getting anything in return for Canadian companies in China. Why? The reason is that the treaty also consolidates the inequality that currently exists with regard to Canadian companies' ability to access the Chinese market. Under the Investment Canada Act, Canada is currently a relatively open and transparent market. However, the existing framework in China, particularly in strategic sectors, lacks transparency, is closed and is described in a very vague manner in the treaty. China will therefore benefit from a favourable environment for its investments in Canada, but the reverse is certainly not guaranteed. That is why we, on this side of the House, are concerned.
The $15 billion takeover of the Canadian oil and gas company Nexen by Chinese energy giant CNOOC confirms the imbalance with regard to the two countries' respective investments. The consequences of the treaty go well beyond the oil sands. Chinese state-owned enterprises are also active in the mining sector, and they are looking at making investments in Quebec's Plan Nord. A Chinese company has already acquired a nickel mine in northern Quebec, and it will be protected by the treaty, as will all future investments.
Like all Canadian provinces, Quebec's ability to control its natural resources would be limited from this point on; and, yet again, it would happen without consultations between the province and the Conservative government.
We cannot accept the fact that a valid provincial policy—one that addresses a crucial environmental challenge and that is widely supported by the people—is being directly attacked with no real possibility of recourse.
The treaty does not prevent various levels of government from continuing to regulate environmental protection, health and public safety. However, if these regulations are detrimental to Chinese businesses, the companies can sue the governments and receive significant financial compensation—potentially in the billions of dollars.
In that context, it is probable that the provinces, municipalities and the federal government will be more reluctant to pass new regulations because they will want to avoid exposing themselves to costly lawsuits. This treaty will make passing new regulations less palatable.
For example, we do not see how Canada would be able to regulate greenhouse gas emissions or strengthen oil sand regulations without affecting Chinese investments and possibly subjecting the country to lawsuits.
Setting aside the issue of jurisdiction for the moment, it would be completely fiscally irresponsible of the federal government to negotiate an agreement that requires it to take responsibility for measures taken by a provincial government.
A number of countries have faced catastrophic fines because of these treaties. The amount of money at stake has reached tens of billions of dollars—hundreds of billions, even—to the point where certain countries, such as Australia, have decided to take another look at whether investment protection agreements, which is what this is, are a good idea.
Finally, judging from the experience of other countries, the trade agreement between China and Canada may well undermine the development of Canada's clean energy technology sector.
It is inconceivable for a treaty that could have such a devastating effect on Canadian sovereignty, provincial jurisdictions and public rights to be passed with absolutely no democratic debate in Parliament and across the country. That is why we must stand firm against it. Canadians have not given this government a mandate to sell our sovereignty to China or to the highest bidder.
The NDP believes in the importance of our commitment to China and other emerging markets. We want clear rules that support investor confidence and that protect and promote Canada's interests. We want a trade policy that creates new business opportunities for Canadian companies and that promotes value-added industries, as well as high-quality jobs, while respecting labour law and environmental law.
Unfortunately, on a number of occasions, this government signed agreements based on nothing more than a radical right-wing ideology and a hands-off approach that simply does not work.
We in the NDP feel that Canada should have a robust trade policy, with good partners, in order to reflect Canada's commitment to responsible and environmentally sound economic development that respects all stakeholders.
Let us be clear. We are in favour of trade, but trade that is fair, effective and beneficial for both sides. That is the key.
This is not about signing free trade agreements with anyone, at any time, under any circumstances, time and time again, the way things are being done right now. No, this is about paying attention, taking these agreements very seriously and taking the time to listen to every voice across the country in order to have a clear vision, to think about all the things that could go wrong and to really be predictable. Now, that would be a responsible approach.
To conclude, the Conservatives must be clear with the Government of China and with all Canadians by stating that they will not ratify the agreement being negotiated right now. Canada's trade and investment relationship with China is far too important to make mistakes.
Mr. Speaker, it is an honour to speak to the Canada-China foreign investment promotion and protection agreement on behalf of my constituents in Surrey North.
As the official opposition, the NDP was very concerned about this agreement, particularly about how it was formed, the silence surrounding the agreement and the potential destruction it could cause to Canadian businesses and Canadians. I support the motion presented in the House by my hon. colleague from . The government should not ratify the Canada-China FIPA, and it should properly inform the government of the People's Republic of China that it has no intention of doing so.
FIPA is a bilateral agreement with China, a major investor in Canada. It is not a free trade agreement. It was signed on September 9, 2012; however, the deal was kept secret until September 26, when it was tabled in Parliament. The agreement was not debated by Parliament; it was not considered by the committee and the international trade committee, of which I am a member; nor was it voted on in any votes in the House. Although it has been available for ratification since November 1, 2012, the Conservative government has not yet officially committed to this treaty. If the government believes that the agreement is so strong, why is it taking so long to ratify it? Perhaps it is because the Conservative government also knows how damaging it could be for Canadians, Canadian business and the Canadian economy.
As Canadians, we are proud of our country's rich supply of natural resources. The trade of these resources would benefit our economy enormously, and China is an ideal partner for those resources. China has an expanding economy due to its growing middle class. Consequently, it requires increased imports of oil, lumber, food, technology, agricultural goods and other basic necessities. Canada has the means to meet this demand; therefore Canada and China would be complementary trading partners and we would want to pursue a fair deal with China.
However, the Canada-China FIPA deal, in its current state as signed by the government, has not given Canada a fair share. This is not unprecedented, because we are resource-rich and we are in a position to be a major exporting country, yet time and time again, we see trade deals signed by the government that set us up to be exploited.
Foremost, the Canada-China foreign investment promotion and protection agreement is poorly named. It offers neither promotion nor protection of Canadian trade interests in China. It is biased toward China and Chinese companies. It does not present Canadian companies with the same privileges in the Chinese markets as Chinese companies have in China, nor as they have in Canada. We want to see a growth of Canadian companies in China, but we need a level playing field for our businesses as they expand into global markets. Canadian companies deserve the same promotions and protections that Chinese companies receive in Canada. This is not what the current Canada-China FIPA offers.
Not only does this treaty expose Canadian businesses to risk; it plays with the future of Canadian taxpayers. The Canada-China FIPA includes investor state dispute mechanisms designed to allow Chinese companies to literally sue Canada if they do not agree with our federal regulations. These court processes are located completely outside of legal jurisdiction and rely on Canadian taxpayers funding them. This is not a contingency issue. Canada has already experienced similar problems through NAFTA treaty tribunal bodies; we have been sued numerous times by American companies and we have never won a case. Furthermore, Chinese companies already have a track record of using the investor state mechanism to challenge regulations of trading partners.
I do not understand why the Conservative government would expose Canadians to such risk when there is a clear record of arbitration. Perhaps the government is also ignoring its most important resource: its Canadian citizens.
As a government that claims to be fiscally accountable and competent in trade, why are the Conservatives trying to undermine Canada's potential? Perhaps they do not understand the worth of our resources and how valuable we are as a trade partner. Perhaps they do not see the potential in Canadian companies. This ignorance does not prove them fiscally capable, and the enormous trade deficit speaks to the lack of credibility in exchange agreements.
In fact, under the current government, Canadians have seen our trade deficit grow over the last number of years. In 2012 alone, Canada had a current account deficit of $67 billion, which is an $85 billion drop from an $18 billion surplus in 2006, the first year the Conservative government came into power. That is the government's record. It has been reckless. It has shown its incompetence when it comes to negotiating trade agreements, and it has shown its incompetence if we look at our trade deficit over the years. Under the current government, we have had the largest trade deficit ever in Canadian history. Yet, the Conservatives call themselves fiscally competent and want to expand trade.
We need trade, a fair trade, where Canadian interests are also put forward by the government. That has not happened under the Conservatives.
In addition to the growing current account deficit, the manufacturing deficit has nearly quadrupled since 2006, to just over $100 billion. Good paying jobs have disappeared under the current government.
The manufacturing deficit creates a bigger problem because we are importing more finished goods from outside this country, rather than manufacturing those goods in this country; so we can see we are not exporting as many finished goods as we could be, under the Conservative government.
Stacked up against 18 of the most comparable trading nations, including the U.S. and Australia, Canada is at the bottom of the list when it comes to trade performance.
If Canada has resources and ideal trading partners, why is the deficit growing? It is due to mismanagement of trade by the inept government agreeing to deficient treaties such as FIPA with China and Canada.
The government has chosen to undermine democracy through its lack of parliamentary procedures in creating the Canada-China FIPA. It has chosen to benefit Chinese corporations rather than supporting Canadian businesses, and it has chosen to expose Canadian taxpayers to huge liabilities in potential legal arguments through trade tribunals.
The Canada-China trade relationship should be the foundation upon which our future agreements are built. Canada has an opportunity to create a trade deal with China that is mutually beneficial to both nations. We should be establishing an agreement with elements of communication and co-operation between our two countries because trade deals are not just about trade anymore. They present unique opportunities for the collaborative sharing of education and culture, among many other things.
We need to inform China about our intentions because we value that country as a trading partner. We must treat China with courtesy and we must pursue a trade relationship that is respectful both of China and of our own country.
We want bilateral trade agreements like FIPA to be designed to actually serve Canadians and close the embarrassingly large deficit that, under the current government, we have created. We want them to reflect the value we place on Canadian citizens, Canadian businesses and the Canadian economy. FIPA, as it currently stands, is unratifiable, both in spirit and in content.
Mr. Speaker, the and President Obama worked together on regulatory reform to find ways to move goods and services efficiently across not only our borders but around the world. These investments are positioning Canada as the gateway of choice between Asia and North America. Canada's west coast ports are more than two days closer, so it is helping to expand that market.
Since 2006, our government has invested $1.4 billion in Asia-Pacific gateway infrastructure projects, an amount that has been leveraged to almost $4 billion with the participation of provincial and municipal governments and the private sector. It is a true partnership. A total of almost 50 projects have been supported, creating jobs and economic growth in local communities, while easing the movement of goods, services and people to and from the fast-growing Asia-Pacific economies.
As a result of these strategic investments and partnerships, Canadian exports to the Asia-Pacific region have reached record levels. These investments are also generating new business opportunities, improving the flow of traffic, enhancing the efficiency of the transportation system, attracting investments and contributing to Canada's global competitiveness.
In what remain globally challenging economic times, more must be done to improve the flow of Canada's much sought after commodities, from oil and gas to potash, lumber and coal, through our west coast.
Our government will continue to build on this competitive advantage. These are just a few examples of how our government is promoting the interests of Canada's exporters.
Ultimately, to capture new opportunities in these dynamic markets, our government is creating the right conditions for Canadian businesses and exporters to compete and succeed internationally. The principle is quite simple. Government does not create the business. What it does is set the framework to make it more convenient, efficient and stable for businesses. They like the elements of stability and certainty within the agreements and will move forward and invest. Consequently, an important part of the equation is ensuring that not only two-way trade but also investment between Canada and other countries can take place in a stable and secure manner. That is why Canada has over 24 foreign investment promotion and protection agreements with key trade and investment partners, including China, the world's second-largest economy.
I would be remiss if I did not highlight the fact that not only is China the world's second-largest economy, but it recently became Canada's number two export market, second only to the United States. Canadian goods exports to China rose 15% last year to over $19 billion. Not only that, but Canada's exports to China have nearly doubled under our Conservative government.
I am not one of the most partisan members of Parliament in this House. I have been on the international trade committee. I have worked together with all colleagues in the House. It is unfortunate that despite all these successes, the NDP continues to fearmonger and spread myths about our trade agreements in general, this foreign investment protection agreement, and trade overall and how important it is for Canadians. This should not be a surprise to many Canadians. After all, it is the same NDP that opposed the Auto Pact and the historic North American Free Trade Agreement, otherwise known as NAFTA, and whose member for the recently argued that trade agreements “threaten the very existence of our nation”. It is the same party that stood in this House to oppose trade agreements with countries as diverse as Panama, Colombia, Israel, Chile, Costa Rica, Norway, Switzerland and even Liechtenstein.
Page 18 of the NDP policy book today states that the “New Democrats believe in...[r]enegotiating the North American Free Trade Agreement”.
In my community of Kelowna—Lake Country, NAFTA has been an incredible success for the wine industry in British Columbia as well as in Ontario, Nova Scotia and across Canada. It has been a great success, and the NDP wants to renegotiate it. I just cannot imagine that. Last year, our two-way trade in goods and services with the United States exceeded $742 billion. That is nearly $2 billion a day, or almost $1.4 million every single minute.
The chair of the international trade committee, Senator Andreychuk, and I had the opportunity last week to be in Washington to meet with new members of Congress and to inform them of that importance. Many of them were not aware of the one in five jobs, 20% of the GDP and the $2 billion a day in trade. It is a great success story, and we need to continue to be proud of it, not go down to the United States and tell them how bad we are here in Canada. We are in this together. It is the best partnership and the two most integrated economies in the world. We want it to continue to grow. These numbers are not simply sterile statistics. They represent some 2.4 million Canadian jobs, jobs that the NDP would jeopardize if it had its way.
The NDP's anti-trade credentials are well established. In particular, I would like to take a moment to dispel the many inaccuracies the NDP and its anti-trade allies have been spreading about Canada's foreign investment promotion and protection agreement with China.
Our Conservative government is committed to creating the right conditions for Canadian businesses to compete globally. Ultimately, Canada's foreign investment promotion and protection agreement, otherwise known as FIPA, with China, the world's second-largest economy, will provide stronger protection for Canadians investing in China and will create jobs and economic growth right here at home. It is an agreement that establishes a clear set of rules under which investments are made and under which investment disputes are resolved. For Canadian businesses looking to set up in China, they cannot be treated less favourably than any other foreign company looking to do the same. Once an investment is made, Canadian businesses cannot be treated less favourably than any other businesses, including Chinese businesses. Importantly, the agreement protects investors from government expropriation, except under strict conditions, and even then only with appropriate compensation. That is only fair. We treat others as we would want to be treated.
This FIPA would also ensure that all investment disputes are resolved under international arbitration, ensuring that adjudications are independent and fair. It would remove some of the challenges of culture, language, etcetera. Canadian investors in China will no longer have to rely on the Chinese legal system to have their disputes resolved. As David Fung of the Canada China Business Council said, “Without this agreement, Chinese investments in Canada would receive the protection of the well-developed Canadian judicial system but Canadian investments in China would have to live with the uncertainties of a developing Chinese judiciary”. Very simply put, Chinese investors in Canada have the protection of the rule of law. All we are asking now, with this agreement, is that our Canadian investors be given the same benefit in China that investors from China have been experiencing all along. We are leveling the playing field to help Canadian businesses.
I would also like to emphasize that ours is the first such agreement China has signed that specifically includes language on the transparency of dispute settlement proceedings. There has been lots of discussion about that today. This is the most transparent agreement that has been signed between China and any country, and that obviously speaks volumes about the negotiation skills of our senior public trade officials and trade commissions.
This has been said many times in the House, but allow me to repeat it: It is Canada's long-standing policy that all dispute resolution should be open to the public and that submissions made by the parties be available to the public. Under this FIPA, any decisions of a dispute resolution panel will be made public, period. It is that simple.
As I mentioned earlier, the NDP and its special interest allies have gone to great lengths in the past and today in the House to spread misinformation about this agreement. Let me categorically state what the agreement does not do. First, the agreement does not hinder Canada's ability to regulate and legislate in areas such as the environment, culture, safety, health and conservation. On top of that, provisions in the agreement will preserve Canada's current ability to review foreign investments under the Investment Canada Act to ensure that they provide a net benefit to Canadians and that our national security is not compromised. Let there be no doubt that under this treaty, Chinese investors in Canada must obey all the laws and regulations of Canada, just as any Canadian must.
In short, the Canada-China foreign investment promotion and protection agreement is similar to other investment treaties Canada has signed with key trade and investment partners. We join countries such as New Zealand, Germany, the Netherlands and Japan that have all signed investment treaties with China on terms that are similar to, or in many cases less favourable than, the terms Canada has been able to negotiate with China. Once again, I give full marks to our senior public servants and the trade commissions negotiating this very good FIPA.
Ultimately, this investment treaty will help protect the interests of Canadian investors. The key purpose of the foreign investment promotion and protection agreement is to ensure that Canadian investors can invest in China with greater confidence, spurring increased investment in China and creating jobs and economic growth for hard-working Canadians. I do not know how many times I can say it, but we want to have a rules-based system for Canadian investors in China, just like Chinese investors have had in Canada for a number of years.
This investment agreement is just one example of how our government is promoting the interests of Canadians and is working to create new opportunities for Canadian exporters in China. The potential for increased Canadian investment in China is significant, given that China is expected to become the world's largest economy by 2020. My hon. colleague from mentioned that earlier in his comments. We will have great opportunities in the years ahead. The Chinese economy can and will benefit greatly from Canadian innovation expertise.
China is home to an expanding middle-class consumer base, and it has a burgeoning science, technology and innovation sector that needs Canadian expertise. Further boosting the Canada-China partnership is the fact that we are joined by the ties of family. More than 1.4 million Chinese Canadians enrich every aspect of our country, including some members of our House. We are looking at all aspects of the country. We are enriching the arts, literature, science, business, politics and philanthropy. This reflects the strong people-to-people links that are helping us to take our relationship to the next level.
Therefore, it is very unfortunate that, in addition to pursuing their archaic anti-trade ideology, the New Democrats do not see the value in strengthening our relationship with China. For our part, the Government of Canada is working very hard to deepen relationships with dynamic, high-growth markets around the world. As I mentioned, the is working tirelessly to grow the markets around the world, but quite obviously China is not at the top of the list of the NDP.
We have been very clear with the Chinese government that Canada wants to continue to expand its commercial relationship with China, but only in a way that produces clear benefits for both sides, a win-win situation. By establishing this clear set of investment rules that provides greater protection against discriminatory and arbitrary practices, this agreement will give Canadians greater confidence as they consider whether to invest in China. As I mentioned, the stability and predictability are what members of the business community cry out for, and this is what we are providing with this agreement.
In summary, the principle of the foreign investment promotion and protection agreement, or the Canada-China foreign investment protection agreement, or FIPA, is to ensure that Canadian investments in China are protected and that there is reciprocity so that Chinese investments in Canada are protected. As well, this is about giving Canadian companies investing in China the same rights and privileges as a Chinese company would have. This is about protecting Canadian foreign direct investment in China. We cannot do that without allowing those same rights and privileges to the Chinese. It is called “reciprocity”. It is called “fairness”. It is called “reasonable rules-based trading”. Rules-based trading is reasonable, in my mind, and it is fair, and I believe that all Canadians support fairness.
To alleviate some of the fearmongering from our NDP friends across the way, this treaty in no way impedes Canada's ability to regulate and legislate in such areas as the environment, culture, safety, health and conservation, which is another thing that needs to be clarified. I am concerned about the environment just as much as anybody in the House. I have three daughters and two grandsons, a one-year-old and a six-year-old, and I care about their future. I care about jobs and the opportunities they will have. This agreement provides that certainty for businesses.
Because of the diverse composition of the exports to China, this agreement affects people from all regions of Canada. We all need to pay attention and support this agreement because overall it is a good opportunity to provide jobs for Canadian workers. It is a good agreement for all Canadians from coast to coast to coast.
Mr. Speaker, I wish to inform the House that I will be sharing my time with the hon. member for .
Today I really want to speak to my constituents and discuss a very important issue. It has to do with the motion put forward by my hon. colleague from .
That, in the opinion of this House, the government should inform the Government of the People's Republic of China, that it will not ratify the Canada-China Foreign Investment Promotion and Protection Agreement.
I would like to revisit the process that has led to this motion. The negotiation process leading up to the agreement was truly clandestine and undemocratic. The negotiations were conducted completely in secret. We were not able to have our say as the negotiations were progressing. They were not even open to parliamentarians. The negotiations took place in a tiny bubble.
Then, in October 2012, the Conservatives tabled the agreement, without consulting the provinces or first nations. There was no committee review or any consultation with Canadians. Despite all our efforts and requests, the agreement has never been debated or examined by a committee, nor has it ever been voted on.
I would first like to point out that this agreement affects a first nations right. In fact, the aboriginal peoples of Canada have a constitutional right to be consulted if the government adopts any measures that will have an impact on their rights. This right has been upheld repeatedly by the Supreme Court. We already knew that this government thought it was above the law, and apparently, nothing has changed.
The Hupacasath First Nation has filed an injunction with the Federal Court to stop the ratification of the FIPA. Brenda Sayers of the Hupacasath First Nation said:
First Nations were not consulted on the Canada China FIPPA. As First Nations with our Aboriginal Title, Rights and Treaty Rights, it is our duty to intervene for the sake of our children's futures....if ratified, FIPPA will immediately affect our Title and Rights by limiting our ability to exercise [our] jurisdiction in land use planning and regulation of our territory...
In my view, it is particularly disturbing to see that the government reached an agreement without even consulting with first nations, even though the agreement will have a direct impact on their rights.
In my region, there are six aboriginal communities. When we talk about natural resource development, the forestry and mining industries are often located on their ancestral land.
A company trying to set up a project is sitting down with first nations and is taking the time to consult with them. It is trying to develop a rare earth project. Rare earth materials are used in a lot of high-tech devices, especially batteries. Because of China's technology boom, those materials are highly sought after. If there is presumably one deposit in the region, there may be others.
Under this agreement, Chinese companies may appropriate or attempt to appropriate some of the rare earths. This would be done with no consultation of first nations, with no one even sitting down with first nations communities. We have to be very careful.
From the outset, this type of agreement indicates that Chinese investors are probably more interested in Canada's natural resources or natural resource industries. We must be very careful. The Idle No More movement came out of protests against a number of legislative measures in the budget that had been put in place without any consultation with first nations.
We must be extremely careful before we bring in an agreement that would once again fly in the face of Canada's Constitution. We have already done enough harm to first nations communities. We have imposed enough things on them without any consultation. Right off the bat I have a lot of concerns about this measure.
The government did not consult the provinces either, even though many legal experts are saying that this agreement will interfere in the provinces' exclusive jurisdictions. It did not consult Alberta, whose oil sands industry could be attractive to Chinese investors. It did not talk to Ontario or Quebec about the forestry and mining industries. It simply did not talk to the provinces. I find this very worrisome because this agreement directly affects them. I will come back to this.
Lastly, the government has not conducted any studies in this House or in committee. Trade agreements are generally subject to study in Parliament and then to a vote. Why is this agreement the exception to the rule? I have no idea.
When the text of the agreement was finally made public, the NDP called for a study in committee, but the Conservatives refused. We then asked for an emergency debate. Once again, the Conservatives refused. We have asked the government questions during question period and we have not even gotten an answer.
More than 80,000 Canadians sent messages to the government to ask it to conduct a study on the Canada-China FIPA. The trade agreement with Panama was examined, as was the agreement with Jordan. This agreement with China is much more complicated and restrictive for Canada, but the government is refusing to allow Parliament to study it. That is completely irresponsible and shameful.
This agreement will bind the two countries for the next 30 years. The public has a right to know what kind of disaster to expect with the current agreement. Right now I am 29 years old. This agreement would bind Canada and China until I am 59. That is more than twice my age right now, and during that time we will be stuck with an agreement that could present a lot of problems.
In addition to the fact that the process leaves much to be desired, the treaty itself is extremely problematic. We will not have the right to withdraw from this agreement for 30 years. No matter what happens, there is no way out of this agreement whatsoever. The treaty is written in such a way that the dispute settlement mechanism between an investor and the state allows foreign companies to sue for damages in foreign courts outside the Canadian justice system.
That means, for example, that if a Chinese company investing in Canada finds a new Canadian regulation to be too bothersome, that company can file a complaint in courts outside Canada's jurisdiction and seek damages from Canadian taxpayers.
To make matters worse, foreign investors will be able to sue the federal government over laws that are not even federal. A provincial government could implement a law and foreign investors would still be able to take the federal government to court. We could therefore be sued over laws that do no even fall directly under our jurisdiction.
Before I close, I would like to point out that, so far, every time Canada has taken other countries to court under similar agreements, it has lost. We are 0 for 17. Every time, we have lost. On the other hand, any time China or the United States has been taken to court, it has won its case.
Therefore, from the outset, this is a very risky undertaking. The government has refused to consult the public and is not respecting the rights of first nations. What is more, we must remember that this agreement directly targets natural resources. This is a big investment, and these resources belong to all Canadians.
I think we need to be careful. Right now, this agreement does not contain the legal provisions needed for Canadians to really support it. If it did, I would have supported it, but that is not the case right now. That is why I wanted to share my concerns about this agreement.
Mr. Speaker, I rise in the House to speak to the foreign investment promotion and protection agreement. This is a very important issue. I am quite pleased that my colleague, the international trade critic for the official opposition, moved this motion calling on this House not to support the agreement that has been entered into, but not yet ratified by Canada.
I have only 10 minutes; five minutes before question period and five after. I would like to go over four key aspects of the agreement and certain parameters surrounding it. If I had more time, I would talk more about the problems with this agreement, but the four points I am raising are, in my mind, the biggest problems with this agreement. These points are the reason that I, as the member for , agree to the motion and therefore reject the premise of the agreement proposed by the Conservative government.
The first point is the Conservative government's claim that the foreign investment promotion and protection agreement will protect foreign investment and encourage more investment. One very clear item in the agreement leads us to believe that the agreement will actually discourage investment, Canadian investment in China in particular. Investment might not be discouraged, but it is not being encouraged either.
Let us compare two articles in particular. One is about the most favoured nation. In short, it ensures that the party the government is signing the agreement with is given the same general or minimum protection that the government gives to other countries with which it already has agreements. I want to compare this article with the one on national treatment, which specifies that businesses protected in our territory must receive the same treatment as businesses from here. I will read both articles.
The article on most-favoured-nation treatment states that:
Each Contracting Party shall accord to investors of the other Contracting Party treatment no less favourable than that it accords, in like circumstances, to investors of a non-Contracting Party with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments in its territory.
In contrast, the article on national treatment states that:
Each Contracting Party shall accord to investors of the other Contracting Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the expansion, management, conduct, operation and sale or other disposition of investments in its territory.
There is a fundamental difference between these two articles, which I admit are very technical. With regard to national treatment, the agreement does not give the same rights to investors who are getting established or acquiring new companies and therefore making new investments.
That means that, under the terms and conditions of the agreement before us, companies that want to invest in China will not have as much protection as companies that already have investments in China. Clearly, the opposite is also true. Chinese companies that are already investing in Canada have the same rights as a Canadian company. However, Chinese companies that will invest in Canada in the future will not have the same rights as Chinese companies that are already investing in Canada.
As a result, the agreement will protect the $5 billion in investments that we currently have in China, but it will not provide as much protection for future investments that Canadian investors want to make in China. The problem is that Canadian businesses in China are not getting nearly as much protection as Chinese companies and investors that are currently in Canada.
In 2011, we had only about $5 billion worth of investments in China, whereas China had over $22 billion worth of investments in Canada in 2012. From the outset, the agreement is not providing equal protection. This demonstrates a lack of reciprocity and is a blatant problem with the agreement before us today.
I would like to address another aspect that the hon. member for and the official opposition critic for international trade spoke about, and that is the changes being made to non-conforming measures in trade agreements in general.
This agreement allows countries, including China, to keep these measures that do not conform to international treaties.
I will come back to this after question period.