I have received communications in my office recently asking that the federal government stop the agreement between Canada and China for the Promotion and Reciprocal Protection of Investments, also known by the acronym FIPA.
This is not to be confused with the China National Offshore Oil Corporation’s (CNOOC) proposed acquisition of Nexen Inc., currently being reviewed under the Investment Canada Act.
Although the Internet is a valuable source of information, it is clear from the concerns being expressed that it’s also a source of erroneous information about FIPA.
For instance, claims are being made that this agreement means the wholesale selling off of Canada to China, that it allows China to do business in Canada while ignoring Canada’s environmental standards, and that it gives China uncontrolled ability to extract Canada’s natural resources.
Let me assure constituents that under the terms of FIPA, none of this is accurate.
The agreement in question, negotiations of which began in 1994 and concluded earlier this year, is available to the public and online at www.international.gc.ca.
Documentation related to the parallel environmental assessment is also available there.
Furthermore, the agreement, which offers equal protections under the law to investors both in Canada and in China, explicitly confirms that in no way does FIPA override the Investment Canada Act, which reviews acquisitions by foreign investors to ensure they are of net benefit to Canada.
In determining whether an investment is of “net benefit,” the trade minister considers the following factors:
• The effect on the level of economic activity in Canada, on employment; on resource processing; on the utilization of parts and services produced in Canada and on exports from Canada
• The degree and significance of participation by Canadians in the Canadian business or new Canadian business and in any industry or industries in Canada
• The effect of the investment on productivity, industrial efficiency, technological development, product innovation and product variety in Canada
• The effect of the investment on competition within any industry in Canada
• The compatibility of the investment with national industrial, economic and cultural policies; and
• The contribution of the investment to Canada’s ability to compete in world markets.
The Investment Canada Act is also available online at www.ic.gc.ca
In accordance with the agreement and in terms of public debate, it must be ratified by Parliament and as a result will be tabled for 21 sitting days.
As per the rules of the House of Commons, Opposition parties, elected by the people of Canada, have the opportunity to put forward a motion on this issue so that it can be debated.
In addition, the Standing Committee on International Trade, of which I am a member, is reviewing the agreement and providing Opposition members with the opportunity to examine it.
Transcripts of these meetings are available at www.parl.gc.ca.
Finally, under the Competition Act, the Competition Bureau has a mandate to review any mergers to determine whether they are likely to result in a substantial lessening or prevention of competition.
Canada and China have shared ties with each other for many years and have had official diplomatic relations for 42 years.
On the economic front, China is Canada’s second largest, single-nation trading partner and our most important market in Asia, with two-way merchandise trade reaching almost $65 billion in 2011.
With a population of 1.3 billion and a rapidly expanding middle class, China is one of the largest and fastest growing markets in the world.
In time, it’s expected to become the world’s largest economy.
As a result, Canadian business has enthusiastically pursued trade and investment opportunities in China.
The country is Canada’s third-largest merchandise export market, after the United States and the United Kingdom.
The federal government is committed to creating a secure, predictable environment for Canadian investors, and our investment treaty with China will ensure that the interests of Canadian investors are protected under the law.
I encourage constituents to avail themselves of the information that is available and to resist the misinformation that our economic relationship with China will hurt Canada.
On the contrary, Canada and China have forged a positive relationship with each other for many years.
It would be regressive to give in to forces that would turn back the clock just when Canadian businesses, and local, regional and national economies, are realizing the benefits of investment, jobs and prosperity.
If you have any questions related to this or any other issue related to the federal government please do not hesitate to contact my office at ron@cannan.ca.
