Canada's New Investment Agreement With China Will Take Precedence Over Canadian Constitution for 31 Years

from the above-the-law dept

Here on Techdirt we've been covering the secrecy surrounding CETA, the trade agreement between the EU and Canada, and its problematic inclusion of a corporate sovereignty chapter. But while attention has been focused here, the Canadian government is sneaking through a bilateral investment treaty with China that is arguably worse in every respect -- at least for Canadians. Here's how the Council of Canadians described the move:

In the world of official government announcements, a two-paragraph media release sent out in the late afternoon on the Friday before Parliament resumes sitting is the best way for a government to admit, "We know this is really, really unpopular, but we're doing it anyway."

That's the way the Harper government, by way of a release quoting Trade Minister Ed Fast, announced that it had decided to ignore widespread public opposition, parliamentary opposition from the NDP, Greens and even lukewarm Liberal criticism, an ongoing First Nations legal challenge, and even division at its own cabinet table and grassroots membership and proceed with the ratification of the Canada-China Foreign Investment Promotion and Protection Agreement (FIPA).

The key problem, as is increasingly the case with international agreements, is the inclusion of far-reaching investor-state dispute settlement (ISDS) measures that would allow China to sue the Canadian people. Here's what the treaty law expert Gus Van Harten told the Vancouver Observer:

"It is true that Chinese investors can sue Canada for any actions by the federal government or the [British Colombia] government (or legislature or courts) relating to Chinese assets connected to the [Enbridge] Northern Gateway pipeline," Van Harten said.

China's investment in Canada is huge: Chinese companies have invested over $30 billion in Canada's energy industry alone. That means there is plenty of scope for new regulations or laws to affect those investments, and to give rise to claims -- or for those regulations and laws to be dropped because of such a threat. The deep secrecy surrounding FIPA even extends to ISDS actions:

"there is no requirement in the treaty for the federal government to make public the fact of a Chinese investor's lawsuit against Canada until an award has been issued by a tribunal. This means that the federal government could settle the lawsuit, including by varying its conduct in a way that many Canadians would oppose, or by paying out public money before an award is issued, and we would never know."

As the Council of Canadians post mentioned, the Canadian government has ratified this agreement even though a major legal challenge against it is still pending -- effectively making the decision irrelevant. That's because of another astonishing aspect of the deal, explained by Van Harten as follows:

"Even if found unconstitutional by a court down the road...once the treaty has been ratified, none of the obligations assumed by Canada can be modified unless China agrees," he said.

In other words, the agreement, which runs until 2045, has given itself priority over Canada's constitution for the next 31 years. That abrogation of government power and the erosion of democracy it entails both emphasize how completely corporate sovereignty now trumps the old-fashioned, national kind.

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Filed Under: canada, ceta, china, corporate sovereignty, fipa, isds, sovereignty