The Conservative government is poised to adopt a sweeping new investment treaty between Canada and China without a single Parliamentary vote or debate.
The text of the Foreign Investment Promotion and Protection Agreement was released for the first time this week and members of Parliament are just starting to work their way through the legal document.
Canada and China first announced a draft deal in February during a visit to Beijing by Prime Minister Stephen Harper.
The final version was signed Sept. 9 in Vladivokstok, Russia, on the sidelines of the 2012 APEC leaders summit.
The treaty promises to set clear investment rules for Canadians in China and Chinese investors in Canada, but questions are already being raised over the treaty’s provisions for resolving disputes.
It allows companies to file claims for financial damages against other firms or against Canadian or Chinese governments for failing to abide by the agreement.
The claims would be resolved by a tribunal, but the hearings would only be open to the public if both sides agree that it is “in the public interest.”
Such dispute provisions are common in agreements of this type, but opposition MPs warned Thursday that the treaty merits much closer debate and scrutiny given the fact that many Chinese investments come in the form of companies that are directly controlled by China’s communist government.
“I think we should have a full debate about this,” said NDP trade critic Don Davies.
“Surely we can take the time to make sure the agreements we sign are sound and good for Canadians.”
The proposed $15.1-billion takeover of Canada’s Nexen Inc. by China’s CNOOC Ltd., a state-owned energy firm, has triggered a debate across the country and inside government over how Canada should respond to China’s huge appetite for investment opportunities.
Yet there is no government-sanctioned debate planned on the new treaty that will govern investment between the two countries for at least the next 15 years.
The Conservative government is of the view that adopting the treaty does not require it to introduce legislation in Parliament.
Instead, it is following a process approved in 2008 that allows treaties to be adopted by cabinet without a vote in Parliament 21 days after the text of the treaty has been tabled.
The text of the Canada-China treaty was quietly tabled in the House of Commons on Wednesday.
Adam Taylor, a spokesman for Trade Minister Ed Fast, said the opposition is free to use one of its “opposition days” to debate the treaty.
Unlike other trade promotion and protection deals, the Canada-China version contains provisions that only apply to investors who are already operating in the other’s country and not to investors who wish to enter.
“It’s a fairly weak deal,” Carleton University trade specialist Michael Hart said Thursday.
“It’s not the desirable version; it’s the ‘we’ve got started’ version. And with China, that’s where we’re at,” he said.
Mr. Hart said it is not unusual for trade agreements to include closed-door arbitration hearings in the event of a dispute.
“Arbitration panels are closed door or else you don’t get amicable agreement.
“Once you make the thing open to the public, you make it far more difficult to get it resolved,” he said.
Dispute-panel hearings under the North American free-trade agreement are often held in private, though there is typically a public record of the facts and arguments of the case, he said.
Similar dispute provisions in Chapter 11 of NAFTA agreement have provoked considerable controversy, as critics say the provisions limit the ability of governments to approve regulations in areas like the environment and health.
Mr. Hart said governments are free to impose new environmental or other regulations on foreign investors, so long as the regulations don’t discriminate against them or single them out.