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Pressure mounts with Tories ready to ratify China trade deal by Thursday

Canada's Prime Minister Stephen Harper walks with China's President Hu Jintao on Parliament Hill in 2010.


The Harper government will be in a position to ratify a highly controversial investment treaty with China on Thursday, but is not indicating when it intends to give final endorsement to the deal.

Opposition MPs and non-government groups are demanding that the government submit the agreement to a parliamentary committee for a thorough airing. Critics argue Chinese companies will gain major powers to challenge any effort by any Canadian government to impose tougher environmental laws or other regulations – a charge the government rejects.

In the House of Commons on Tuesday, New Democratic MP Paul Dewar said the government has shown undue haste in approving the Foreign Investment Promotion and Protection Agreement, after activists presented a petition bearing 60,000 names calling for a public debate.

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In an interview, Mr. Dewar said the agreement appears to provide greater benefits to Chinese firms that want to invest in Canada, rather than Canadian companies that target the Chinese market.

"There's not a level playing field and that's what we want to see," Mr. Dewar said. Noting the agreement would be set in stone for 31 years, the NDP MP said that it's important to "get it right" and that the government should submit to a committee to hold hearings.

Prime Minister Stephen Harper and Chinese President Hu Jintao signed the agreement in early September, and the government tabled it in Parliament late last month, for a mandatory 21-day period. As of Thursday, the government can ratify the deal through an order-in-council, though it now appears that ratification will wait until Mr. Harper returns from an eight-day trip to Asia, which begins Saturday.

International Trade Minister Ed Fast said the NDP had opportunities to debate FIPA in the House of Commons on three separate occasions, but chose other issues.

"This agreement represents a very significant step forward in protecting Canadians when they invest in China," Mr. Fast told the Commons. "The treaty will give Canadian investors greater confidence when they invest in China, in turn creating jobs and economic growth right here at home."

Under the agreement, investors in both countries will be able to challenge what they perceive as discriminatory treatment or expropriation to an arbitration panel, which can order governments to pay damages. The deal does not require governments to open the arbitration cases to public scrutiny, though the Harper government is committed to do so when it is the respondent in a case.

Green Party Leader Elizabeth May said the bilateral agreement will leave Canada as a "resource colony," as Chinese firms gain the power to block environmental and other regulations that would reduce the value of their investments. Adam Taylor, a spokesman for Mr. Fast, rejected that charge, saying the deal "does not impair Canada's ability to regulate and legislate in areas such as the environment, culture, safety, health and conservation."

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York University law professor Gus Van Harten said the agreement allows governments to impose regulations that are "necessary" to protect human health and the environment. But in a legal challenge to a specific new regulation, arbitrators could decide that a government could have taken a less costly, or less discriminatory approach, and therefore award damages to the foreign investor, he said.

International lawyer Peter Glossop, of Osler, Hoskin & Harcourt LLP, said Canadian investors in China will reap major benefits from the deal by being able to avoid Chinese courts and get an arbitrator's ruling on disputes. Mr. Glossop said the agreement is a "step forward," but "ought to have a better airing" so that Canadians could have a clear understanding of how it will work.

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