To do so, he must put the brakes on the Canada-China investment treaty. The federal government revealed the Canada-China treaty a few weeks ago and is rushing to finalize it. The PM is proceeding without provincial consent, without an opportunity for careful study, and without a serious public debate.
Yet the treaty will hamstring governments across Canada for decades in relation to Chinese-owned assets. This includes, for example, B.C. on Northern Gateway.
Because of the sheer quantity of Chinese investment in play in our resource sector, the Canada-China treaty is the most important development for Canadian sovereignty — especially legislative and judicial authority — since NAFTA.
Yet, in contrast to NAFTA, the deal does not open China to Canadian exports or, with limited exceptions, to Canadian investors.
The thrust of the treaty is to give extraordinary rights to Chinese investors in Canada. The investors’ rights will be fixed for 31 years. This is lopsided, in effect, because Chinese ownership of assets in Canada will almost certainly outstrip Canadian investment in China.
Chinese firms reportedly have bought $13 billion worth of the oilsands since 2010 and are pursuing a major stake in Northern Gateway.
Once the treaty takes effect, all existing and future Chinese investors in Canada will be able to enforce their new rights outside of Canadian courts in opaque extra-territorial tribunals. They are not fair and independent in the manner of a domestic or international court.
Using the Northern Gateway case as an example, the following are arguments that a Chinese investor could make under the treaty.
B.C. Premier Christy Clark has said her province could frustrate the Northern Gateway project by withholding electricity for it.
Under the treaty, a Chinese company can demand “treatment no less favourable than that given to Canadian firms” (Article 6 of the treaty) or to investors from third countries (Article 5). Chance of success? High, I would guess.
What if B.C. blocked the pipeline outright after it was underway? If this required expropriation of real estate or other assets, tangible or intangible, the investor has a right to sue for compensation (Article 10) beyond that available under Canadian law. Chance of success? High for direct expropriations.
To win against Canada, an investor would have to succeed with just one of these arguments. Foreign investors have won on these arguments in other cases. The Chinese investors would likely be assisted by the club of lawyers in Canada and elsewhere who specialize in suing countries (and who may double as arbitrators) in these disputes.
The system is rich for the lawyers and arbitrators, and the stakes are high for taxpayers. To date, the largest award against a country was close to $2 billion.
The danger for Canada is that, on balance, we are the capital-importer under the treaty. This is the first deal Canada has signed, since NAFTA, where this is the case. Thus, under the Canada-China treaty, we will be the sitting duck for investors and a dripping roast for the lawyers and arbitrators.
Original Article
Source: toronto sun
Author: Gus Van Harten
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