More than two years after signing the Canada–China Foreign Investment Promotion and Protection Agreement (FIPA), Minister for International Trade Ed Fast announced late on Friday, September 12 that Canada had finally ratified the deal.
With China’s earlier ratification, the FIPA entered into force on October 1, and under the terms of the agreement will be binding on both countries for a minimum of 31 years.
Unlike most of Canada’s investment agreements—there are 28 FIPAs in force, 14 signed or concluded, and 11 under negotiation—the treaty with China met widespread opposition from across the political spectrum, with reports of dissention even around the federal cabinet table.
The agreement was roundly criticized for its lack of balance in favour of China. Financial Post columnist Diane Francis said the Conservatives, “have demonstrated the worst negotiating skills since Neville Chamberlin. Ottawa capitulated to China on everything.”
Analysts specifically raised concerns about the agreement’s sweeping investment protection and investor-state dispute settlement (ISDS) provisions, which Osgoode Hall law professor Gus Van Harten warned, “may preclude any changes to legislation that affect negatively a Chinese investor, without taxpayer compensation.”
Perhaps most critically, there were serious questions raised about the constitutionality of the agreement, especially as it relates to the rights of First Nations under Section 35 of the Constitution. It was this concern, and the government’s failure to consult, that led the small Hupacasath First Nation of Port Alberni, B.C., to launch a legal challenge in February 2013 to stop the ratification of the FIPA.
“We realized there was no provision for the protection of Aboriginal rights and title, and considering the power that China has to purchase natural resource–based companies, many of which are based on First Nations land, we decided to challenge it in court,” explains Brenda Sayers, the portfolio holder on the FIPA case for Hupacasath First Nation.
“We wanted to protect our traditional territories for future generations, and we could see that the extraction of natural resources would be expedited if this treaty was ratified.”
Opposition to FIPA coalesced around the Hupacasath legal challenge, and Sayers says that almost $500,000 in donations came in from across Canada to support their legal costs. A Federal Court sided with the government in an August 2013 decision, saying that the impacts on Hupacasath were “speculative, remote and nonappreciable.” The Hupacasath appealed the decisions, and arguments were heard by the Federal Court of Appeal on June 10, 2014.
Despite comments by Minister Fast just months earlier that the FIPA had not been finalized because “there is litigation ongoing with respect to that agreement,” the ratification in September undercut the impending court decision, which was expected in the fall.
“It was totally unexpected given that Canada had been acting in good faith right up to that point in time,” says Sayers. “We had no reason to consider that they would do that. It was quite a shock.”
While the ratification and entry into force throws the Court’s next steps into uncertainty, Hupacasath legal counsel has since asked for leave to make a submission on the implications of the ratification of FIPA. Experts say the FIPA ratification cannot be reversed, but Sayers says it’s still important to make the arguments.
“It could have to do with future deals. And if other First Nations want to challenge any kind of natural resource extraction by Chinese state-owned corporations on their traditional territories, this would be on the record,” she says.
That is also the reason why on October 8 Hupacasath sent a formal letter to the Chinese government, putting it on notice that the community “will not consent to any development in our territory that negatively impacts or abrogates our title and rights.” Other First Nations in B.C. have since followed this lead, and Sayers says she expects more to come.
“There have been so many challenges that we’ve been faced with, that it amazes me the resiliency to push forward and actually make it to the Court of Appeal,” Sayers says. “I believe that we have to keep resisting, in whatever form that might be. We have to continue to stand up and say ‘No.’ We will continue to do everything in our power to resist any development on our lands without our authority.”
Scott Harris is a trade campaigner with The Council of Canadians.