The GNWT’s Dangerous Affair with China

The GNWT’s Dangerous Affair with China

Postby Oscar » Thu Oct 29, 2015 8:11 am

The GNWT’s Dangerous Affair with China

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Why FIPA makes the territorial government's hot pursuit of trade with this superpower toxic for the North.

Lois Little — October 27, 2015

The Government of the NWT under Premier Bob McLeod is having an affair with China. The premier has made five trips to China, offered the Chinese eight NWT rivers for hydroelectric development, and, with Minister Dave Ramsay, tried to recruit 2,000 Chinese immigrants. In September, McLeod pursued this affair on home turf while touring China’s ambassador to Canada around the North.

So what’s behind the GNWT’s interest in China? We’re told that the hundreds of thousands spent courting the Chinese is about ‘spending money to make money’ to grow the NWT economy with Chinese investment. But a closer look shows that it has an uncanny, almost eerie similarity to recently ousted Prime Minister Stephen Harper’s obsession with China. In fact, the similarities are so striking one wonders when McLeod will propose bringing panda bears to the NWT.

Harper’s obsession with China was spurred by his wrongheaded vision of Canada as a supersized petrostate supplying China with bitumen and fracked oil and gas. Northerners have heard this same talk from the GNWT. Last year, speaking at the Inuvik Petroleum Show, McLeod touted the “world-class potential of the Canol shale oil as a major energy source,” citing an estimated 7 billion barrels of potential oil in the NWT, along with an estimated 81 trillion cubic feet of natural gas — not counting offshore reserves in the Beaufort Sea.

Harper’s petro-vision undoubtedly led to the Canada-China Foreign Investment Promotion and Protection Agreement (FIPPA), also known as the China FIPA. The China FIPA, which extends over an astonishing 31 years, came into force on October 1, 2014 without any public debate or comprehensive review of its environmental, health, social, economic, or political impacts, and in spite of a courageous legal challenge by the small Hupacasath First Nation of Vancouver Island.

No obligations

The Hupacasath argued that Canada had a duty to consult them over the agreement, and that if that consultation had happened, the Hupacasath’s Indigenous rights, title, and sovereignty would have had to have been protected within it. They lost their challenge, and its appeal, in federal court. According to Dr. Judith Sayers, former chief of the Hupacasath First Nation and adjunct professor with the Peter Gustavson School of Business at the University of Victoria, the loss was in part due to the court’s narrow view of the constitutional challenge, and in part due to a lack of understanding of both investor treaties and Indigenous rights and title. But the consequences of muting the power of Indigenous nations, and the message that China FIPA trumps the Constitution, are huge losses for us all. And they seem to confirm the conquering of the democratic state.

The China FIPA will likely have wide-ranging impacts for Northerners attempting to assert jurisdiction through land claim and self-government legislation and newly devolved law-making responsibilities. Under the agreement, the Chinese have no obligation to enter into impact-benefit agreements with rights holders, so northern hires and other benefits from a large project such as a mine, would not necessarily accrue to land-claim beneficiaries.

The agreement will also likely frustrate Northerners’ efforts to manage climate change and steward natural resources in ways that benefit local people and our environment. Why?

A secretive dispute mechanism

According to Gus Van Harten, an Osgoode Hall law professor and vocal critic of the China FIPA, the federal government surrendered Indigenous, public government and judicial sovereignty when it ratified the agreement. That’s a big claim, but Van Harten says the deal gives more weight to Chinese investors’ rights to make profits than democratically elected legislators’ rights to make or change existing laws and policies. And if a new or revised law interfered with those profits, China can sue Canada in secret, by an arbitration process outside of Canadian courts.

Van Harten says this dispute mechanism is so secretive that it is possible that no citizen, community, or elected official will ever know that Canada has been sued, the terms of the settlement, or what compensation has been paid. In other words, laws could be violated and public funds syphoned off to China, and we would be none the wiser.

The China FIPA is not a ‘free trade’ agreement. As its name states, it is a foreign investor promotion and protection agreement. It expands the foreign investor protection system enshrined in the North America Free Trade Agreement (NAFTA), which moves rights and powers from governments and legal structures to multinational corporations and their international lawyers.

In his book, Sold Down the Yangtze, Canada’s Lopsided Investment Deal with China, Van Harten says that:

• Canadian workers may be squeezed by imported Chinese labour

• Canadian companies may lose out in bids where a larger Chinese firm opts instead for Chinese suppliers

• Canadian municipalities may come under pressure from Chinese developers

• Canadians in general may suffer from environmental damage that is more risky for a government to regulate because it comes from a Chinese source

As well, all of those extraordinary rights, powers, and protections given to Chinese investors in Canada are not reciprocal. In a Northern context, that means if the Inuvialuit Regional Corporation, for example, had business interests in China, they wouldn’t get all of the same rights and powers afforded to Chinese investors in Canada.

A toxic affair

When Northerners consider Premier McLeod’s affair with China, we have to wonder: did he or any of his advisors question briefings from Ottawa or read the China FIPA? Or did the Premier just blindly follow Stephen Harper’s lead, overlooking his well-known disdain of public and Indigenous governments and constitutionally protected rights and freedoms?

After all, why would the Premier court investment from a country that has the power to secretively challenge, override, and/or be compensated for virtually anything that any Canadian government or court does that violates that foreign investor’s profit? Why would the Premier hamstring new law-making authorities under his beloved devolution deal? Why would any leader undermine the implementation of hard fought land claim and self-government agreements, or privilege foreign investors over citizens and the environment and our efforts to manage climate change? There are no apparent answers to these questions.

Whether the 18th NWT Assembly elected in November will continue its affair with China is unknown. What is known is that Canada is locked into a long-term deal with China that could trample on much of what we value as Northern people. While Premier McLeod rightly trumpets the richness of our natural world, his affair with China could be very dangerous, if not toxic.

From this northerner’s perspective, the premier’s affair with China is nothing short of collusion to shift democratic rights and powers out of our hands into those of Chinese investors. And the China FIPA gives him the tools to do this. But we shouldn’t sit idly by while he peddles away our home and future. We should take power. We can do this by focusing our energies and talents on building local economies that we control, and by electing politicians who support our efforts.

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Lois Little is a founding partner of Lutra Associates, a Yellowknife-based socio-economic research and management consulting firm. She is also co-chair of the NWT Chapter of the Council of Canadians.
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