Canada liable to compensate Chinese companies for COVID-19 losses under Harper govt trade agreement

Canada is liable to compensate Chinese companies for losses incurred due to the coronavirus disease (COVID-19) pandemic, under the terms of a trade agreement the Harper government signed with China.

Former Prime Minister Stephen Harper’s Conservative government signed the Agreement Between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments[1], commonly known as FIPA, with China on September 9, 2012 without even releasing the full text to the public.

The Harper government ratified the agreement two year later in October 2014 despite warnings from experts and labour, human rights and environmental advocates that the agreement was detrimental to Canada’s interests.

“Article 11 of the FIPA states that if Chinese firms in Canada suffer losses due to ‘war, state of national emergency, insurrection, riot or other similar events,’ they can sue the Canadian government for compensations,” explains Mukesh Khanal of University of Calgary’s The School of Public Policy. “War and insurrection are well-understood concepts. War is an armed combat or conflict within a country or between different countries. An insurrection is a violent rebellion by the people against their own government. However, a riot or a national emergency needs to be defined clearly.”

However, Canadian firms may not be able to sue China for compensation easily.

“The FIPA is clear that Canadian firms in China cannot approach Chinese courts for dispute settlement,” Khanal explains. “Annex C.21 of the FIPA suggests that Canadian firms in China have to first ‘make use of the domestic administrative reconsideration procedure.’ If they are not satisfied with the resolutions from that procedure, they can submit claims to arbitration. The FIPA does not mention if Canadian firms in China can register a case in the Chinese courts. That is a disadvantage to the Canadian firms in China because there is no guarantee that the reconsideration procedure will be unbiased because it is not a judicial body.”

And Chinese companies can sue the Canadian government in court, or in secretive tribunals, but the same privilege is not extended to Canadian firms who seek to sue China.

“Chinese firms in Canada are not forced to first approach one particular mechanism before
approaching another,” explains Khanal. “They are free to approach either a Canadian court or a FIPA tribunal.”

“On the other hand, Canadian firms in China should first approach the administrative reconsideration procedure, a bureaucratic set-up created by the Chinese government, for
dispute settlement,” adds Khanal. “If unsatisfied with the procedure’s decision, the firms can approach a FIPA tribunal. They are not allowed to approach a tribunal directly in the first place, which is a luxury Chinese firms in Canada have. This presents the Chinese firms in Canada with a clear advantage over Canadian firms in China.”

Chinese foreign direct investments to Canada stood at $17 billion at the end of 2018 according to Statistics Canada[2]Table 36-10-0008-01

The Conservatives defended their decision to go ahead with the deal saying Canadian jobs depended on it.

“China is the second-largest economy in the world,” Former Parliamentary Secretary to the Minister of International Trade and current party leadership candidate Erin O’Toole told parliament when questioned about FIPA ratification. “Canadian exporters are selling to and dealing with that country on a daily basis, and the jobs created from that account for one in five jobs in Canada.”

“Canadian exporters have been asking for protection,” added O’Toole. “The P in FIPA stands for ‘protection’. This will give these companies certainty in their contractual dealings in China.”

The COVID-19 pandemic, which began in Wuhan, China, has infected over 2.3 million people worldwide and claimed more than 160,000 lives.

References   [ + ]

2. Table 36-10-0008-01

23 Responses to Canada liable to compensate Chinese companies for COVID-19 losses under Harper govt trade agreement

  1. Big C Conservative says:

    “Mukesh Khanal” doesn’t sound like a Canadian name. He/she is probably some Syrian “refugee” trudeau brought over who hates Harper.

    Harper made Canada safe and prosperous. We need Harper back.

  2. J.C. says:

    You’re not smart enough to challenge the content so you attack the writer. If the writer is indeed an immigrant, I’m happy, because it confirms that we are attracting intelligent people.
    On the other hand, if you were the immigrant, I’d wonder since when bigotry and xenophobia were prerequisites for admission to this wonderful country.

  3. Howard Stern says:

    This situation has made it so I will have no choice but to persue income criminally as after 3 moths of back rent car payments and other bills that are racking up, curb payments are taxable income so 2400$ needs to be paid back after four months of access. SUE CHINA, SUE THE FEDS, SUE SUE SUE everyone! I choose to work only for cash after this pandemic I will make it my life mission to never pay a dime in tax for the rest of my life.

    • Todd Ruthig says:

      Exactly the plan every true Canadian should immediately be employing…discontinue paying taxes, set the appropriate amount aside in a registered trust fund with your lawyer to avoid any tax “evasion” accusations as you are allocating but not supporting Justina Trugroper Castro Pedeau Pedo using your tax money to support terrorist organizations or malfeasant Lieberal criminal corruption or WHO corruption

      • Nick says:

        Neither of you understand how money works.

      • Kyril Kordov says:

        All the bad international deals were approved and created by the conservatives. They are always kissing Yankee butt!
        Canadian Reformatives are a Republican farm team!

      • Kyril Kordov says:

        All the bad international deals were approved and created by the conservatives. They are always kissing Yankee butt!
        Canadian Reformatives are a Republican farm team!

  4. Sunil Haripur. says:

    The Question is Whether Canada has a Safe and Secure position in its agreements with other countries including China. Even if there is something to be improved or change Speak out to Elected Reps to change the policy for future.

    I find Some racism in Comments that has to be removed from Canadian society If we want Canada to be the best place to live.

  5. Anonymous says:

    I don’t think the big “C” stands for Conservative.

  6. donna says:

    Sunil, nobody likes a crybaby tattle-tale. Suck it up. We are always being told we are “racist” at exactly the same time that someone seeks to gain an unfair advantage. The Chinese used that very well and somehow managed to convince our leaders that their concerns were far more important than our own. If I do something stupid in traffic and someone yells “woman driver”, it’s not reasonable to claim discrimination on the basis of gender. It’s simply an exasperated person engaging in a low form of debate. That’s all. Unless you have some shame associated with your race, it really shouldn’t bother you. You probably know very well that you’ve used that to your advantage previously. Enough already!! Stand up and act like a grown man, please? If you can’t be tough enough to tolerate a bit of name-calling, how firm in your convictions are you anyway? Everybody is weary of listening to these petty complaints when there are so many other more important issues that need to be discussed. Complaining like this only erodes your own credibility anyway as well as making people suspicious about what advantage you are attempting to negotiate.

    • Brennan Galloway says:

      I greatly appreciate the complete lack of self-awareness to your comment. The accidental irony is breathtaking.

  7. Evil Genie says:

    I am sure that due to the fact to country that could sue us caused the issue they would not be granted the monies they would be requesting. It is similar to burning down your own house to collect the insurance money. Had they not been the instigators of the Pandemic I would be worried. We could also join the rest of the world in demanding reparations for the damages caused to the Canadian economy. One would cancel out the other.

  8. ada says:

    China is a disease!! STOP ITS BEFORE ITS TO LATE

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