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Canada ratifies controversial investor deal with China

International Trade Minister Ed Fast responds to a question during question period in the House of Commons on Parliament Hill in Ottawa on Thursday, May 29, 2014.

Sean Kilpatrick/THE CANADIAN PRESS

Canada is enacting a long-delayed foreign-investor protection agreement with China, a move Beijing watchers interpret as an effort to ease strained relations and spur the release of Canadians accused of spying before Prime Minister Stephen Harper makes a November visit to the Asian country.

"We need something from China prior to the Prime Minister's visit, and we're ratifying this treaty and we're kicking the ball over to the Chinese side to get something in return," said Wenran Jiang, a senior fellow at the Asia Pacific Foundation of Canada and a special adviser to the Alberta government.

On Friday, International Trade Minister Ed Fast announced the treaty, signed two years ago, had been ratified and would come into force on Oct. 1.

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The treaty provides assurances that Chinese investors will be treated fairly under Canadian law and benefit from a predictable and transparent set of rules for investing, including how they might try to seek compensation for government actions that damage their investment.

The deal offers Canadian companies the same protections in China.

The 2012 treaty's progress got bogged down amid controversy about state-owned Chinese firms investing in Canada and divided opinion within the Harper government over how to handle Beijing.

Mr. Jiang calls the bilateral relationship between Canada and China today "very chilly." Ottawa publicly blamed Beijing this summer for the hacking of Canadian government computers, and shortly after, the Chinese detained a Canadian couple living in China and accused them of stealing military and defence secrets.

Mr. Harper is expected to visit Beijing in November for a global summit of Asia-Pacific Economic Co-operation (APEC) leaders, but Mr. Jiang said it has long been anticipated the trip would amount to more than merely attending the APEC forum.

The spying and hacking accusations, however, have complicated plans for an expanded visit by Mr. Harper that would include meetings with senior Chinese leaders.

Mr. Jiang said negotiations are taking place to determine whether this might still happen and whether Beijing could release the Canadian couple, if not immediately, then on some agreed-upon schedule after Mr. Harper's visit. "Otherwise, it would be very awkward for Mr. Harper if he had nothing to take back" home, he said.

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Ratifying and enacting the Canada-China treaty is Ottawa's signal it wants to move ahead.

"That approval is an effort to patch up and amend the relationship," he said.

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About the Author
Parliamentary reporter

Steven Chase has covered federal politics in Ottawa for The Globe since mid-2001, arriving there a few months before 9/11. He previously worked in the paper's Vancouver and Calgary bureaus. Prior to that, he reported on Alberta politics for the Calgary Herald and the Calgary Sun, and on national issues for Alberta Report. More

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