Why Should Canadians Care About Investor-State Treaties?
First published in Householders Spring 2013 Newsletter
One of the issues that was frequently raised in the last round of town hall meetings I held with constituents in January 2013 was the threat of the Canada-China Investment Treaty. As I write this, the treaty has still not been ratified. While this is very good news, the treaty could be ratified at any time by a decision of the Prime Minister and his Cabinet. If ratified, the treaty would be binding on Canada and on future Canadian governments for a minimum of 31 years.
Meanwhile, there have been a number of interesting developments in countries around the world related to this type of treaty, often called a Foreign Investment Protection and Promotion Agreement (FIPPA or FIPA). Australia recently undertook a cost-benefit study of investment treaties, which showed that these treaties create far greater costs than benefits. Since this study, Australia has taken a new and strong position: they have decided not to enter into any new FIPAs. Similarly, India also recently decided that it would not only reject any new investor-state treaties, it would also attempt to re-negotiate any existing treaties that contained investor state clauses. India’s new stance may come as a surprise to the PM as it was just last fall that Stephen Harper returned from India claiming a Canada-India Investor-State agreement was just around the corner. Meanwhile, South Africa is also reconsidering its investor-state agreements, and a recent international report which makes clear the social and monetary costs of these agreements is likely to influence other nations to also reconsider entering into investor-state agreements.
I am writing this newsletter in response to the large number of my constituents who have asked for more information on these types of treaties, and I hope you find this information helpful and will share it with others.