Mr. Speaker, I will be sharing my time with the hon. member for Abitibi—Baie-James—Nunavik—Eeyou.
It is with determination that I rise in the House to defend the official opposition motion on the foreign investment promotion and protection agreement between Canada and China. Let me say from the outset that I realize that Canada has always benefited from trade agreements and I recognize the growing significance of emerging countries in these trade relations.
That being said, I will comment on the fact that Canadians' confidence in this government has been breached when it comes to negotiating agreements that have their best interests at heart, namely transparency, reciprocity, equality, and protecting jobs, the environment and communities.
I will draw a parallel between the Prime Minister's recent decision to support the acquisition of two Canadian companies by foreign state-owned corporations—the acquisition of Nexen by CNOOC and Progress Energy by Petronas—and the confusion that was created within the investment community as to this government's intentions with regard to foreign investment in Canada.
Throughout the evaluation process of these acquisitions, and according to the Investment Canada Act, the Conservatives turned a deaf ear to Canadians' concerns and refused to consult them. The Prime Minister made his decision behind closed doors, as he did for the foreign investment promotion and protection agreement between Canada and China. No parliamentary committee will conduct a comprehensive study, despite the NDP's repeated pleas.
In its recent report entitled Foreign Direct Investment and the National Interest: A Way Forward, the Institute for Research on Public Policy condemns the fact that the current government did not reassess the country's investment policies and, what is more, created confusion by introducing the concept of “exceptional circumstances”. The report also outlines Canadians' priorities.
[The net benefit test] should explicitly include references to the effect of the foreign investment on opportunities for Canadian management; benefits and compatibility to trade, fiscal and environmental policies; its potential contribution to advancing Canadian international trade and investment objectives (such as reciprocity); and, for completeness, its possible effect on national security. In addition, the description of some of the existing benefits should be clarified.
Again and again the government has refused to have a profound review of the Investment Canada Act. It is the same with this agreement.
I state here that the foreign investment promotion and protection agreement, FIPA, is a bad deal for Canada. Frankly, the whole thing exposes the Conservatives' rigid tunnel vision ideology when it comes to economic growth. We have to understand that not every trade deal is a good deal. This deal would tie the hands of Canadian provincial governments. It would expose taxpayers to major liabilities, and ultimately, it would not help Canadian investors break into China's market.
We can do better. We must do better.
Let us examine FIPA a bit more closely. In the explanatory note, we see that the agreement remains in force for a period of 15 years. After this period, either party may at any time terminate it, but for investments made prior to that date, the provisions of the agreement remain in force for a further 15 years.
Let us look also at article 6, on national treatment:
Each Contracting Party shall accord to investors of the other Contracting Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to expansion, management, conduct, operation and sale or other disposition of investment in its territory.
This means that it must be allowed to expand its operations as if it were a Canadian company.
Let us examine some of the barriers to foreign investment in China, and I will refer again to the IRPP study. When Canadian investors want to invest in China, they have to go through laws and regulations, and this states some of the names of the laws and regulations in China:
Laws and regulations governing foreign investment include the “Circular of the General Office of the State Council on Establishment of Security Review System Regarding Merger and Acquisition of Domestic Enterprises by Foreign Investors” and “Provisions of the Ministry of Commerce for the Implementation of the Security Review System”.
This report says,
Chinese authorities enjoy broad discretionary power to reject transactions, particularly on national security grounds.
As we see, there are a lot of hurdles for Canadian investors investing in China.
Let us briefly compare China and Canada. In 2011, Canada invested $4.5 billion in China. In contrast, China invested $11 billion, that is to say more than twice as much as Canada. That can be explained by a difference in market size.
This figure more than doubled in 2012, when investors from the People's Republic of China invested over $22.9 billion in order to take over, merge with or enter into joint ventures with Canadian companies. Clearly, Canadian investment in China is not in the same league as Chinese investment in Canada.
Let us continue our comparison. Canada is a market economy and China is not. Canada is part of the Organisation for Economic Co-operation and Development, the OECD, and China is not. In addition, despite inherent differences between the two governments, Canada has strengthened its diplomatic and trade relations with China over the years, which is important.
However, we must understand that these are two very different economies and governments. It is sort of like having a hockey team play against a soccer team, each with its own set of rules and differences. As a result, there was a need for negotiations to be able to create a level playing field.
As I said in the beginning, Canadians have lost trust in the government when it comes to negotiating in a transparent and honest fashion in the best interests of Canadians. The Conservative government has not shown that it can negotiate agreements that are in the best interests of Canadians. Every time, it lacked transparency, it created confusion by refusing to have clear and transparent rules and it refused to hold consultations and to assess the short- and long-term implications of the ratification of agreements or transactions that will have an impact on our institutions and economy.
For all those reasons, the government should inform the Government of the People's Republic of China that it will not ratify the Canada-China foreign investment promotion and protection agreement.