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China's Mounting Challenge to Our National Sovereignty

Foreign-staffed mines in BC, Nexen on the block and the FIPA giveaway... wake up Canada!

Bill Tieleman 23 Oct

Bill Tieleman is a regular Tyee contributor who writes a column on B.C. politics every Tuesday in 24 Hours newspaper. E-mail him at [email protected] or visit his blog.

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Flag image via Shutterstock.

"Let China sleep, for when she awakes, she will shake the world." -- Napoleon Bonaparte, 1769-1821

How will Canada deal with the China challenge to our national sovereignty?

It may be the most important question facing the country, with far more dire consequences than the election of a separatist provincial government in Quebec.

Is Canada sleepwalking towards a future day when a communist-ruled undemocratic China has significant control of key parts of our economy? The evidence is mounting.

This month we learned the BC Liberal and federal Conservative governments are jointly allowing up to 2,000 miners from China to operate as many as four planned coal mines, despite that country having the deadliest coal industry in the world.

The Canadian Dehua International Mines Group, which is planning all four mines, claims it cannot find any Canadian coal miners to fill the jobs, but the United Steelworkers union discovered that ads advertising the positions listed speaking Mandarin as a requirement. The jobs also pay as little as half the going Canadian pay rates for miners.

A spokesperson for one of the companies partnering in the mine, HD Mining International, said the ads were a mistake and have been withdrawn.

Then there's the proposed $15-billion purchase of Calgary-based oil and gas giant Nexen Inc. by Chinese state-owned China National Offshore Oil Corporation -- a deal the federal government must approve before it can proceed.

Nexen shareholders have already approved the acquisition and no wonder -- CNOOC is willing to pay a 66 per cent premium on its average trading price.

But will the Conservative government risk both Chinese government and Nexen shareholder anger by rejecting the deal as not having a "net benefit" to Canada?

The odds seemed strongly stacked against that.

Interest in resources, telecom

Conservative International Trade Minister Ed Fast was quick to say that the government decision last week to reject the $5.2 billion takeover of Calgary-based Progress Energy Resources by Petronas, the Malaysian state-owned company, doesn't mean the CNOOC acquisition of Nexen will be rejected.

"This decision does not set a precedent because every single application is considered on its own merits," Fast said. "Each application has its own specific circumstances that are being brought to bear."

That's hardly reassuring to anyone concerned about loss of Canadian ownership of key natural resources.

Yet key U.S. Democrats oppose the Nexen takeover by CNOOC, something that may affect Harper's decision.

Howard Dean, the influential former Vermont governor and Democratic presidential nomination contender, is warning Canada could face a U.S. backlash if it authorizes a CNOOC purchase of Nexen.

"I personally don't think that's a good idea for either Canadian or American assets," Dean told Tom Clark on Global News program The West Block.

There are also questions about the role of Chinese telecom giant Huawei Technologies in Canada.

Earlier this month the Conservative government made an unusual comment about the possibility that Huawei might bid on rebuilding Ottawa's telecommunications network.

A U.S. Congressional committee alleged on Oct. 9 that: Huawei was "already known to be a major perpetrator of cyber espionage." Huawei "unequivocally denies" those claims.

The next day Andrew MacDougall, Conservative Prime Minister Stephen Harper's communications director, made this less than cryptic comment: "The government's going to be choosing carefully in the construction of this network, and it has invoked the national security exception for the building of this network.

"I'm not going to comment on any one company in particular. I'll leave it to you if you think Huawei should be a part of a Canadian government security system," MacDougall said.

Ironically, perhaps, many Canadians are the proud owners of Huawei cell phones.

The biggest threat

But perhaps the biggest threat is Conservative Prime Minister Stephen Harper's plan to implement the Canada-China Foreign Investment Promotion and Protection Agreement (FIPA) by Nov. 1.

Gus Van Harten, an Osgoode Hall law professor and global authority on international trade deals, says he is "deeply concerned about the implications for Canada" and urges the government to reconsider based on 14 different reasons.

"The legal consequences of the treaty will be irreversible by any Canadian court, legislature or other decision-maker for 31 years after the treaty is given effect," Van Harten wrote in a letter to Harper, adding that it has a 15-year minimum term.

Other key arguments against the China-Canada treaty include that in order to sue under its provisions, a Chinese company requires only a minority share in any Canadian enterprise or other asset in Canada and that "Chinese asset-owners in Canada will be able, at their option, to challenge Canadian legislative, executive, or judicial decisions outside of the Canadian legal system and Canadian courts."

In another analysis, The Tyee's Andrew Nikiforuk describes the agreement as "economic treason."

Napoleon Bonaparte eventually met his Waterloo -- is the Canada-China deal our fatal losing battle on national sovereignty?  [Tyee]

Read more: Politics

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