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Federal Politics

Harper Trade Deals Selling off Canada's Democracy

What if provincial governments were as brave as the Hupacasath First Nation?

Murray Dobbin 30 Sep

Murray Dobbin contributes his State of the Nation column to The Tyee and Rabble. Find his previous Tyee columns here.

There seems virtually no limit to Stephen Harper's efforts to diminish government and democracy in this country. The prime minister's obvious contempt for democracy keeps getting underlined by the grotesque corruption of the people he appoints and surrounds himself with. If he had a modicum of genuine respect for democracy he would be more careful about who he appoints to the Senate and who he allows to run for the Conservatives. More importantly, he would create a political culture that unequivocally rejects the kind of unethical behaviour that has now become the trademark of his administration. These miscreants know exactly what Harper expects of them -- power at any cost and a wink and a nod at personal graft, until you get caught, of course.

That corruption and moral turpitude is bad enough (the breaking of election rules across the country may even have determined the outcome of the last election). But even worse is Harper's determination to make it as difficult as possible for future governments to actually govern. He does this in two ways.

First, by gutting the government's capacity to raise revenue while demonizing taxes.

His right-wing storm troopers in the media and think-tanks have made raising taxes tantamount to political suicide -- even though a strong majority of Canadians say they would pay more. Harper's strategy is much the same as that of the influential American tax-cut activist Grover Norquist, famous for saying; "Our goal is to shrink government to the size where we can drown it in a bathtub."

Investment myths

The second front of this war on democracy is the plethora of so-called trade deals -- really Corporate Rights Deals (CRDs) -- that Harper is busy negotiating. These odious agreements are always touted for their job creating prowess -- the Big Lie technique repeated over and over again. They typically jettison the best jobs. Their promoters rarely talk about the most important aspect of these constitution-busting agreements: their investment provisions.

Investment is always portrayed as a good thing, period. It creates jobs, increases tax revenues, grows the economy. But the conditions under which investment takes place can quickly cancel out many of those benefits. Just look at any Third World country and the other side of the coin: starvation wages, terrible working conditions, horrendous pollution, environmental destruction and political corruption.

While we are a long way from enduring the worst conditions of investment, the principle aim of these CRDs is to make it more and more difficult for governments to regulate and determine the conditions under which investment happens in Canada. The key provision now finds its way into virtually every bilateral investment agreement.

Since signing the pattern agreement NAFTA, Canada has signed 24 of these deals, mostly with small countries. But perhaps the most egregious of them all is the one already signed, in complete secrecy, with China: The Canada-China Foreign Investment Promotion and Protection Agreement (FIPA).

What we're poised to give China

FIPA has not been ratified yet but it threatens to give the enormous, often corrupt, always secretive state-owned corporations of China enormous power -- power to hoover up dozens of energy and resource companies and prairie farm land as well as challenge any new law that attempts to ensure the public interest is being met.

It is stunningly one-sided. It is almost as if Harper is using the deal not for trade or investment at all, but to deliberately poison the legislative well so that future governments will be unable to act. The notion that this was deal was "negotiated" seems a euphemism -- it might just as well have been written by China without consultation. (Come to think of it, that pretty much describes the initial Free Trade Agreement with the US, too: "Okay Sam, we'll give you everything but that's our final offer.")

The deal theoretically provides some protection for Canadian investment -- though the corruption and discrimination against foreign companies in China is actually getting worse. But there is very little Canadian investment targeting China. One reason: According to the Organisation for Economic Co-operation and Development (OECD), China is one of the most restrictive places in the world to invest, and last year it passed new restrictions based on "national security."

Most CRDs do not bind governments for long periods of time. Canada could get out of NAFTA by giving six months notice. But the FIPA will last for 31 years -- almost eight normal government mandates. We can only get out after 15 years, with one year's notice, and all the provisions implemented to that date remain in effect for another 15 years. Did China bargain hard for this outrageous time frame -- or was it the Harper government's idea?

Crumbs for Canada

If China did bargain hard for the 31 years, why would the Harper government not demand in return something resembling fair access for Canadian investors to China? In past agreements, Canadian corporations actually helped write the provisions. Are they sanguine about getting nothing in the way of preferred access for investments and Canadian exports?

Whatever the case, Canadian governments got virtually nothing for the long timeline. It may be that Harper's fawning commitment to the oil and gas industry is behind it. Harper's elimination of environmental review on 99 per cent of the waterways of the country is an outrage that other political parties would be pressured to reverse if elected. FIPA, anticipating China's increased interest on energy, would make that reversal so expensive if challenged by China that it would be all but impossible to implement.

One faint hope of environmentalists after the passing of Bills C-38 and C-45 (withdrawing federal protection of lakes and waterways) was that pressure could be applied to provinces to step up and replace the law with provincial regulations. Provinces share constitutional authority over the environment with the federal government. But FIPA would allow Chinese corporations to sue all levels of government that pass legislation or regulations that reduce its expected profits. And of all the corporations in the world likely to use investor-state provisions, Chinese state-owned entities carrying out Chinese foreign policy would be at the front of the line.

The chill effect of these investor state regimes is already with us. Not a single new law protecting the environment has been passed by Ottawa since NAFTA was signed 20 years ago. Canada has already paid some $160 million in these corporate law suits and the latest one ups the ante. Pharma giant Eli Lilly is suing Canada for $500 million in compensation over a court decision that invalidated two of its drug patents because they failed to meet the legal standard of "inventive promise." If that suit is successful, public interest legislation of any kind that affects a corporation could simply die in its crib.

Courageous Hupacasath First Nation

And it's not just legislation that is threatened. China has been buying farm land all over the world including New Zealand and Africa (where heated controversy has resulted). Most recently, China purchased five per cent of Ukraine's farmland. They reportedly have their eye on Saskatchewan and there is little its government could do. The provinces don't have legislation dealing with foreign ownership of farmland and now that the treaty has been signed, it could be too late.

Except, it is quite plausible that FIPA is unconstitutional given that provinces have jurisdictions under the British North America Act that cannot be tampered with by Ottawa. The provinces are not party to the treaty, and yet their legislation could be challenged and overturned by a panel of three trade lawyers operating completely outside the political and legal institutions of the country -- and in complete secrecy. Efforts have been made to lobby the provinces to formally reject FIPA. But so far -- despite the posturing of premiers as mini-prime ministers for the past 20 years -- not one of them has had the sense or courage to protect their own jurisdictions. (State governments in the U.S., even one far to the right, have vigorously challenged World Trade Oragnization provisions that affect them and actually prevailed.)

Perhaps they think they can get away with not paying for the judgments against their laws. They should think again. While the Harper government paid the $130-million AbitibiBowater NAFTA judgement against Newfoundland, Harper has warned he won't do it again. "I have indicated that in future, should provincial actions cause significant legal obligations for the government of Canada, the government of Canada will create a mechanism so that it can reclaim monies lost through international trade processes."

Who will save us from this repugnant, anti-democratic initiative? Probably no one. The only player to come to the plate has been the tiny Hupacasath First Nation of B.C., which challenged FIPA in federal court. Unfortunately the judge not only found for the government, he assessed costs to the band of over $100,000. They are appealing and are down to the wire seeking donations to help with the case.

But ultimately it is the provinces which hold the real power to save democracy.

What are they waiting for?  [Tyee]

Read more: Federal Politics

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