Chinese trade pact for dummies

In 1997, the Canadian government placed a ban on imports of the manganese-based fuel additive MMT, a known neurotoxin.

In 1997, the Canadian government placed a ban on imports of the manganese-based fuel additive MMT, a known neurotoxin. Ethyl Corporation, the manufacturer of the additive, mounted a challenge under NAFTA Chapter 11, and Canada was forced to rescind the ban, pay compensation of $19 million, and make a public statement that MMT poses no health or environmental risk.

It was a precedent-setting decision. Supposedly drafted to prevent governments from discriminating against foreign companies, Chapter 11 could now be used to suppress unprofitable health and environmental legislation.

In a 2010 study, the Centre for Policy Alternatives found that Canadian governments had paid out $157 million in NAFTA claims, and spent tens of millions more on associated legal costs. Today, Lone Pine Resources, a Calgary-based company incorporated in the U.S., is bringing a Chapter 11 case against Quebec for its ban on hydraulic fracturing.

Like MMT, fracking presents known hazards to health and the environment. It takes millions of litres of water to frack a gas well, all of them contaminated with a cocktail of chemicals whose make-up is a secret, but which include such known toxins as ethylene glycol, mercury, uranium, and lead. Water wells in the vicinity of fracked gas wells have been found to contain highly elevated levels of methane – in some cases to the point where tap water will ignite.

Lone Pine may turn out to have no case – not all Chapter 11 challenges succeed – but at the very least it will have forced the Quebec government to spend time and money defending its right to ban fracking.

A couple of weeks ago, a letter appeared in the Yukon News under the signature of MP Ryan Leef – though anyone familiar with his prose style may be excused for doubting that Leef penned this relatively articulate reiteration of the Conservative position on Chinese trade. The letter was an attempt to calm Yukoners’ fears over the Canada-China Foreign Investment Promotion and Protection Act, a trade deal that will give Chinese state-owned companies even greater powers to challenge Canadian law than U.S. and Mexican firms have under NAFTA.

Leef, or whoever, had this to say: “In Yukon, (the agreement) does not detract from legislation that already exists.” Very true. But then, nobody said it does. The problem is that it ties the hands of future governments which might try to change that legislation. So if Yukoners in the future want to raise mining royalties, restrict access to a particular area, ban fracking, or update environmental, health or labour laws in ways that could affect the bottom line of any company wholly or partly owned by China, they face the possibility of a challenge.

Since such a challenge could bankrupt the territorial government, legislation will have to be drafted with care. So even in the best-case scenario, Chinese Communists will exert an influence over the Yukon’s democratic decision-making.

The Leef letter goes on to say that “Chinese investment in Canada will continue to be subject to the Investment Canada Act for both the net benefit test for acquisitions above the applicable threshold and for national security concerns with respect to any investment.” True again, the threshold in question being $1 billion. Which means that a Chinese company purchasing a share of $999 million or less in a Yukon enterprise passes under the radar.

The letter makes the claim that the “Opposition has incorrectly stated that a 15-year notice period is required to end the Foreign Investment Promotion and Protection Agreement with China ….This is wrong. The agreement is a 15-year agreement, after which one year’s notice is required to pull out.” Here is what the agreement itself has to say: “The agreement remains in force for a period of 15 years. After this period, either party may at any time terminate this agreement by giving at least one year’s notice … For investments made prior to the … termination of the agreement … the provisions of the agreement remain in force for a further 15 years.”

So we are locked in for 15 years, after which it could take a further 16 years to disentangle ourselves, which is precisely what critics of the deal have been saying.

According to the Leef letter, “Canada’s economy benefits greatly” from deals like NAFTA and the Chinese trade pact: “jobs get created, businesses are able to grow, and we are able to continue our goal of ensuring Canada’s future in our world.” But what has NAFTA done for Canada? Before it, 19 per cent of our gross domestic product was created by exports to the U.S., most of it in the form of manufactured goods. Today, it’s still 19 per cent, mainly in unprocessed resources.

In a recent Globe and Mail article, economist Jim Stanford demonstrates that NAFTA has done nothing for exports or income growth and that our access to American markets has dropped since Brian Mulroney signed the free trade agreement, as has our balance of trade.

The Canada-China trade deal puts fetters on democratic decision-making in Canada for at least the next 31 years, based on the unproven proposition that such deals are universally good for the economy. The letter Leef wrote, or at least signed, does Yukoners a disservice with its catalogue of half-truths and misrepresentations. I would refer the Yukon’s MP to the government’s own web site, where he can find the text of the agreement. If he’s going to sign off on Conservative Party talking points about the deal, he might as well read it.

Al Pope won the Ma Murray Award for Best Columnist in B.C./Yukon in 2010 and 2002.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Yukon Premier Sandy Silver talks to media on March 5, 2020. The Yukon government said Jan. 25 that it is disappointed in a decision by the federal government to send the Kudz Ze Kayah mining project back to the drawing board. (Crystal Schick/Yukon News file)
Territorial and federal governments at odds over Kudz Ze Kayah mine project

The federal government, backed by Liard First Nation, sent the proposal back to the screening stage


Wyatt’s World for Jan. 27, 2021

An avalanche warning sigh along the South Klondike Highway. Local avalanche safety instructors say interest in courses has risen during the pandemic as more Yukoners explore socially distanced outdoor activities. (Tom Patrick/Yukon News file)
Backcountry busy: COVID-19 has Yukoners heading for the hills

Stable conditions for avalanches have provided a grace period for backcountry newcomers

Several people enter the COVID-19 vaccination clinic at the Coast High Country Inn Convention Centre in Whitehorse on Jan. 26. The Yukon government announced on Jan. 25 that residents of Whitehorse, Ibex Valley, Marsh Lake and Mount Lorne areas 65 and older can now receive their vaccines. (Crystal Schick/Yukon News)
Vaccine appointments available in Whitehorse for residents 65+

Yukoners 65 and older living in Whitehorse are now eligible to receive… Continue reading

The office space at 151 Industrial Road in Marwell. At Whitehorse city council’s Jan. 25 meeting, members voted to sign off on the conditional use approval so Unit 6 at 151 Industrial Rd. can be used for office space. (John Hopkins-Hill/Yukon News file)
Marwell move set for land and building services staff

Conditional use, lease approved for office space

The bus stop at the corner of Industrial and Jasper Road in Whitehorse on Jan. 25. The stop will be moved approximately 80 metres closer to Quartz Road. (Crystal Schick/Yukon News)
UPDATED: Industrial Road bus stop to be relocated

The city has postponed the move indefinitely

The Royal Canadian Mounted Police detachment in Faro photgraphed in 2016. Faro will receive a new RCMP detachment in 2022, replacing the decades-old building currently accommodating officers. (Joel Krahn/Yukon News file)
Faro RCMP tagged for new detachment

Faro will receive a new RCMP detachment in 2022, replacing the decades-old… Continue reading

In a Jan. 18 announcement, the Yukon government said the shingles vaccine is now being publicly funded for Yukoners between age 65 and 70, while the HPV vaccine program has been expanded to all Yukoners up to and including age 26. (
Changes made to shingles, HPV vaccine programs

Pharmacists in the Yukon can now provide the shingles vaccine and the… Continue reading

Parking attendant Const. Ouellet puts a parking ticket on the windshield of a vehicle in downtown Whitehorse on Dec. 6, 2018. The City of Whitehorse is hoping to write of nearly $300,000 in outstanding fees, bylaw fines and court fees, $20,225 of which is attributed to parking fines issued to non-Yukon license plates. (Crystal Schick/Yukon News file)
City of Whitehorse could write off nearly $300,000

The City of Whitehorse could write off $294,345 in outstanding fees, bylaw… Continue reading

Grants available to address gender-based violence

Organizations could receive up to $200,000

In this illustration, artist-journalist Charles Fripp reveals the human side of tragedy on the Stikine trail to the Klondike in 1898. A man chases his partner around the tent with an axe, while a third man follows, attempting to intervene. (The Daily Graphic/July 27, 1898)
History Hunter: Charles Fripp — gold rush artist

The Alaskan coastal town of Wrangell was ill-equipped for the tide of… Continue reading

A man walks passed the polling place sign at city hall in Whitehorse on Oct. 18, 2018. While Whitehorse Mayor Dan Curtis is now setting his sights on the upcoming territorial election, other members of council are still pondering their election plans for the coming year. (Crystal Schick/Yukon News file)
Councillors undecided on election plans

Municipal vote set for Oct. 21

Most Read