mr. harper goes to china china sees him coming

On the first day of his trip to China this week, Stephen Harper signed a Foreign Investment Protection Agreement with his hosts. That makes 28 countries with which we've entered into a FIPA, or charter of rights for corporations.

On the first day of his trip to China this week, Stephen Harper signed a Foreign Investment Protection Agreement with his hosts. That makes 28 countries with which we’ve entered into a FIPA, or charter of rights for corporations. According to the Government of Canada website, a FIPA provides “binding obligations on host governments regarding their treatment of foreign investors and investments.” It is designed to “promote and protect foreign investment.”

Two Chinese state-owned corporations, Chinese Investment Corp. and Sinotec, recently purchased a $350-million block of shares in the Canadian exploration company, Sunshine Oilsands, the largest single trade anywhere in the world so far this year. That’s a drop in a multi-billion-dollar ocean of Chinese investment in Canadian oil. In 2010 alone, China invested $14.2 billion in the Canadian resource economy, most of it in bitumen, while Canadian companies invested $4.8 billion in China, almost exclusively on cheap labour.

Having cemented the deal on corporate rights, Harper will now go on to have “a frank and respectful dialogue” with Chinese leaders on the subject of human rights. Expect this conversation to be short, if not sweet. How much is there to say that is at once frank and respectful about torture, slavery, child labour, arbitrary arrest and detention, a total lack of press freedom and repression of religious and ethnic minorities?

Whatever Harper has to say about human rights, Chinese leaders will ignore him. Why shouldn’t they? He knows as well as they do that China’s total disregard of human rights is not incidental, it’s part of the bargain. It keeps the labour cheap, which keeps the wheels spinning and the oil flowing. Chinese trade and repression go together today like sugar and slavery 200 years ago.

For Canadians, the upside of this devil’s bargain is supposed to be that however nasty it may be for those other poor sods, at least it makes us richer. But according to an analysis submitted to the National Energy Board by former ICBC CEO Robyn Allan, the Northern Gateway Pipeline – the only large-scale scheme to export Canadian bitumen to China -“poses a serious threat to economic growth and long-term development” in Canada.

Allan, a respected economist, found that the pipeline would push the Canadian domestic price for oil up by $2 to $3 a barrel, contributing to inflation and “reducing output, employment, labour income and government revenues.” In a scathing report she denounces Enbridge’s economic benefit models as based on “misleading information, faulty methodology, numerous errors and presentation bias,” and warns that by exporting bitumen to China, Canada will be “importing inflation.”

At the same time, CJ Peters Associates Engineering in Prince George has done an Energy Return On Investment analysis on the pipeline proposal. An EROI measures the energy employed in producing energy to see what the net benefit might be. In the case of Northern Gateway the answer is, not much. By the time they ship gas from Australia, pipe it to Athabaska, burn it to extract the bitumen, pipe the bitumen to the coast and ship it to China to be refined, the process has used almost as much energy as it produces.

What happens when this bubble bursts? When some future Canadian government realizes that the whole tarsands pyramid scheme is tanking our economy, can we stop? Even when it’s fully understood to be a threat to growth, a driver of inflation, and no gain in energy, China’s investment in the tarsands will still be promoted and protected by FIPA.

Here is the Harper government’s grand plan for the Canadian economy: investor rights for state corporations from a brutal communist regime strip mining bitumen out of the boreal forest to power a huge industrial expansion, which will make them the world’s economic and military superpower in the next 20 years. China gets access to vast untapped energy reserves in Canada, we get cheap trade goods, lost manufacturing jobs, a brief economic bubble during which we provide the fuel for our own colonization, and then inflation, unemployment and a bill for the cleanup.

Despite the fact that this scheme will generate next to no real wealth, and will damage the Canadian economy, corporations both communist and capitalist will rake in huge profits. In order for this to work, somebody has to get fleeced. Stephen Harper is Canada’s lead player in this multi-billion-dollar shell-game. You have to wonder, is he the carnie, or the mark?

Al Pope won the Ma Murray Award for Best Columnist in BC/Yukon in 2010 and 2002. His novel, Bad Latitudes, is available in bookstores.