Did Prime Minister Justin Trudeau buy the Trans Mountain Pipeline to avoid a trade complaint with China? Was it a contributing factor to the decision?
That is the question The Guardian asked, as Canada is bound by the agreement called the Canada-China Foreign Investment Promotion and Protection Agreement (FIPA), which stipulates that China will have benefits including an oil pipeline built between Alberta and BC to help fuel is rapid industrial growth.
FIPA was ratified in 2014 by the previous Conservative government under Stephen Harper, and it remains in place until 2045.
The agreement followed PetroChina’s 2009 purchase of 60% of the interest in two undeveloped oil sands projects, holding a combined volume of five billion barrels of oil.
Then in 2013, Chinese state-owned CNOOC acquired Nexen, Canada’s third largest oil-and-gas company, for $15.1 billion.
“Yet this FIPA is the sort of agreement that undermines the sovereignty of nations to the benefit of private interests,” wrote Bruce Livesey in The Guardian. “FIPAS are Canada’s name for bilateral investment treaties, which are frequently used by corporations around the world to challenge public policies or community decisions that interfere with their ability to make money.”
And with the particularities of Canada’s FIPA with China, according to Livesey, “allows Chinese energy companies to challenge local, provincial and federal policies or laws that interfere with their ‘right’ to make a profit from energy projects.”
This means “any environmental regulations, or halted pipelines, or First Nations land claims, could be subject to lawsuits brought by Chinese corporate interests.”
The agreement is reciprocal as it allows Canadian companies in China to have the same rights.
Economic linkages between Canada and China could be tightened if a free trade deal is established. Negotiations began in 2016, but it stalled earlier this year when the Chinese communist government took issue with Trudeau’s “progressive” standard proposals on labour, environment, gender, and government issues.
The Canadian federal government’s announcement earlier this week that it will buy the Trans Mountain pipeline for $4.5 billion from Texas-based Kinder Morgan has ensured that fierce attention will remain on the controversial project for the foreseeable future.
On top of the purchase cost to nationalize the infrastructure, a further $6.9 billion is required to build the expanded replacement of the 65-year-old pipeline. A federal crown corporation will oversee the operation and completion of the pipeline, and additional private investors are being sought.
- Federal Government to buy Trans Mountain Pipeline from Kinder Morgan for $4.5B
- BC Liberal leader calls Horgan's pipeline stance 'historic blunder' after federal purchase
- Huge protest rally against federal buyout of Kinder Morgan in Vancouver today
- Trudeau speaks with Rachel Notley following federal pipeline purchase
- Alberta government posts billboards in BC for Trans Mountain Pipeline campaign
- Squamish Nation, City of Vancouver lose Kinder Morgan court challenges