Oct 23 2012

My letter to MP Harper re: FIPA – Nexen takeover and PMO's Reply

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The Right Honourable Stephen Harper
Prime Minister
Government of Canada

Dear Prime Minister Harper,

Please do not continue with the planned CNOOC-Nexen takeover and the Canada-China Foreign Investment Protection Agreement (FIPA).

Please stop natural resource buyout that allow foreign corporations to sue the Canadian government in secret tribunals, restricting Canadians from making democratic decisions about our economy, environment and energy.

Your government promised open Government and promised Canadians information to understand what’s happening now and in our future, I’m asking you to please keep that promise.

This agreement undermines the democratic rights of Canadians. Why are you selling Canada to China? Will we become Canchina? Please stop foreign-ownership and resource extraction until at least 2040.

Please reject the Nexen takeover and the Canada-China investment deal. Let’s start over with a national conversation that brings Canadians together to make responsible choices about the wisest long-term stewardship of our natural resources.

Other countries rejected this same kind of trade deal because it’s bad for their country and we should not ignore their opinions. Please don’t sign it. Thank you for reading this letter.


Priscilla Judd


[important]Nice reply from the Office of the Prime Minister[/important]

Cc: Christian Paradis, P.C., M.P.
Dear Ms. Judd:

Thank you for writing to the Prime Minister. In your e-mail, you raised an issue that falls within the portfolio of the Honourable Christian Paradis, Minister of Industry.

Please be assured that your comments have been carefully noted. I have taken the liberty of forwarding your e-mail to Minister Paradis. I am certain that the Minister will wish to give your views every consideration.

For more information on the Government’s initiatives, you may wish to visit the Prime Minister’s Web site, at www.pm.gc.ca.

Once again, thank you for taking the time to write.

M.F. Bustos
Executive Correspondence Services
for the Prime Minister’s Office
Services de la correspondance
de la haute direction
pour le Cabinet du Premier ministre

1 comment

  1. admin

    Ms. Judd,

    Thank you for copying my office your email to Prime Minister Harper regarding Nexen and FIPA.

    A review was initiated in August, on whether the Nexen proposed investment is to the net benefit of Canada, according to six criteria as set out in the Investment Canada Act. The $15.1-billion CNOOC-Nexen deal — which has been approved by shareholders — represents a net benefit to the country at large. Your government has extended its review of the deal until mid-November while it assesses the benefit to Canada and determines whether the company, which is publicly traded in Hong Kong and New York, operates as a commercial entity. At the same time, Prime Minister Harper has promised to release a new “framework” that will explain the government’s rationale for its decision on the Nexen deal and serve as a guide to other state-owned companies.

    On October 18th the Hon. Christian Paradis, Minister of Industry stated:

    “One thing is certain: every foreign investment made in Canada has to create a net benefit for Canada and every decision has to be made in the best interests of Canada.
    There are factors clearly set out in section 20 of the Investment Canada Act. Again, I repeat: there are guidelines relating to foreign state-owned corporations. In addition, new provisions regarding national security have been put in place. That said, the transaction is being carefully studied as we speak.”

    My view is that the government needs to follow the review process as outlined by the Investment Canada Act. I would like to take this opportunity to outline the federal government’s position and responsibility when it comes to assessing the takeover of a Canadian company by a foreign company.

    The Minister of Industry is conducting a review of the proposed investment, and his approval is required prior to implementation. The Minister approves applications where he is satisfied that a proposed investment is likely to be of net benefit to Canada. The definition of “net benefit” will be very broad in terms of Canada’s overall interest in this transaction.

    In making his determination, the Minister carefully considers the plans, undertakings and other information submitted by the investor (CNOOC) in light of the net benefit factors listed in section 20 of the Investment Canada Act.

    The six factors listed in the Act are:

    – the effect of the investment on the level and nature of economic activity in Canada, including the effect on employment, on resource
    processing and on the utilization of parts, components and services produced in Canada;
    – the degree and significance of participation by Canadians in the Canadian business;
    – the effect of the investment on productivity, industrial efficiency, technological development, product innovation and product variety in Canada;
    – the effect of the investment on competition within any industry or industries in Canada;
    – the compatibility of the investment with national industrial, economic and cultural policies; and,
    – the contribution of the investment to Canada’s ability to compete in world markets.

    As CNOOC is a Chinese state-owned enterprise, the Guidelines–Investments by State Owned Enterprises–Net Benefit Assessment published under the Act apply to this proposed investment.

    The Guidelines clarify that in the review under the ICA, as part of the assessment of the enumerated factors, the Minister will examine:
    – the corporate governance and reporting structure of the non-Canadian;
    – how and the extent to which the non-Canadian is owned or controlled by a state, and;
    – whether the Canadian business to be acquired will continue to have the ability to operate on a commercial basis.

    I can assure you that this transaction will be scrutinized very closely. It is incumbent upon the Chinese to indicate, as the relationship goes forward, their willingness to play by the same rules as Canada.

    I would only add that our government has made targeted amendments to the Investment Canada Act to provide greater transparency to the public, more flexibility in enforcement and an alternative to costly and time-consuming litigation.

    FIPA with China provides important benefits for Canadian investors. For businesses looking to set up in China, China cannot treat a Canadian company less favourably than they would any other foreign company looking to do the same. Fundamentally, this investment treaty will help protect the interests of Canadians.

    Creating a secure, predictable environment for Canadian investors is why, since 2006, we have concluded or brought into force FIPAs with 14 countries, and are actively negotiating with 12 others. The Canada-China FIPA is very similar to the other FIPAs that Canada is a party to. It contains all of the core substantive obligations that are standard in our other FIPAs.

    We have introduced an unprecedented process for putting Canadian international treaties to the scrutiny of the House of Commons. In 2008, our Government announced that treaties between Canada and other states or entities, and which are considered to be governed by public international law, will be tabled in the House of Commons. Accordingly, the Canada-China FIPA was tabled in the House of Commons on September 26, 2012. This reflects our government’s commitment to transparency and accountability.

    With regards to investor-state dispute settlement, it is Canada’s long-standing policy to permit public access to such proceedings. Canada’s FIPA with China is no different. As we do with all other investor-to-state disputes, this FIPA allows Canada to make all documents submitted to an arbitral tribunal available to the public. All decisions of the tribunal will be made public. Ultimately, access to international arbitration will provide Canadian investors with the confidence that comes from recourse to an independent, international body to adjudicate any disputes. It is also important to note that under this treaty, both Canada and China have the right to regulate in the public interest. Chinese investors in Canada must obey the laws and regulations of Canada just as any Canadian investor must.

    At the same time, 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. Decisions by Canada under the Investment Canada Act are excluded from challenge under the provisions of the FIPA.

    We’ve been clear that Canada wants to continue to expand its relationship with China, but we want to see it expand in a way that produces clear benefits for both sides. By ensuring greater protection against discriminatory and arbitrary practices, and enhancing predictability of a market’s policy framework, this FIPA will allow Canadians to invest in China with greater confidence.

    Once again, thank you for bringing your concerns regarding Nexen and FIPA to my attention.


    MP Colin Mayes


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