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BC regional health authorities should block sale of seniors’ homes given Canada-China FIPA

When the Trudeau government approved the sale last week of a chain of retirement homes to Cedar Tree Investment Canada, which is backed by Beijing-based Anbang Insurance Group, Council of Canadians chairperson Maude Barlow tweeted, “There are huge trade implications here.”


Barlow was referring to the controversial Canada-China Foreign Investment Promotion and Protection Agreement (FIPA) passed by the Harper Conservative government and the Liberal opposition led by Justin Trudeau in 2014.


Now, Canadian Centre for Policy Alternatives researchers Scott Sinclair and Stuart Trew highlight, “[FIPA] provides Cedar Tree, and its Anbang backers, an extrajudicial means to contest new regulations, such as those to protect vulnerable seniors, ensure quality of care or maintain adequate training and staffing levels in the fast-growing private retirement home industry.”


They add, “If an established Chinese investor objects to stronger regulations (e.g., stricter training requirements, staffing levels or standards of care in retirement homes), the FIPA gives it the option to sue the Canadian government before unaccountable tribunals that are outside the Canadian legal system and courts. Such tribunals are not concerned with whether those regulations are consistent with Canadian law and norms, but only whether they were ‘necessary’, applied in an ‘arbitrary’ manner or violate some other aspect of the FIPA’s broadly worded investor rights.”


Sinclair and Trew suggest that Anbang could lease the properties back to Retirement Concepts and collect on the rent in a “deeply flawed sale-and-lease-back business model” that led to the collapse of Britain’s largest care homes operator in 2011.


They then note, “When the hard times inevitably hit, provincial regulators must step up standards and enforcement to prevent cost cutting on the backs of seniors. If a FIPA tribunal were to find that new regulations undermined the value of the company’s investment, Canadian taxpayers would be left holding the bag. For example, requirements to reinvest revenues in improved staffing, training, equipment or facilities could be construed as violating the foreign investor’s right to freely transfer funds back to China or the FIPA’s minimum standard of treatment obligation.”


And they warn, “Future moves by the province to reverse direction toward more stable not-for-profit and public delivery of long-term care services can be challenged by Anbang’s Cedar Tree subsidiary as a form of expropriation or violation of the firm’s right to ‘fair and equitable treatment’ under FIPA. Again, the validity of such a claim and the amount of any compensation due will be determined not in Canadian courts, but by a private investment tribunal.”


The Council of Canadians stands with allies like the British Columbia-based Hospital Employees’ Union (HEU) that opposes the sale of the retirement homes to Anbang Insurance.


There is still some hope that this can be stopped. As Sinclair and Trew note, “The deal may yet fall through [given] various B.C. regional health authorities have still to decide whether operating licences should be granted to the new owners.”

We call on those regional health authorities to refuse to grant those licences despite the Trudeau government’s approval of the sale.


To read Trade Deal Ups Risks in Chinese Firm’s Takeover of Seniors’ Care Giant by Sinclair and Trew, please click here.