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Did the Canada-China FIPA influence Trudeau’s decision to buy the Kinder Morgan pipeline?

Is it possible that the Canada-China Foreign Investment Protection and Promotion Agreement (FIPA) was a factor influencing Prime Minister Justin Trudeau’s decision to buy the Kinder Morgan pipeline?

The answer is likely yes.

1- The Trudeau government is encouraging Chinese investments in the tar sands

In June 2017, the Canadian Press reported on Natural Resources minister Jim Carr’s visit to China. It noted, “Carr’s message? Canada welcomes Chinese investment, including in the oilsands, he told a conference call from Beijing — a departure from the previous Conservative policy of keeping state-owned-enterprises out of Canada’s energy sector.” At that time, Oil Sands Magazine reported, “Carr spent the week in China trying to sell investors on Alberta’s energy sector. Carr says the government ‘would welcome investment from any nation that’s interested in the oil sands’.”

2- The Kinder Morgan pipeline would facilitate tar sands crude oil exports to China

By October 2017, the Canadian Press reported, “Getting more oil to the West Coast so it can be loaded on tankers and sold to China will be better for the country and getting it there on pipelines rather than rail cars is better for everyone, [Carr] says.” And The Globe and Mail has reported that Sushant Gupta, the director of Asia Pacific refining at energy consultancy Wood Mackenzie, “expects the expansion of the Trans Mountain pipeline from Alberta to British Columbia will direct 500,000 barrels a day of Canadian crude to Asia, primarily China, some time after 2020.”

3- Kinder Morgan being derailed would infringe on Chinese investments and could mean a FIPA challenge

Professor Gus Van Harten has highlighted, “On a close study of the FIPA’s terms, a key purpose of the deal was to open Canadian resources to China and to preserve the value of Chinese assets in Canada. The deal gives Chinese companies powerful rights to frustrate even modest steps that reduce the value of their oil sands holdings. That is, if governments in Canada put new limits on the oil sands, they face major liabilities under the FIPA’s system of foreign investor protection. Worse, Canadians cannot know reliably how the FIPA is being used – and whether it is affecting government decisions – because the agreement makes special allowances for confidential settlements with Chinese investors.”

4- Trudeau wants a free trade agreement with China and the Chinese government has made a pipeline a condition of those talks proceeding

In September 2016, Prime Minister Justin Trudeau and Chinese Premier Li Keqiang announced that there would be exploratory talks toward a Canada-China Free Trade Agreement. Three rounds of exploratory talks took place that concluded in July 2017. It is believed that the Trudeau cabinet approved proceeding to formal talks with China late last year, but that progress has been slow since then. The Globe and Mail has reported, “A senior Chinese official said [free trade agreement talks] will require Canadian concessions on investment restrictions and a commitment to build an energy pipeline to the coast.”

Also examining this link, Bruce Livesey comments in The Guardian, “Now [Trudeau] has bought that pipeline, and will have to live with the political fallout, which will likely include protesters, court cases and other acts of civil disobedience. In what might be a strategy to avoid lawsuits from Chinese companies that may result in massive secret payouts, Trudeau’s government may find itself arresting Canadians.”