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Will weakened mining laws be another pre-condition for Canada-China FTA talks?

Prime Minister Justin Trudeau recently met with Chinese Foreign Minister Wang Yi on Parliament Hill. Photo by Adrian Wyld/ Canadian Press.

The China Mining Association has complained about the obstacles to mining in Canada, while the Trudeau government is seeking a free trade agreement with the Chinese government and producing an investor’s guide in Mandarin to attract the Chinese mining industry to Canada.

The CBC reports, “Some of China’s resource companies feel they have been misled by investment-seeking Canadian governments about just how difficult it is to establish successful mines in Canada, Ottawa’s ambassador to Beijing [Guy Saint-Jacques] has warned. An associated document notes those obstacles include “harsh climate, poor infrastructure, scarce workforce, foreign temporary worker limitations and regulatory requirements”. The article adds, “[Wang Jiahua, executive vice chairman at the China Mining Association] cited Canada’s immigration policies as a barrier, because they ‘make it impossible for Chinese investors to bring Chinese labour to Canada to work on mine construction, resulting in a timeframe of 8-10 years to project start, vs. 1-2 years if Chinese labour was allowed’, Saint-Jacques noted.”

CBC also notes, “David Mulroney, Canada’s former ambassador to China, says Chinese resource companies want Canada to relax its regulations. …[He] calls the complaints an example of ‘negotiation by other means’, and that the real goal is to put pressure on Canada to set aside its domestic restrictions. …[Mulroney says] ‘China would like to do in Canada what it does with investment projects in the developing world, namely to ship in its own workforce and run the project as a Chinese enclave.'”

And CBC highlights, “A spokeswoman for Natural Resources Canada says the department recently compiled an investors’ guide to mining in Canada, which is currently being translated into Mandarin. ‘The guide is promoted to investors abroad and provides a clear and comprehensive guide to the regulatory environment and investment climate in Canada, including in Canada’s North’, Cathy Koury said.”

The Globe and Mail recently reported, “The Prime Minister has made re-engagement with China a key foreign policy initiative as his government presses for a free-trade deal with the world’s second-largest economy.” This past December, China’s ambassador to Canada, Luo Zhaohui, stated, “At the policy level, we need to start the negotiation and conclusion of a free trade agreement sooner rather than later.”

It has been previously reported that the approval of a tar sands pipeline would be the pre-condition for the talks.

In January of this year, the Globe and Mail reported, “China wants to forge a historic free-trade deal with Canada, but a senior Chinese official said this will require Canadian concessions on investment restrictions [notably in the oil and gas sector] and a commitment to build an energy pipeline to the coast.” Colin Robertson, a senior fellow at the Canadian Global Affairs Institute, says, “They would like to buy our Canadian oil and gas, but they can’t get it there because they don’t have the pipeline. Basically, they want us to get pipelines, as do the Japanese and Indians, to the coast so they can get access to oil and gas.”

The pipeline that China wants could be either the Energy East, Trans Mountain or Northern Gateway pipelines, in that all have the capacity to ship crude oil to China.

If Canada signs a free trade agreement with China that includes an investment protection provision (an Investor-State Dispute Settlement or ISDS mechanism), it would make it that much harder to reject tar sands pipelines or impose new restrictions on mining in Canada (that could be deemed non-tariff barriers to trade or as unfair treatment to foreign investors).

Beijing-based China Minerals Mining Corp. has already filed a petition with the Supreme Court of British Columbia that seeks to reverse a portion of the British Columbia government’s transfer of Crown land in northern B.C. to the Kaska Dena Council. China Minerals holds mineral tenure on a portion of that land and says it was not consulted on this land transfer and that it impairs their ability to proceed with their plans. The company has invested about $36 million into developing existing mine sites into active gold mines and observers have noted the government’s decision was tantamount to an expropriation, which would also be a violation of the Canada-China Foreign Investment Promotion and Protection Agreement (FIPA).

The British Columbia First Nations Energy and Mining Council mapped out the 35 active mine tailings ponds on 48 key watersheds in the northern half of BC in June 2015. They concluded that there are risks to the drinking water of 33 First Nations and 208 other communities, including Prince George, Smithers and Terrace.

Trudeau is expected to add an official visit to China around the time of the G20 summit there this coming September 4-5.