Question Period Note: Canada-China FIPA

Canada-China Foreign Investment Protection and Promotion Agreement

• The Canada-China FIPA provides greater predictability and protection for investment activity, and allow investors to invest in each other's markets with greater confidence

• The Canada-China FIPA supports Canadian businesses' efforts to explore the growing investment opportunities in China, and provides more stability for Canadian firms with investments in that market

• To date, no claim has been filed by a Chinese investor against Canada under the FIPA.

The Canada-China FIPA entered into force on October 1, 2014.

Through the Canada-China FIPA, Canada has secured a high-standard agreement through which to grow Canada's investment presence in China. The FIPA is very similar to the other such agreements to which Canada is a party, and provides a rules-based investment regime, including dispute settlement procedures. The agreement contains comprehensive scope and coverage, and substantive obligations pertaining to national treatment (post-establishment), most-favoured-nation treatment (pre- and post-establishment), minimum standard of treatment, transparency, performance requirements, transfers and expropriation.

Under the FIPA, Chinese investment in Canada continues to be subject to the Investment Canada Act for both the net benefit test for acquisitions, and for national security reviews.

While the China FIPA was criticized by some civil society stakeholders over concerns about Chinese investors suing Canada under investor-state dispute settlement, no such claim has been filed to date.

While China is one of the world's top destinations for foreign direct investment, it remains a challenging market for foreign investors. China maintains strict controls on foreign investment into many areas of its economy.

In addition, many Canadian investors cite diverse concerns including with respect to opaque governmental decision-making, arbitrary governmental authorizations, poor intellectual property rights enforcement, and financial and other preferential treatment afforded to Chinese state-owned enterprises.

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