Under the terms of a trade agreement signed by the Harper government, Canada could be held liable for any losses Chinese companies incur during the COVID-19 crisis.

Canada’s former Conservative Prime Minister signed the secretive deal, known as FIPA, with China in 2012. Experts, labour advocates, and human rights groups warned against the agreement. Yet, the Harper government ratified FIPA two years later in 2014.

One of the provisions in the agreement could spell trouble for Canada. Article 11 holds that if Chinese corporations incur losses as a result of “war, state of national emergency, insurrection, or other similar events,” the Canadian government can be sued for compensation.

Mukesh Khanal of the University of Calgary’s The School of Public Policy highlights the “state of national emergency” definition. Canada’s COVID-19 response could very well trigger that condition. While the federal government has not declared a state of emergency, all of Canada’s provinces and territories have.

Chinese corporations can use Article 11 to sue the Canadian government – in court or via secretive tribunals. However, Canadian corporations do not enjoy the same level of privileges.

Conservative leadership candidate, Erin O’Toole, who was the Parliamentary Secretary to the Minister of International Trade at the time, defended the deal ardently. O’Toole championed the deal for securing protections and certainty for Canadian businesses.

The Harper government’s decision to sign and ratify the deal means that Canada will be locked into the conditions of the agreement until 2045.