Canada's Foreign Investment Promotion and Protection Agreements (FIPAs)
International investment is an essential corporate strategy for many Canadian companies competing in today’s global economy. By investing abroad, companies can gain access to overseas markets, reduce input costs, secure access to key resources, acquire new technologies and provide better support to foreign customers. Inbound foreign direct investment (FDI) similarly provides access to new products and technologies improves job opportunities and strengthens Canadian economy.
Still, each country operates with its own unique political, legal and regulatory environments. Many of these can be unfamiliar for Canadian investors looking to expand globally. Similarly, Canada places special importance on the autonomy of our indigenous communities, the protection of our natural environment and our commitments to international cooperation, highlighting the need to preserve policy flexibility in certain areas.
For this reason, the Canadian government pursues a policy of negotiating Foreign Investment Promotion and Protection Agreements (FIPAs) that set out reciprocal binding obligations for signatory states in order to provide a more transparent and predictable climate for investors.
Canada's FIPA Program
A Foreign Investment Promotion and Protection Agreement (FIPA) is a bilateral agreement aimed at protecting and promoting foreign investment through legally-binding rights and obligations.
FIPAs accomplish their objectives by setting out the respective rights and obligations of the countries that are signatories to the treaty with respect to the treatment of foreign investment. Typically, there are agreed exceptions to the obligations. FIPAs seek to ensure that foreign investors will not be treated worse than similarly situated domestic investors or other foreign investors; they will not have their investments expropriated without prompt and adequate compensation; and, in any case, they will not be subject to treatment lower than the minimum standard established in customary international law. As well, in most circumstances, investors should be free to invest capital and repatriate their investments and returns.
Canada began negotiating FIPAs in 1989 to secure investment liberalisation and protection commitments on the basis of a model agreement developed under the auspices of the Organization for Economic Cooperation and Development (OECD). For a comprehensive list of Canada’s existing FIPA’s, ongoing FIPA negotiations and recently concluded FIPA negotiations please see Negotiations and Agreements.
In 2003, Canada updated its FIPA model to reflect, and incorporate the results of, its growing experience with the implementation and operation of the investment chapter of the NAFTA. The principal objectives of this exercise were to:
- Enhance clarity in the substantive obligations;
- Maximize openness and transparency in the dispute settlement process; and
- Discipline and improve efficiency in the dispute settlement procedures.
For more information on Canada's FIPA program, including an overview of the obligations contained in the FIPA and common myths, visit the information session on FIPAs.
If you wish to obtain a copy of Canada's FIPA model, please contact Foreign Affairs, Trade and Development Canada by one of the means provided below.
- Canada’s FIPA Program: Its Purpose, Objective and Content
- Information session on FIPAs
- Investment Canada Act
- Investment: Frequently Asked Questions
If you have questions, comments or wish to obtain a copy of Canada FIPA model, please contact Foreign Affairs, Trade and Development Canada:
Investment Trade Policy Division (TNI)
Foreign Affairs, Trade and Development Canada
Lester B. Pearson Building
125 Sussex Drive
Ottawa, Ontario K1A 0G2
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