Canada's Prime Minister Stephen Harper
Canada's Prime Minister Stephen Harper speaks during Question Period in the House of Commons on Parliament Hill in Ottawa June 12, 2014. REUTERS

Canada has finally ratified the controversial foreign-investor protection agreement with China. According to a report in the Globe and Mail, the step is seen as an effort to repair the strained relations between the two. Prime Minister Stephen Harper is expected to visit China in November.

From Oct 1

On Friday, the International Trade Minister Ed Fast formally announced that the treaty named FIPA, signed two years ago, had been ratified and would come into force from October 1. The treaty assures fair treatment to Chinese investors under Canadian laws and offers the benefit of predictable rules in investment and compensation for government actions, in case the investment goes awry. The deal also seeks to reciprocate similar treatment for Canadian companies in China.

China is Canada's second largest trading partner. The Trade minister hoped that the FIPA will offer the necessary protection for Canadian companies to grow and succeed abroad. According to Wenran Jiang, a senior fellow at the Asia Pacific Foundation of Canada and a special adviser to the Alberta government, Canada wanted something from China prior to the Prime Minister's visit. Ratifying this treaty meant kicking the ball to the Chinese court and getting reciprocated.

Jiang described the bilateral relationship between Canada and China as "very chilly", and noted that Ottawa has been publicly slamming Beijing for the hacking of Canadian government computers. China retaliated by detaining a Canadian couple in China on charges of stealing military and defence secrets.

Harper Visit

Prime Minister Stephen Harper is expected to visit Beijing in November for the Asia-Pacific Economic Co-operation (APEC) summit. Jiang said Harper's visit is more than attending the APEC forum.

The FIPA treaty signed in 2012 was hampered by mistrust and controversies on handling state-owned Chinese firms who may be investing in Canada. Opinion was also divided within the Harper government on how to handle Beijing under the treaty.

Canada reiterated that it is committed to opening new markets around the world for Canadian companies, including the Asia-Pacific region. It hoped that FIPA will create jobs and economic opportunities in every region of the country.

Meanwhile, negotiations are on to secure the release of the Canadian couple, before or after Harper's visit. Canada's decision to ratify the treaty is considered a clear signal that it really means business.