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Canada's Minister of Foreign Affairs Melanie Joly speaks during a reception honouring the visit of the Chairperson of the African Union Commission Moussa Faki Mahamat in Gatineau, Quebec, Canada October 26, 2022.
Canadian foreign minister heads to China amid tough tariff talk
Canadian Foreign Affairs Minister Mélanie Joly made a surprise visit to Beijing on Thursday as Canada and the United States are both considering new barriers to trade with China.
Canada-China relations have gone from bad to terrible since 2018, when Canada held Huawei executive Meng Wanzhou for extradition to the United States and the Chinese government responded by detaining Michael Kovrig and Michael Spavor. Wanzhou and the two Michaels were released in 2021, but a Canadian public inquiry into foreign interference continued to put a strain on relations. Then came the suspected Chinese spy balloon surveillance in US and Canadian airspace in 2023.
Still, Chinese Foreign Minister Wang Yi said China was open to improving relations earlier this year.
But this week, Deputy Prime Minister Chrystia Freeland said she would be talking to Canadian business and labor groups about erecting new trade barriers with China. Washington sent a similar message as Joe Biden told allies on Wednesday that he is considering taking fresh action to block Chinese chip manufacturing. Meanwhile, in Milwaukee this week, Donald Trump’s running mate, JD Vance, said China is the “biggest threat” facing the United States.
The Chinese likely want to talk to Joly about avoiding new trade barriers with Canada, since China’s economy is struggling and any new limits on exports could further slow growth. Joly will no doubt listen politely, but Canada is unlikely to jeopardize its crucial trade relationship with the United States by making any side deals with Beijing.
A Canadian mountie waits outside the Senate before the Throne Speech in Ottawa.
Mountie charged in China probe
The Royal Canadian Mounted Police busted one of their own last week, arresting former officer William Majcher in Vancouver, where he was charged with violating the Security of Information Act — Canada’s official secrets law — by allegedly working for the Chinese government.
China hawks in both Canada and the United States have long been frustrated with Ottawa’s reluctance to respond to Chinese interference. Justin Trudeau’s government has been accused of doing too little to prevent agents of Beijing from exerting influence over, harassing, and even threatening members of the diaspora.
Court documents allege Majcher "used his knowledge and his extensive network of contacts in Canada to obtain intelligence or services to benefit the People's Republic of China," and "contributed to the Chinese government's efforts to identify and intimidate an individual outside the scope of Canadian law."
Majcher, who retired from the Mounties in 2007 after working undercover on money-laundering investigations, has been living in Hong Kong, running a corporate risk firm. In 2019, the Australian Broadcasting Corporation reported he was involved in Project Dragon, a Chinese government program aimed at recovering money illegally moved out of the country. Human rights activists say China uses white-collar crime investigations to target and intimidate critics overseas.
Unlike the US, Canada does not have a foreign agent registry, which makes it harder to investigate and prosecute those working on behalf of foreign governments. Trudeau has so far not called a public inquiry into the matter, but in the most recent federal budget, his government provided $49 million to the RCMP to “protect Canadians from harassment and intimidation” from foreign governments.Activists take part in a protest against China's treatment of the ethnic Uyghur people in Jakarta, Indonesia.
Nike Canada, Dynasty Gold face ethics probe
Canada's corporate ethics watchdog is looking into whether the local affiliate of US sportswear giant Nike and Dynasty Gold, a Canadian mining firm, benefited from using ethnic Uighur forced labor in China.
This might not sound like a big deal because the Canadian Ombudsperson for Responsible Enterprise only has investigative powers and can recommend prosecution. Dynasty Gold called the allegations “totally unfounded,” and Nike argued that the complaint has "factual inaccuracies."
Still, the probe might have two geopolitical ramifications.
First, it happens amid a rather icy phase in Canada-China ties. Beijing will not be happy with Ottawa about the investigation — although the Chinese are used to playing defense over their treatment of Uighurs, which most Western governments say are often "employed" as modern-day slaves by the ruling Communist Party.
Second, the proceedings will be closely watched in the US, where in late 2020 Nike was among a handful of big companies that lobbied against Congress passing the Uighur Forced Labor Prevention Act. The bill, signed into law in December 2021 by President Joe Biden, bans the import of goods when there is "reasonable evidence" they were produced with Uighur forced labor in China's northwestern Xinjiang region.
So far, US customs authorities have only seized some Chinese imports under the new law. But if the Canadian complaint eventually yields sufficient proof, the Biden administration might face bipartisan pressure to do more to enforce the law right when Biden wants to lower the temperature with Beijing.
Flags of China and Canada are displayed next to the logo of Asian Infrastructure Investment Bank.
Canada mulls AIIB withdrawal
While Secretary of State Anthony Blinken’s been busy trying to stabilize US-China relations, Canada has temporarily frozen its relationship with the Asian Infrastructure Investment Bank, citing possible infiltration from the Chinese Communist Party. The allegations, which China denied, came from the bank’s former global head of communications, Bob Pickard.
What is the AIIB? It’s a sometimes-rival, sometimes-partner of the Asian Development Bank with a pledged capitalization of nearly US$100 billion (a third comes from China; roughly $1 billion comes from Canada). It has over 100 members, including Canada, Australia, New Zealand, South Korea, France, Germany, and the United Kingdom. But the US — which controls the ABD along with Japan — opted not to join in 2015 under pressure from Congress and over concerns about China’s geopolitical goals. The Obama administration, seeing the AIIB as a regional rival, also tried but failed to keep its allies from joining.
Canada is investigating Pickard’s claims that the CCP infiltrated the bank – an allegation that seems obviously true and consistent with the practice of mega-world powers dominating multilateral institutions. Politically, Trudeau’s government has to react to the allegations – after all, this is playing out amid a Canadian public inquiry into alleged election interference by China.
But in a world increasingly marked by realpolitik, Ottawa also has to leave room for all sides to save face. Canada has no interest in falling too far out of step with the US-China relationship, and with Blinken’s ongoing efforts to stabilize relations with Beijing, Canada can’t alienate itself from China.
This is why, despite the freeze, Canada’s ambassador to Beijing is insisting that Canada and China are not adversaries … and why we don’t expect much to come from the AIIB investigation.David Johnston, Canada's special rapporteur on foreign interference, holds a press conference in Ottawa.
Chinese interference inquiry goes from no to maybe so
The foreign interference saga continues in Canada. Last week, former Governor General David Johnston, who helmed an investigation into alleged Chinese election meddling and recommended against a public inquiry despite opposition calls for one, resigned as special rapporteur amid torqued claims that he was too close to PM Justin Trudeau. Days earlier, the House of Commons passed a motion asking him to resign.
When Johnston resigned, the government called the opposition’s bluff on the inquiry, asking them to supply suggestions for who might lead it and how it’ll keep secret all the sensitive information involved. Not to be outdone by Liberals, the Conservatives said they would cooperate with other opposition parties to come up with some ideas.
For now, attention is focused on Chinese election interference, but past chatter has pointed to other countries of interest, including Russia and India.
In the US, meanwhile, there has been concern with Russian interference in American elections, and the country has conducted two foreign meddling probes. A 2020 Senate panel found that Russia interfered in the 2016 election. In 2022, attention turned to Chinese interference in the midterms on social media and through hacking operations. With races heating up for Biden and Trudeau in 2024 and 2025, expect more concern about foreign meddling on both sides of the border.
Printed Chinese and Canada flags.
Reckoning over Chinese meddling
At a marathon parliamentary hearing on Tuesday, David Johnston, Canada’s embattled special rapporteur on foreign interference, pushed back against claims that he failed to recommend a public inquiry into Chinese interference in domestic politics in order to cover for the Trudeau government.
What’s this all about again? In a rare display of unity, both the leftist New Democratic Party and right-wing Conservative Party have criticized Johnston, the former governor general, for refusing last month to order a public inquiry into Chinese interference. They point to evidence showing that China interfered in Canadian politics in hopes of keeping in power a minority Liberal government that might be more deferential to Beijing’s interests than the more hardline Conservatives.
One of the biggest issues leading to the fallout relates to allegations that the PM was informed in 2021 that the Chinese Communist Party was targeting tough-on-China Conservative MP Michael Chong (and his family) and that the government failed to alert him. Among other allegations was one that China gave $250,000 to a number of Canadian political candidates in 2019, which Johnston dismissed as untrue.
Johnston, for his part, says that the failure to alert Chong came down to an intelligence communication failure rather than the result of political malfeasance. But the three major opposition parties weren’t buying it and said that Johnston, who has a long association with the Trudeau family, is carrying water for the PM and his party.
For now, the NDP, whose votes in parliament Trudeau needs, say they won't pull their support, but they have lost faith in Johnston, who begins public hearings on the matter next month under a cloud.
MP Michael Chong speaks during a news conference to announce he is running for the leadership of the Conservative Party in Ottawa, Canada.
Canada and China’s choreographed tit for tat
Ottawa’s relationship with Beijing already resembled a broken vase, but on Tuesday, more pieces shattered when China expelled Canadian diplomat Jennifer Lynn Lalonde from Shanghai. The move came in response to Canada’s expulsion on Monday of Chinese diplomat Zhao Wei for his alleged role in threatening Conservative MP Michael Chong and his family.
The story of the threats to a sitting MP’s family was broken by The Globe and Mail, and it forced the Canadian government to come clean on what they knew and when, and how they were going to respond. Chong, a long-time critic of Beijing on issues like the Uyghurs and repression in places like Hong Kong, demanded that Ottawa immediately expel the Chinese diplomat.
But it took more than a week for the government to act. What took so long? Why did Canada’s Foreign Minister Melanie Joly absorb so much flak for not expelling Zhao immediately?
Turns out, this may have been a diplomatic fight that was as choreographed as a WWE wrestling match. The first clue came when Prime Minister Justin Trudeau responded to the criticism last week by noting that the decision was being taken “very, very carefully.” Translation: We’re going to backchannel with the Chinese to limit the damage.
“The time the Canadians took to make a decision and the speed of China’s response points to behind-the-scenes coordination,” says Eurasia Group Vice Chairman Gerald Butts, Trudeau’s former principal secretary. “It looks like both sides are taking a no-surprises approach for now.”
Public diplomatic fights with backroom deals to save face on both sides? This is likely how much of the West is dealing with the wolf-warrior diplomacy of China, with the US playing a strong role in all the interactions. After all, tensions between China and the US are also on the rise and could influence Canada’s diplomatic decisions.
“Canada doesn’t have a lot of options,” says Butts. “Geography still matters. The Canadians will ultimately side with the United States in a geopolitical conflict of this magnitude.”