A decade ago, the U.S. government’s National Intelligence Council declared in a futuristic report that the next phase of globalization would have an Asian face.
In Canada, the twin trends of Asianization and globalization are meeting with a backlash.
We want your money but we’re not interested in getting to know you because we don’t really like or trust you: that was the repeat message Canadians told Asia in the recent second annual survey conducted by the Asia Pacific Foundation of Canada (APFC) on attitudes toward the region.
Instead of relishing their country’s 140-percent increase in exports to Asia over the past decade, with prospects for further gains, Canadians who responded to the survey—titled “Canadian Views on Asia”, with the results released this past May—focused on the region’s negatives, including the perceived threats from China, their country’s second-largest and fastest-growing export market, and the lack of shared cultural values with Asian societies.
(Canada’s exports to Asia rose from $20.7 billion in 2003 to $51.2 billion last year, making it the most important major growth market for Canadian products.)
The negative sentiments from the APFC survey of almost 3,500 individuals are sending a paradoxical and awkward message: that Canada wants little to do with Asia at the same time that it needs Asian capital and markets to reduce the country’s dependence on a slow-growing and heavily indebted U.S. and Europe.
The souring sentiments present a dilemma for Canada’s ambivalent political leadership as it weighs the feelings of the country’s largely white voters against the warnings of business leaders that it risks being left behind by Asia’s fast-growing economies of four billion people.
British Columbia has a much higher stake in this Asianization debate than the rest of Canada, given the province’s growing ties with the region. Premier Christy Clark’s ambitious agenda to launch a $1-trillion economy relies heavily on an Asia-dependent liquefied natural gas (LNG) industry that doesn’t yet exist in Canada.
Despite the numerous political, environmental, and financial hurdles, the industry has made a promising start, with 15 proposals in the past three years to build multibillion-dollar projects in B.C. to export the fuel to Asia.
Singapore’s Pacific Oil & Gas and Malaysia’s state-owned Petronas are firmly in the lead to make final investment decisions to develop their projects. Petronas’s all-Asian consortium is planning to invest a massive C$36 billion, while Pacific Oil & Gas’s Woodfibre subsidiary would spend $1.7 billion on its Squamish plant.
Clark’s LNG agenda locks B.C. onto a path of accelerated ties with Asia that started cautiously under the previous regime of Gordon Campbell.
But are B.C., and Canada, ready for more?
Canada’s export trends suggest some degree of globalization and Asianization has already been under way, according to the APFC. The U.S. share of Canada’s export earnings has fallen from around 87 percent in 2002 to 75.6 percent in 2012, while Asia’s share has more than doubled, from 5.6 percent to a record 11.6 percent over the same period. After registering annual growth of more than eight percent over the past 30 years, China’s economy could soon become the world’s largest as the U.S. slips into second spot under the weight of its enormous war expenses, record debt levels, and the legacy of the 2008 financial meltdown.
The dual trends of a rising Asia and a stagnating West have driven Canadian policymakers and businesses to call for faster economic and export diversification.
B.C. has taken the message to heart: more than 44 percent of its $14.9 billion in exports went to Asia last year, up from 24 percent in 2000.
Alberta, too, has a growing stake, as it needs to diversify its oil exports away from an increasingly energy-independent U.S. Two of the most high-profile companies in Calgary today are subsidiaries of state-owned China National Offshore Oil Corp. and Petronas.
Across B.C. and Alberta, there has been a visible increase in the presence of Chinese, Korean, and Filipino businesses, workers, and tourists. Asia’s economic influence has expanded to boost the prospects of Saskatchewan, Manitoba, and the Northwest Territories.
Given these impacts, the rationale for Canada’s increased engagement with the region makes sense, but there appears to be some disconnect between the elite and the rest of the country. Government and industry policy papers on Canada’s commitment with Asia are focused on big-picture issues pertaining to trade, investment, economics, security, and geopolitics.
At the people level, however, little attention has been paid to race relations. The speed and size of Asia’s growing presence are unsettling many Canadians, particularly in parts of Metro Vancouver. B.C. has a history of anti-Asian discrimination that it is just coming to terms with.
Its mainstream media, which has little Asian representation, has taken the lead in blaming Chinese buying for the rise in real-estate prices while ignoring the combined roles played by sustained low interest rates, pension funds, domestic investors, and real-estate investment trusts.
Vancouver’s emergence as North America’s most Asian city may be great for business but it is also viewed with mixed feelings by some long-time residents. According to a 2012 study by Daniel Hiebert, a UBC geography professor, whites are going from being more than 58 percent of the Metro Vancouver population in 2006 to likely a 41-percent minority by 2031, with Asians expected to become the new majority.
As the country’s fastest-growing visible-minority group, Asians today represent about 13 percent of Canada’s population.
Long-time residents can probably identify with my two Caucasian family friends Dan and Barbara Cohen, who have experienced Richmond’s rapid transformation from a quiet farming community to a bustling, largely Chinese-populated city during the past 15 years.
Although the influx of energy and capital has brightened Richmond’s economic outlook, it has also led to complaints that the city’s migrant Chinese population is not doing enough to integrate, thereby alienating residents of other races.
Dan, a kindly grandfather in his early 80s who welcomes Richmond’s growth and diversity, wishes the Chinese would promote the use of English in the city; Barbara is annoyed that new residents in her condominium complex do not return her greetings or fail to understand fire-safety warnings.
These personal experiences may seem small in the context of global trade, LNG, and geopolitics, but they matter if Canada is to develop its Asia potential.
Another source of concern is the mostly negative news from Asia: territorial disputes between China and its neighbours, environmental degradation, human-rights abuses, honour killings, and rampant corruption. From the perspectives of many Canadians, what can Asia and Asians offer other than money?
Although policymakers and business leaders believe that an increase in what the APFC calls domestic “Asia competence” will help raise the level of knowledge about and interaction with the region, a majority of Canadians surveyed told the foundation that they are not interested. Its polling found that most people preferred to deal with countries that offer “political comfort and familiarity”.
Reflecting their comfort zone, 26 percent of respondents viewed Australia as “very important” to Canadian prosperity even though it is not a top-10 trading partner. Only 13 percent recognized South Korea as important despite its being Canada’s seventh-largest trading partner, while only 35 percent rated China as “highly important”.
“A majority of Canadians prefer to strengthen economic ties with traditional western allies,” the APFC said in the May survey release. “They tend to be more willing to engage with trading partners such as Australia and the UK, which are widely regarded as friendly and democratic. There is less enthusiasm for engaging with emerging powers.”
Yuen Pau Woo, who recently stepped down as the APFC’s CEO, is neither surprised nor discouraged by the challenge of convincing Canada that it has a future with Asia even as it holds onto its Atlantic roots.
He said he thinks Canada will lose if it fails to participate in Asia’s economic growth and general development. Woo, a former Malaysian who came to Canada in 1979 as a 16-year-old student, firmly advocates standing for Canadian values and human rights in dealings with Asia, particularly when doing business in China.
In an interview in his downtown Vancouver office shortly before he stepped down, Woo said that although Canada cannot hope to fully understand Asia’s complexity, it would be foolish to ignore the region. He noted that Australia and various western countries such as the U.K., Germany, and France that many Canadians would choose to deal with are themselves actively developing and implementing strategies to engage Asia.
Woo, who left in August after completing his office’s maximum nine-year term, partly blames Canadians’ negative or indifferent attitude on Prime Minister Stephen Harper’s inconsistent handling of Asia ties. After a brief burst of interest, Woo said, Harper appears to have largely delegated the task of building Asian relations to his trade minister.
Under Woo, who became one of Canada’s most visible public figures of Asian descent, the APFC has raised awareness of Asia’s importance among Canada’s policymakers and business leaders.
“Our role is to help organizations and companies develop their Asia competence in Canada,” he said. “We raise awareness, encourage discussion across the country, get companies to think of issues and to come up with their own Asia strategies and to recognize that you cannot accomplish these goals and objectives unless you have the people, the languages, and the skills set to implement them.”
Critics have torn into Clark’s LNG agenda since she rode it with her provincial Liberals to win big in the 2013 election. They have accused her of exaggerating the projected economic windfall and the green credentials of LNG production while downplaying the concerns of First Nations groups, farmers, and environmentalists. They suspect her government is planning to help open the floodgates to imported labour at the expense of Canadian workers.
The anticipated LNG boom and rising Asian investments in B.C. are having the unintended impact of empowering B.C.’s First Nations in dealing with both the oil and gas industry and governments. With potentially hundreds of billions of dollars in investments at stake, the ability of B.C.’s First Nations to grant or withhold “social licence” has put them in a position of unprecedented power. This was not diminished in any way by the Supreme Court of Canada’s so-called Tsilhqot’in decision last July, which affirmed aboriginal title to traditional territories.
First Nations groups have accused the industry and government of not respecting their concerns about environmental-safety issues in relation to oil and gas exploitation as well as the construction of both pipelines across their land and LNG terminals near fishing grounds. Aboriginal groups and environmentalists also oppose hydraulic fracturing, or fracking, which involves injecting water and toxic chemicals deep into the ground to produce otherwise inaccessible oil and gas.
Garry Reece (former chief councillor of the Lax Kw’alaams band), Derek Orr (chief of the McLeod Lake band), and Sharleen Gale (chief of the Fort Nelson First Nation) were among the most vocal industry critics who spoke at the B.C. LNG conference in Vancouver from May 21 to 23 this year.
In separate interviews at the Vancouver Convention Centre, both Reece and Orr said they would withhold support for fracking and pipeline projects because they are not satisfied with the industry’s assurances it will protect the environment.
Premier Clark has appointed Wade Grant, a Vancouver-based Musqueam leader, as her government’s special adviser on First Nations issues. The 36-year-old UBC political-science graduate—who has worked on indigenous economic projects and represented First Nations interests on public entities such as the Vancouver police and B.C. aboriginal tourism boards—is focusing on building consensus among numerous bands to help advance the LNG agenda.
However, the industry’s huge appetite for skilled labour poses another political challenge, with the B.C. Natural Gas Workforce Strategy Committee projecting demand for more than 100,000 new skilled workers to build and operate liquefaction plants.
Clark has sought to calm the industry’s fears that it might be hit with the Australian experience of severe labour shortages and spiralling wage costs. At the same time, she has also promised that Canadians will have priority for LNG jobs.
The reality, though, is that the industry will have to import workers, given Canada’s small population relative to the present and anticipated size of its booming oil and gas industry, along with its inexperience with LNG.
However, imported labour has become a hot political issue following the recent controversies surrounding the federal Temporary Foreign Worker (TFW) program.
The Vancouver-based Centre for Immigration Policy Reform (CIPR) is not convinced that Canada has a serious labour-shortage problem and believes that employers are importing foreign workers to keep wages down. CIPR spokesperson Martin Collacott—a former Canadian ambassador who has served in Asia and the Middle East—wrote in the National Post last April of TFW employers: “The fact is…they can’t find local people to do the work at the wages being offered.” (Emphasis added by Collacott.)
Collacott is also a known critic of what he calls “ethnic enclaves” that arise when large groups of immigrants band together on arrival in Canada and do not want or are unable to integrate.
On the external front, B.C.’s LNG prospects may have been dampened by Russia’s May 21 announcement that it will sell US$400 billion worth of natural gas to China. But the deal between Russia’s Gazprom and the China National Petroleum Corporation remains fraught with uncertainty, as the sales and purchase terms could still be altered at a later stage.
A decade ago, Canadians would have regarded this deal as a quaint piece of foreign news. But as Canada increasingly confronts globalization and Asianization, B.C.’s LNG ambitions have made such deals in faraway locations a matter of make-or-break for its own economic future.