The Ties Between Beijing and Canada’s Elite and Powerful

January 4, 2021 Updated: January 26, 2021

Commentary

The following is a revised version of a previous column.

For decades, high-level Canadian leaders, well-connected elites, and powerful corporations have pushed for closer ties between Canada and China.

These closer links have benefited a narrow group of individuals and corporations, while the average Canadian has borne the brunt of the adverse consequences, such as weakened national security and job loss.

The Chinese regime has an ambition to become the world’s number one global power, scholars Clive Hamilton and Mareike Ohlberg write in their 2020 book “Hidden Hand.” Its implementation strategy, they say, is to “target elites in the West so that they either welcome China’s dominance or accede to its inevitability, rendering resistance futile.”

Canada is one of the countries Beijing has targeted for elite capture for decades. We’re seeing the results of this now, as Ottawa continues to dally in responding to Beijing’s hostilities as the regime holds Canadians Michael Kovrig and Michael Spavor hostage, blocks Canadian imports, persecutes Chinese people, and creates instability on the world stage.

Setting a Course

In 1970, the government of Prime Minister Pierre Trudeau became one of the first Western governments to establish diplomatic relations with the Chinese Communist Party (CCP) as the ruler of China. Canada’s recognition of the regime paved the way for other Western countries to follow suit and for the CCP to join international bodies such as the United Nations.

Epoch Times Photo
Prime Minister Pierre Trudeau shakes hands with CCP Chairman Mao Zedong in Beijing on Oct.13, 1973. (CP Photo)

Establishing relations with communist China and bringing it into the United Nations was one of Trudeau’s primary foreign policy objectives after he became prime minister in 1968.

While on a visit to Moscow to attend a propaganda conference in 1952, long before becoming prime minister, Trudeau, then a political activist from Quebec, reportedly told the wife of the U.S. chargé d’affaires that he was a communist and a Catholic and had come to Moscow to criticize the United States and praise the Soviet Union, according to the 2013 book “The Truth About Trudeau” by Bob Plamondon.

Referring to the episode, columnist and author Mark Milke wrote in Maclean’s that Trudeau “may not have actually been a communist in 1952 but his remarks revealed an inclination even then to skip over the brutality of communist countries.”

Trudeau had travelled to China in 1949 as a young man, and again in 1960 on a trip sponsored by the regime. He chronicled the latter trip with co-author Jacques Hébert in their book, “Two Innocents in Red China.”

During their visit, the two witnessed scenes of one of the darkest periods of the communist regime, the Great Leap Forward, as noted in an article in The Globe and Mail. During this period, lasting from 1958 to 1962, Chairman Mao Zedong wanted to quickly bring industrialization to China and forced farmers to produce steel rather than crops, with those deemed not complying facing torture and even death. The Great Leap Forward led to a devastating famine that killed tens of millions of people.

In their book, however, Trudeau and Hébert write, “We are convinced that we are witnessing the beginning of an industrial revolution.”

During his official visit to China as prime minister in 1973, where he met with Mao and Premier Zhou Enlai, Trudeau praised the regime for its governance, saying the system it had developed “in comparison with all previous Chinese social systems, is striving to provide human dignity and equality of opportunity for the Chinese people.”

Trudeau’s comment came at a time when Mao was in the middle of his disastrous and bloody Cultural Revolution, which resulted in an estimated death toll ranging from hundreds of thousands to 20 million, with millions of Chinese suffering from torture and humiliation, seizure of property, and the destruction of the economy and traditional culture.

At Beijing’s insistence, Trudeau refused to issue permits to allow Taiwan to take part in the 1976 Olympic Games in Montreal, even though the team was recognized by the International Olympic Committee (IOC). To refuse entry to a country recognized by the IOC was unprecedented and met with strong objections by the United States.

Trudeau’s admiration for the CCP had long-term implications and set in motion decades of China-appeasing policies.

In 2013, when his son Justin Trudeau, then the leader of the Liberal Party and seeking to become the next prime minister, was asked which country he admired most, he said: “There’s a level of admiration I actually have for China. Their basic dictatorship is actually allowing them to turn their economy around on a dime.”

Corporate Ties

Behind some of the most aggressive lobbying efforts for stronger Canada-China ties is a handful of big corporations with extensive business operations in China.

The Montreal-based Power Corporation, a multibillion-dollar financial services company, has been described as “the premier gatekeeper of [Canada’s] formal relations with China” by author Jonathan Manthorpe in his 2019 book, “Claws of the Panda.”

In 1968, the company came under the control of Paul Desmarais Sr. and was run by his sons Paul Jr. and André, who served as co-CEOs until 2019, when they announced they were stepping down from their roles as CEOs but staying on as chairman and deputy chairman respectively.

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Paul Desmarais Sr, chairman of the executive committee of Power Corporation, walks to the company’s annual meeting in Montreal on May 9, 2008. (The Canadian Press/Graham Hughes)

Some of Canada’s most influential people have links to Power Corp., including four former prime ministers.

Former prime minister Jean Chrétien’s daughter is married to André Desmarais. Chrétien, Pierre Trudeau, and former prime minister Brian Mulroney all served as advisory board members of Power Corp. after leaving office. Former prime minister Paul Martin was president of one of the company’s subsidiaries, Canada Steamship Lines, and later bought it with a partner in the 1980s.

In 2019, Chrétien said Canada’s justice minister should use his authority to stop the extradition of Huawei executive Meng Wanzhou, who was arrested in Vancouver in December 2018 on a U.S. extradition request. Mulroney advised that Chrétien and André Desmarais be sent to China on behalf of Canada to negotiate the release of Kovrig and Spavor, who were arrested by Beijing in retaliation for Meng’s arrest. In a reversal of position, Mulroney said in June 2020 that he regrets making the suggestion, telling the Globe that Canada should rethink its relations with China.

Several other prominent Canadian politicians, including former cabinet ministers, have also worked for Power Corp.

Another influential executive at the company was Maurice Strong, who later worked as the under-secretary-general of the United Nations. Strong is the nephew of prominent pro-communist reporter Anna Louise Strong. According to the Epoch Times series “How the Spectre of Communism Is Ruling Our World,” Maurice Strong was deeply influenced by his aunt and described himself as “a socialist in ideology and a capitalist in methodology.”

After retirement, Strong moved to Beijing, where he lived for the rest of his life. In a 2010 interview with the Guardian, he said he still maintained some co-operation with the United Nations “in particular to China and that region.”

Power Corp. is a founding member of the Canada China Business Council (CCBC), which was spearheaded by Paul Desmarais Sr. The business mogul once remarked that Mao was one of the four historical figures he respected most.

Canada China Business Council

The CCBC advocates for strong relations with China and has counted among its ranks former politicians or individuals who went on to become politicians.

Paul Desmarais Sr. was the founding chair of CCBC. His son André is an honorary chair of the organization, and the current chair is André’s son, Olivier.

CCBC, formerly called the Canada China Trade Council, was founded in 1978. It lists eight major Canadian corporations and the Chinese state-owned company CITIC as founding members.

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André Desmarais and Paul Desmarais Jr., then-co-CEOs of Power Corporation who have since retired, before the start of their company’s annual meeting in Toronto on May 14, 2019. (The Canadian Press/Chris Young)

Half of the Canadian founding members—namely Power Corp., BMO Financial Group, Bombardier, and SNC-Lavalin—are based in Montreal. The others are Barrick Gold Corp., Export Development Canada, Manulife Financial, and Sun Life Financial, the latter based in Montreal until 1978.

The book “Claws of the Panda” says the founding CCBC members “became a persuasive lobby for enhanced relations with China, for which the benefits of trade were held to be of paramount concern.”

The Canada-China business community has strong links with a once-powerful Chinese official, Bo Xilai.

Bo was a rising star of the CCP until he was removed from his post as Party chief of the megacity of Chongqing after a scandal involving Chongqing official Wang Lijun. Wang gave the American Consulate in Chengdu accounts of the involvement of Bo and Bo’s wife, Gu Kailai, in the murder of a British businessman.

Bo was part of a faction loyal to former Chinese leader Jiang Zemin, a rival of current leader Xi Jinping. According to some accounts, Bo and some other officials in Jiang’s faction had been plotting to overthrow Xi, and this was one of the main reasons Bo was removed from power.

Both Bo and wife Gu were heavily involved in—and profiting from—the state-sanctioned harvesting of organs from Falun Dafa prisoners of conscience.

Chrétien once called Bo an “old friend,” and Sergio Marchi, who is a former Liberal trade minister and a past CCBC president, called Bo “one of our key bridges,” according to The Globe and Mail.

The relationship between Bo and Canada’s business community is rooted in the close ties he had with the Desmarais family.

The Globe reported last year that Bo’s son, Bo Guagua, works for Power Corp. But the ties go all the way back to the time of Paul Desmarais Sr. and Bo Xilai’s father. According to the Globe, Bo’s father, Bo Yibo, at that time vice premier of the CCP, visited Paul Desmarais Sr. in the 1970s while en route to Washington to lay the groundwork for U.S. President Richard Nixon’s trip to China.

Shortly after Bo became China’s commerce minister in 2004, Power Corp. was one of the first foreign companies receiving designation to buy and sell yuan-denominated shares on Chinese stock exchanges, the Globe notes.

CITIC-Power Corp. Ties

CITIC Group Corporation—the CCBC’s only China-based founding member—is one of the Chinese entities with which Power Corp. has deep ties. The company is a state-owned investment company established to bring in foreign investment to China.

It was founded with the personal approval of Deng Xiaoping, the paramount leader of the Chinese regime after Mao’s death. Its founder, Rong Yiren, later a vice president of the People’s Republic of China, was known as “the red capitalist.”

CITIC has a reputation for having links to the Chinese military and China’s espionage apparatus.

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Two men chat next to the offices of CITIC Pacific in Hong Kong on April 8, 2009. (Philippe Lopez/AFP via Getty Images)

Wang Jun, who was at one time the chairman of CITIC, was also at the same time in charge of Poly Group, a Chinese state-owned enterprise formed as a manufacturing arm of the People’s Liberation Army. Wang was at the centre of a donation scandal in the United States in the 1990s, when Arkansas restaurateur and Democratic Party donor Yah Lin “Charlie” Trie used his influence to secure a meeting between Wang and then-president Bill Clinton in 1996. At the time of the meeting, Wang’s Poly company was under investigation for illegal arms trading in the United States. Representatives of the company were charged with arms smuggling into the United States a few months after the meeting.

Clinton later said he shouldn’t have met with Wang, and the US$640,000 amount donated by Trie to the Democratic National Convention, as well as $460,000 raised for Clinton’s legal defence, were returned amid questions about the source of the funds and allegations of China’s role in the affair.

A leaked 1997 joint report by the RCMP and the Canadian Security Intelligence Service (CSIS) accused CITIC of the same influence-peddling tactics in Canada.

“CITIC has repeated the gesture [as it did in the United States] by contributing through its Canadian subsidiaries to Canadian political parties,” the report said.

The 2019 book “Chinese Spies,” by veteran French journalist Roger Faligot, says the leadership of CITIC “is known to harbour within its ranks a large number of Chinese secret agents.”

According to “Hidden Hand,” Paul Desmarais Sr. was the main force behind bringing CITIC into the CCBC, “and thus into the most senior levels of Canada’s business elite.”

André Desmarais was a board member of CITIC Pacific, a subsidiary of CITIC, from 1997 to 2014. During this period, Power Corp. bought stakes in CITIC Pacific.

Power Corp. also has 13.9 percent ownership in China Asset Management, an affiliate of CITIC. Mackenzie Financial Corporation, an indirect subsidiary of Power Corp., has a 13.9 percent stake in China Asset Management as well.

CITIC has included many CCP “princelings”—children of Party leaders—in its leadership ranks, including Wang Jun, the son of one of the CCP’s eight elders, and Bo Xicheng, the brother of Bo Xilai and son of Bo Yibo, one of the Party’s most senior political figures.

Paul Desmarais Sr. and André first met Rong during a business mission to China at the invitation of Prime Minister Pierre Trudeau, according to La Presse. Before Power Corp. bought a stake in CITIC, the Desmarais-Rong relationship had resulted in another joint venture in 1986: an investment in a pulp mill in British Columbia.

‘Expanding the Relationship’

Former prime minister Mulroney, who has provided professional services to Power Corp. on different occasions, also sat on the board of CITIC after leaving office. According to a Globe article, Paul Desmarais Sr. was one of Mulroney’s two main mentors as a young man. Power Corp. regularly used Mulroney as a labour lawyer.

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Former prime mininster Brian Mulroney (L) greets Paul Desmarais Jr., then chairman and co-chief executive officer of Power Corporation of Canada, during an event in Mulroney’s honour in Montreal on May 9, 2019. (The Canadian press/Graham Hughes)

According to the 2014 book “Engaging China,” after a 1986 official visit to China as prime minister, Mulroney wrote, “Much remains to be done in expanding the relationship, but persistent work by successive Canadian prime ministers, principally Pierre Trudeau, is clearly paying off.”

Following the 1989 Tiananmen Square massacre, when much of the Western world shunned diplomatic ties with Beijing, Mulroney told Zhu Rongji, China’s vice premier at the time, that Canada “would be prepared to fully engage with China in the years ahead” but would need to be cautious because of Canadians’ concerns about human rights.

Mulroney played a key role in forging a partnership between Desmarais and entrepreneur Peter Munk to invest in gold deposits in China in 1994, a year after the end of his prime ministership. During a trip to China, Munk was impressed that Mulroney was able to arrange a dinner with Zhu Rongji, then head of China’s central bank, without whom they wouldn’t be able to get access to China’s gold deposits.

“This is a good example of how Brian [Mulroney] uses his connections and contacts and turns them into international business opportunities for the companies he’s involved with,” Munk told the Globe.

Pro-Beijing Turn

Under the leadership of Chrétien, Canada became much more pro-Beijing.

Chrétien once told the Chinese state-owned news network CGTN that he visited China “many, many” times when he was prime minister.

“For the 10 years as the prime minister, I met the president of China 17 times, so I was close to China,” Chrétien said.

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Prime Minister Jean Chrétien meets with Chinese leader Jiang Zemin before their bilateral talks in Shanghai on Oct. 20, 2001. (AP Photo/Andrew Wong, Pool)

The Chinese leader during Chrétien’s tenure was Jiang Zemin, who came to power following the Tiananmen Square massacre, as the previous leader, Zhao Ziyang, was deemed too sympathetic to the protest movement. Jiang went on to launch a brutal campaign of persecution against the traditional meditation discipline Falun Dafa in 1999.

After the 1989 Tiananmen Square massacre, Chrétien was one of the first world leaders to bring China out of isolation, rebooting relations with Beijing after the West had shunned the regime for its killing of unarmed protesters.

Chrétien made a trade visit to China in 1994, bringing along premiers, foreign affairs officials, and some 400 business executives. The delegation signed $9 billion in trade deals while in China.

Ahead of the trip, Chrétien and other officials said they would be using the visit to discuss the issue of human rights. But that issue was put aside, a Maclean’s article noted.

“We do not practise megaphone diplomacy, but we do not practise doormat diplomacy either,” a senior Foreign Affairs Department official told Maclean’s at the time.

The article said the closest Chrétien came to discussing the issue was in a meeting with Chinese premier Li Peng.

“Chretien raised the issue so briefly that a Chinese foreign affairs ministry official later insisted it had not come up at all, and Nova Scotia Premier John Savage, who was at the meeting, did not initially recall any mention of the subject,” the article said.

The approach of sidelining human rights in favour of business interests has been far too common a theme among many political leaders.

During a trip to China in 2014, then-Liberal Quebec premier Philippe Couillard said he would not be bringing up the issue of human rights, saying, “you have to listen to the point of view of your hosts on these questions.”

After leading another delegation to China in 2018, during which he signed 40 agreements worth $262 million, Couillard said he didn’t want to “defeat” the purpose of the mission with “misguided comments.” He said others shouldn’t “dictate to China how they govern themselves internally.”

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Then-Quebec Premier Philippe Couillard attends a signing ceremony between Canadian companies and their Chinese counterparts in Beijing on Oct. 29, 2014. (AP Photo/Ng Han Guan)

Former Progressive Conservative deputy prime minister Jean Charest, who was premier of Quebec from 2003 to 2012, criticized the Harper government in 2014 for not pursuing trade ties more aggressively with China.

Charest is now providing consulting services to Huawei to help the company in Meng’s extradition case and in its bid to be involved in Canada’s 5G network. The former premier, as well as Eddie Goldenberg, former senior political adviser to Chrétien, were among several Canadian politicians whose names were in a dossier of key Canadian influencers Beijing provided to Huawei to advance its interests in Canada, according to the Globe, which obtained a copy of the dossier.

During Chrétien’s tenure, Canada withdrew its support for a U.N. resolution censuring China for human rights abuses in 1997. Instead, any talk of human rights was reserved for private meetings, where Chinese representatives simply brushed off the issue.

The year 1997 was also a key year for Power Corp.’s foray into CITIC, as that was when it acquired a significant stake in the company’s subsidiary CITIC Pacific and when André Desmarais became a board member of the subsidiary.

Chrétien also supported China’s admission to the World Trade Organization, which was instrumental in enriching the regime’s coffers.

Martin, who succeeded Chrétien as prime minister, maintained his predecessor’s China policy. During a 2005 trip by Chinese leader Hu Jintao to Canada, Martin and Hu agreed to build a “strategic partnership” between the two countries.

Some of the biggest orders for Martin’s shipbuilding business before he became prime minister came from China. According to an article published in The Walrus, in 1995 his Canada Steamship Lines company commissioned three new self-unloader vessels from the Chinese state-owned Jiangnan shipyards.

Resuming Close Ties

When Stephen Harper became prime minister in 2006, there was a considerable change in Canada’s China policy, with Harper more vocally calling out Beijing’s human rights violations. He also refused to go to the 2008 Beijing Olympics, which angered the CCP.

However, in the later years of his tenure, his government began to ease its tone on China.

Manthorpe writes in “Claws of the Panda” that behind this warming up in tone was “a major lobby operation mounted using the CCP’s agents of influence in business and academia to get the Harper government to change its attitude toward China.”

After the Liberal Party won the 2015 federal election, it almost immediately began a policy of seeking closer ties with China. The government also spent money on public relations initiatives to warm Canadians toward closer Canada-China ties.

Trudeau visited China in 2016 and 2017, pursuing preliminary talks toward a free trade agreement, despite a $50 billion imbalance in trade between the two countries in China’s favour. The talks failed in 2017 due to the Chinese side not wanting to entertain Trudeau’s request to consider progressive values in the deal.

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Prime Minister Justin Trudeau is greeted by Chinese leader Xi Jinping at the G20 Leaders Summit in Hangzhou, China, on Sept. 4, 2016. (The Canadian Press/Adrian Wyld)

The same year, Canada committed hundreds of millions of dollars in investment in Beijing’s prestige-building initiative, the Asian Infrastructure Investment Bank, meant to rival other multilateral development banks such as the World Bank.

Despite a clause in the United States-Mexico-Canada Agreement (USMCA) preventing member countries from forming free trade deals with “non-market” economies—a clear reference to China—Trudeau said in 2018 that Ottawa intends to pursue deeper trade ties with the Chinese communist regime.

The Liberal government was criticized by the opposition and U.S. politicians for allowing the takeover of two security-sensitive high-tech companies by Chinese companies. One was Norsat, a Vancouver-based satellite communications firm, and the other was ITF Technologies, a Montreal-based laser technology company.

In 2016, Trudeau’s attendance at cash-for-access events became a source of controversy after it was revealed that some of the guests had ties to Beijing. One guest was Zhang Bin, an adviser to the Chinese regime. The event was held at the mansion of Benson Wong, president of the Toronto Chinese Chamber of Commerce. Attendance cost $1,500 per person. Zhang and a partner, donated $1 million to the Pierre Elliott Trudeau Foundation and the University of Montreal Faculty of Law, where Pierre Trudeau had taught.

The Liberal government has been consistently soft on China. At one point, Ottawa was even considering an extradition treaty with Beijing.

Human rights and national security concerns aside, close economic ties and inclusion of a regime that doesn’t play by the rules in global organizations may have benefited some corporations and individuals, but it hasn’t been to the benefit of Canadians.

A 2017 report by the Centre for the Study of Living Standards found that between 2001 and 2011, Canada lost 150,000–170,000 jobs due to increased Chinese imports. Another report in the same year by the Broadbent Institute said Canada has lost close to 550,000 manufacturing jobs since 2000, around the time that China was brought into the World Trade Organization—a move Chrétien was a proponent of.

Ottawa’s tone on China has seemingly become more direct of late, with Prime Minister Justin Trudeau recently calling out Beijing for its “coercive diplomacy.” But this has yet to be backed up by any concrete actions—and that’s what Canadians want, according to a poll by Ekos Research in November. The poll showed that 83 percent of respondents said Canada should stand up to China to uphold Canadian values of respect for human rights and the rule of law.

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A man holds a placard calling for China to release Canadian detainees Michael Spavor and Michael Kovrig outside a court hearing for Huawei executive Meng Wanzhou at the B.C. Supreme Court in Vancouver on March 6, 2019. (Lindsey Wasson/Reuters)

It created an uproar when internal government documents made public in early December showed that Global Affairs had pushed for the Canadian military to maintain training exercises with China’s People’s Liberation Army (PLA) in early 2019, shortly after China arrested Kovrig and Spavor. The pushback by Global Affairs occurred following a decision by the Canadian military to cancel winter training with the PLA due to security concerns raised by the United States. The move demonstrated Ottawa’s flawed thinking that the communist regime can be a trusted partner.

The Liberal government also still hasn’t ruled out using Huawei equipment in Canada’s 5G networks, despite security concerns from the intelligence community and the United States, which has warned that it would limit intelligence sharing with Canada if it allowed Huawei to participate in the country’s 5G. A poll in May 2020 by Research Co. showed that 75 percent of Canadians don’t want Huawei equipment in Canada’s 5G.

According to scholar Hamilton, untangling the Chinese regime’s influence in Canada would be a 10-year struggle, as “the influence of the CCP runs very deep in Canadian institutions.”

If our leaders want to seriously put the interests of Canadians first rather than those of a few among the elite, they should make the effort to start today—and achieve it much sooner than 10 years.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.