Cabinet Unsure If Canada’s $510 Million Investment in Chinese Infrastructure Bank Created Jobs

General view of the Asian Infrastructure Investment Bank (AIIB) building in Beijing on Jan. 13, 2016. (VCG via Getty Images)

Cabinet says it’s unclear if any jobs were created after Canada made a $510 million investment in Beijing’s Asian Infrastructure Investment Bank (AIIB), documents show.

“The Government of Canada is aware of five Canadian firms having signed contracts as part of the Bank’s corporate procurement,” cabinet wrote in a report introduced in the Senate at the request of Senator Leo Housakos, according to Blacklock’s Reporter.

“As these are private contracts with private companies the Canadian government cannot estimate how many jobs have been created.”

The companies that received AIIB contracts were LEA Consulting Ltd. of Markham, Ontario; Hatch Consulting’s subsidiary in Mississauga, Ontario; Insignia Software Corp. of Edmonton, Alberta; EQ Consulting Inc. of Toronto; and a joint venture involving the Canadian subsidiary of ISW Consulting.

In 2018, Hatch provided consulting services on an AIIB-financed project in Uzbekistan. In 2019, Insignia Software Corporation provided library management system services to the institution, and in 2020, EQ Consulting Inc. was awarded two separate contracts by the AIIB for the implementation of market risk tools and order management systems support, according to a Sept. 22, 2022, Senate Notice Paper. The Notice Paper didn’t provide details about LEA or ISW Consulting.

In 2017, Parliament passed the Asian Infrastructure Investment Bank Agreement Act, committing to buy up to US$375 million worth of bank shares—then the equivalent of roughly CAD$510 million. In testimony at the Senate finance committee, then-Finance Minister Bill Morneau said the spending was worth thousands of jobs, according to Blacklock’s Reporter.

“Thousands upon thousands of Canadian jobs are reliant on our current trading relationship with China,” Morneau said.

In a news release on Morneau’s meeting with AIIB President Jin Liqun in April 2018, the Government of Canada said it has purchased 0.995 percent of total AIIB shares, worth USD$199 million (roughly CAD$256 million), over five years, starting in 2017–18. This amount of shares translates to a voting power of 1.07 percent, it said.

‘Many Concerns’

Proposed by China, the AIIB was established on Christmas Day in 2015, with an initial 57 member states. The bank was billed as the first global multilateral financial institution spearheaded by China and has grown to have over 100 members.

Critics of the multilateral project, however, warned of the Chinese Communist Party’s (CCP) scheme to project its power globally through the AIIB.

In a Nov. 23, 2020, Canada-China Committee meeting, then Foreign Affairs Minister François-Philippe Champagne said China’s banks at the time had already loaned $461 billion to member states to build infrastructure, which he said had raised “many concerns over debt sustainability, transparency and international standards on labour and the environment.”

“China’s ambition even reaches the Arctic region, where it aims to develop shipping lanes, calling it the polar silk road. This is a new reality that we need to take into account and thus engage with China with eyes wide open,” the minister said.

In response, former Conservative foreign affairs critic Michael Chong said many have described this as CCP’s “debt diplomacy.”

“Part of the debt instruments that China is using to project its power strategically through the Asia-Indo-Pacific is the China-led Asian Infrastructure Investment Bank. It’s an instrumental part of their strategy in the region. It’s something that the Government of Canada has joined and contributed hundreds of millions of dollars to,” Chong said as he called on the government to withdraw membership from the institution.

Conservative legislators have proposed cabinet pull its financing from the Chinese bank. The Party in 2020 said it would repeal the Investment Bank Agreement Act, according to Blacklock’s Reporter.

“I don’t believe Canadian taxpayers should be sending any money to China,” former Tory Leader Andrew Scheer told reporters at a press conference. “We’re talking about a Communist dictatorial government that abuses human rights, quashes freedoms, violates rights of its citizens, and has a very aggressive foreign policy all throughout the region.”

“We don’t believe the government should have ever put money into the Asian Infrastructure Investment Bank,” he said. “I’ve never understood why Canadian tax dollars have to go help build roads and bridges in other countries.”