Is it any wonder that Canada has become the board upon which the global superpowers are playing out their resource chess game? The country has 175 billion barrels of oil in the ground. How big is that? BIG! To put it in perspective, it makes Canada second only to Saudi Arabia in proven oil reserves.
“…recent Chinese firms’ billion-dollar incursions into the Alberta oil sands have turned many heads. Last year close to $2 billion was spent for a stake in Athabasca Oil Sands Corp projects, while this year nearly $5 billion was spent for a stake in Syncrude Canada in April and $1 billion into Penn West in May.”
By outward appearances, the Canadians seem OK with this Chinese attention. In fact, Prime Minister Stephen Harper was recently quoted as saying:
“Expect more Chinese investment in the resource and energy sectors…there will definitely be more.”
But, internally, Canada may be a bit more circumspect. Back in 2008, Foreign Affairs Canada prepared a briefing document that specifically warned that the SWFs of Russia, China, Singapore and the Gulf States operated according to suspect motives. The report apparently said:
“Sovereign funds will continue to seek to acquire resource assets both for their profitability and in order to secure their country’s access to these commodities…Over time this will require Canada to fully develop an investment policy with respect to sovereign funds. The difficulty for Canada is that we have given up the levers of sovereignty in a western market economy model while most of the emerging powers are going in another direction.”
Obviously, FA could have been over-reacting to SWFs’ interest in Canada, as there are plenty of commercial justifications for investing in Canada right now.
Nonetheless, the ongoing interest and remarkable access of some SWFs to ‘strategic assets’ has taken on new levels of political intrigue. In fact, some (such as this newspaper editorial) suggest that SWFs’ freedom to operate in Canada may stem from “agents of influence” within Canadian provincial governments:
“When governments must decide on allowing sales of resource companies to sovereign wealth funds, a friendly voice at the cabinet table can be precious.”
Outlandish? Maybe not. In case you missed it, Richard Fadden, who is the Director of the Canadian Security Intelligence Service, accused some of Canada’s policymakers of being under the influence of foreign powers (an accusation that sparked outrage across Canada). And David Harris, who is the former chief of strategic planning for CSIS, recently called China’s influence operations in Canada as being:
“…a multi-level manipulation of the democratic polity and its governors.”
Those are some pretty strong words from some highly respected intel operators that, at the very least, paint a picture of an aggressive China in Canada. So, can we conclude that China is wielding the full arsenal of its state apparatus – from its SWF all the way to its spies – to secure Canadian resources? How would I know? But it’s fun to pose the question…