At least one Canadian company, Hatch Consulting, has won a procurement contract with the Asian Infrastructure and Investment Bank
At least one Canadian company has successfully bid on a contract with the Asian Infrastructure and Investment Bank, a nascent multilateral institution based out of Beijing.
In 2017, Canada formally joined the bank, which funds infrastructure projects in Asia, and pledged to spend $256 million over five years on its one-per-cent shareholding with Finance Minister Bill Morneau promising that Canadian companies would be able to benefit from involvement in projects.
Last fall, Finance Canada reported in a document tabled in the House of Commons that no Canadian investors or companies had gotten involved yet. With the deteriorating Canada-China relationship and the United States’s unwillingness to join the bank as a backdrop, Conservative politicians in Canada demanded a withdrawal.
But in conversation with the National Post, a spokeswoman for the bank, Canadian Laurel Ostfield, confirmed that at least one Canadian company, Hatch Consulting, has won a procurement contract with the AIIB. She said others, including a major Canadian firm not SNC-Lavalin are in the running for additional contracts. Hatch’s lead executive for China was not available for an interview this week.
The Bank’s President visited Toronto last month to help “raise awareness” about opportunities. “There’s contracts, and we want more Canadian companies to bid on them,” Ostfield said. “Canadian companies have great skill sets, high quality, great reputations and we just invite them to really participate.”
“There’s contracts, and we want more Canadian companies to bid on them.” – Laurel Ostfield
Canadian companies could’ve bid to work on projects funded by the bank even if Canada had not become a member. Membership provides other benefits to Canada though, Ostfield said, including a seat on a 12-member board of directors charged with strategy, policy and project approval. Although Canada’s share in the bank is small, this gives it some heft in decision-making.
But, hovering over the AIIB are concerns about the potential influence of the Chinese government. The United States warned its allies against joining the development bank when it was announced in 2015.
From the American point of view, this is just another way the authoritarian regime is trying to extend and buy influence like with the Belt and Road initiative, which has seen China invest hundreds of billions of dollars into expanding transportation infrastructure outside of its borders. As a counterbalance, the U.S. is partnering with Japan to fund its own set of infrastructure projects in the region.
Despite its generally friendlier attitude towards China, Canada has in recent months seen plenty of evidence of that country’s self-interest, and the blurry lines between private entities and Beijing’s communist party leadership.
After Canadian authorities arrested a Huawei executive in December on behalf of the U.S., China detained two Canadian citizens, a move widely seen as political retaliation. And China recently announced a ban on Canadian canola citing “hazardous organisms” in seeds, not the first time a non-trade barrier has hurt the agricultural industry.
Ostfield is quick to point out that China was not the only country that supported the AIIB’s development. About 20 countries were involved in the early stages of writing its governance documents and by the time negotiations were finished, 57 countries had signed up as founding members. There are now 93 members in total, including Canada’s allies France, Germany and the United Kingdom.
“We’re not owned by any one particular country,” Ostfield said. The AIIB is similar to, approved by, and works with other institutions such as the World Bank and Asian Development Bank. “Canada historically has been very actively engaged in multilateralism. I think that them applying to be a part of AIIB and ratifying that is another step in that direction,” she said.
Asked whether perceptions about the Canada-China relationship or about the influence of Chinese authorities have caused trouble for the bank, Ostfield said there has certainly been “skepticism.” But she insisted the 200 or so people who work there seven or eight of them Canadians are focused on creating a first-class institution and seeing projects through, including, Ostfield offered as an example, bringing electricity to 2.5 million people in Bangladesh.
“At the end of the day, the proof is going to be in the pudding,” she said. “As we start investing in projects, and people see how our procurement’s run, and we are transparent, then for some that is what’s going to be required before they start to see that AIIB is an independent international organisation.”