Lack­ing pa­tience

En­voy says Canada’s in­fra­struc­ture projects will find lit­tle in­ter­est from Chi­nese in­vestors

The Guardian (Charlottetown) - - BUSINESS - BY ANDY BLATCHFORD AND MIKE BLANCHFIELD JOBS

“Maybe in Canada you have com­plete pro­ce­dures for con­duct­ing large-scale in­fra­struc­ture projects. In China, the pro­ce­dures are also com­plete, but those pro­ce­dures go very fast. So, to com­plete it, a project takes less time.” Lu Shaye

The Trudeau gov­ern­ment’s ef­forts to draw in for­eign cash to help fund big in­fra­struc­ture projects in Canada will likely find lit­tle in­ter­est from China’s deep-pock­eted in­vestors, the coun­try’s en­voy to Ot­tawa says.

Am­bas­sador Lu Shaye told The Cana­dian Press he doesn’t think Chi­nese in­vestors will want to en­dure what he de­scribed as lengthy reg­u­la­tory pro­cesses re­quired for Cana­dian in­fra­struc­ture.

They would prob­a­bly pre­fer to con­tinue fun­nelling their in­vest­ment dol­lars into re­gions with far fewer pro­ce­dural hur­dles, such as East Africa, he said.

“I think it is not easy to build large-scale in­fra­struc­ture in Canada — I’m afraid that Chi­nese in­vestors lack pa­tience with this process,” Lu said through an in­ter­preter in an in­ter­view at the Chi­nese em­bassy.

“They’re afraid that it would take too long to build largescale in­fra­struc­ture in Canada.”

To lure more for­eign in­vest­ment into Canada, Prime Min­is­ter Justin Trudeau and his Lib­eral gov­ern­ment have pitched the coun­try to in­ter­na­tional in­vestors as a sta­ble place with a skilled work­force.

The gov­ern­ment is work­ing on a new fed­eral agency ded­i­cated to at­tract­ing for­eign in­vest­ment — the so-called In­vest in Canada Hub. It also plans to build a sales force to pro­mote Canada abroad and to hire more trade com­mis­sion­ers in or­der to fo­cus on pulling in in­vest­ment from strate­gic mar­kets.

In­fra­struc­ture is key to the Lib­er­als’ long-term strat­egy to lift the econ­omy and to cre­ate jobs. They have com­mit­ted more than $180 bil­lion for new projects, like bridges, rail­ways and tran­sit sys­tems, over the next 11 years.

As part of the fed­eral push to boost in­fra­struc­ture in­vest­ments, Ot­tawa is also es­tab­lish­ing a $35-bil­lion in­fra­struc­ture bank to use public funds as a way to lever­age bil­lions more from pri­vate in­vestors to pay for new, large-scale projects.

In ex­change for their fi­nan­cial com­mit­ments, pri­vate in­vestors would reap steady, pre­dictable mone­tary ben­e­fits such as user fees or tolls.

But as the Lib­er­als con­tinue their quest for for­eign in­fra­struc­ture cap­i­tal, they’re un­likely to get much in­vest­ment love from China.

“Maybe in Canada you have com­plete pro­ce­dures for con­duct­ing large-scale in­fra­struc­ture projects,” the Chi­nese am­bas­sador said. “In China, the pro­ce­dures are also com­plete, but those pro­ce­dures go very fast. So, to com­plete it, a project takes less time.”

Lu brought up an ex­am­ple to make his point: a re­cent pro­posal to build high-speed rail cor­ri­dor be­tween Toronto and Wind­sor, Ont.

The rail line would stretch nearly 400 kilo­me­tres and aims to be fully op­er­a­tional in 2031, a time frame that in­cludes con­struc­tion and reg­u­la­tory pro­cesses such as en­vi­ron­men­tal as­sess­ments. Its es­ti­mated cost is $20 bil­lion.

In com­par­i­son, Lu said, a re­cently com­pleted Kenyan rail­way be­tween Nairobi and Mom­basa — mostly funded by China — took fewer than three years to build, from the plan­ning stage to fin­ish. He added that the project also in­cluded the con­struc­tion of nine new sta­tions along the 480-kilo­me­tre line.

The $4-bil­lion Kenyan rail project, 90 per cent of it fi­nanced by China, faced crit­i­cism and protest be­cause of its en­vi­ron­men­tal im­pact. It cuts through Kenya’s famed na­tional wildlife parks and has af­fected the habi­tat of an­i­mals.

Last week, a $12-mil­lion, Chi­nese-funded bridge col­lapsed in an­other part of Kenya, cre­at­ing em­bar­rass­ment for its builder and for Kenyan Pres­i­dent Uhuru Keny­atta, who is run­ning in his coun­try’s Au­gust elec­tions on a plat­form of im­prov­ing its crum­bling in­fra­struc­ture.

Con­ser­va­tive for­eign af­fairs critic Peter Kent said the Kenyan bridge col­lapse is an ex­am­ple of the fail­ure of China’s “in­fra­struc­ture diplo­macy” and some­thing the gov­ern­ment should be wary of.

“That’s not un­usual given some of the Chi­nese gov­ern­ment’s be­hav­iours in the past

CP PHOTO

China’s Am­bas­sador to Canada Lu Shaye par­tic­i­pates in an in­ter­view at the Em­bassy of the Peo­ple’s Re­pub­lic of China in Canada, in Ot­tawa on Thurs­day, June 29. Shaye told The Cana­dian Press he doesn’t think Chi­nese in­vestors will want to en­dure what he de­scribed as lengthy reg­u­la­tory pro­cesses

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