Canada: A steadfast friend to the Philippines

Last week, newly designated Canadian Ambassador David Hartman presented his credentials to President Marcos. Prior to his assignment to the Philippines, Ambassador Hartman played various key roles in the Investment Bureau of Canada and Canada’s Department of Foreign Affairs. He was director general of Canada’s South Asia Bureau where he was responsible for the oversight of seven countries. The fact that a man of Ambassador Hartman’s stature is assigned to Manila exemplifies how important the Philippines is to Canada’s foreign policy.

Canada recently announced its Indo-Pacific Strategy, which is of great relevance to the Philippines. Watch out for a deep dive on this next week. For now, however, let me delve on interesting factoids about our great northern ally and the ties that bind our two countries.

Canada has always been a steadfast friend to the Philippines, albeit often working in the background. She was the first foreign responder when Typhoon Yolanda struck. She was also the first to build housing facilities for Yolanda’s displaced victims. She endowed the Philippines with billions of dollars in official development assistance and social development funding. In terms of security, she helps stabilize the tense situation in the West Philippine Sea through 24/7 naval patrols. This, among many other forms of support.

The Philippines and Canada are of like minds. Both value peace and the rules-based framework for international discourse. Both value democracy, free market capitalism and the individual’s pursuit of wealth and happiness. With the exception of the blood-thirsty leadership of the last administration, both countries honor human rights.

Canada opened her doors to over one million Filipinos who immigrated to her shores. Filipinos are Canada’s second largest source of immigrants and a vital contributor in her service and health care sectors.

In commerce, bilateral trade between both countries reached $3.5 billion in 2019, the year before the pandemic. In the same year, Canada invested $2.6 billion in Philippine industries. Trade between both nations reached $2.1 billion and $2.7 billion in 2020 and 2021, respectively, with the Philippines enjoying hefty trade surpluses year on year.

Although growing steadily, trade and investments can increase exponentially if the proposed Free Trade Agreement (FTA) between Canada and ASEAN is enacted. The FTA is presently under review and the Philippines will do well to endorse it.

In fact, a study commissioned by ASEAN shows that if the FTA materializes, Philippine exports of manufactured goods can grow by at least 35 percent while primary goods (e.g. metals and ores) can increase by 8.8 percent. An FTA will allow the Philippines to export more coconut oil, apparel, footwear, leather and rubber products as we move forward. Exports of services, like business processes, is seen to expand by 9.6 percent as well. The FTA offers enormous wins for the Philippines. Back to Canada – how did she become so wealthy? For one, the country is endowed with enormous natural resources. She is an energy and mineral superpower with the world’s third largest proven reserves of oil, base metals, coal and diamonds collectively worth $33 trillion. The world lauds the Canadians for being vanguards in responsible mining and oil extraction. In fact, the Philippine mining industry adopted Canada’s mining standards as it works towards greater sustainability and inclusiveness.

Canada has an interesting economic history. In her early days of nationhood – from 1867 until the early part of the 20th century, the country derived much of her incomes from the export of timber, cod, furs and minerals to Great Britain and France, both of whom have governmental ties to Canada. After World War 2, trade shifted to the United States as it became the new superpower and the world’s largest consumer market.

Being the next-door neighbor to the US was a huge advantage. But commonalities in language, values and culture made Canada America’s preferred investment destination and source of imports. Following World War 2 in 1948, Canada doubled its exports to the United States in just three years. Trade between the two continued to compound from the 1960’s to the 1990’s as Canada played a critical role in the supply chains of American industries.

But everything changed when the North American Free Trade Area (NAFTA) was ratified in 1994 (now called the United States, Mexico and Canada Agreement). Trade between Canada and the US (plus Mexico) grew in quantum leaps, thereby further enriching Canada.

Through the decades, the Canadian economy evolved from a raw material exporter to an industrial manufacturer to a service economy with global dominance in finance and technology. By the turn of the century, it underwent yet another evolution, this time, towards becoming a knowledge-based economy.

Canada’s economy is one driven by free enterprise. Hers is a capitalist regime with minimum state intervention, underpinned by strong institutions, good governance, peace and order. At present, she is the eighth largest global economy with an annual output of $2 trillion for which the average Canadian enjoys an income of $52,000. Canadians enjoy one of the highest standards of living with Vancouver, Calgary and Toronto consistently in the top 10 list of most livable cities. Her social security nets, like health care and pension system, are the envy of many nations.

Canada is member of the G7 but unlike her peers who faced economic deceleration in the last two decades, the Canadian economy continued to expand by more than twice G7’s pace. Her economy is so resilient that it withstood the 2008 financial crisis without contracting. This year, Canada will post positive growth despite the looming global recession.

Canada’s success can be attributed to its highly educated population, diversity, multiculturalism and inclusion.

With the strength of her economy, military and diplomatic gravitas, Canada intends to deepen its relations with Indo-Pacific nations, notably the Philippines. Ambassador David Hartman is leading the charge.

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