Canada set to join China-backed infrastructure lender

BEIJING — Canada will apply to join the China-backed Asian Infrastructure Investment Bank (AIIB), Ottawa’s finance department said on Wednesday, in a coup for Beijing after Washington had tried to dissuade US allies from signing up.

“Canada is always looking for ways to create hope and opportunity for our middle class as well as for people around the world,” Finance Minister Bill Morneau said in a statement issued in Beijing. “Membership in the AIIB is an opportunity to do just that.”

The Beijing-headquartered multilateral lender, which began operations earlier this year, has been seen by some as a rival to the World Bank and the Philippinesbased Asian Development Bank, which was founded in 1966.

The $100 billion AIIB counts several major European countries among its shareholders after they joined up despite the objections of the United States, which hosts both the World Bank and International Monetary Fund.

Critics feared the new bank would set much lower standards for projects and undermine principles of social, environmental and economic sustainability adhered to by the World Bank and other multilateral development finance institutions.

AIIB president Jin Liqun welcomed Canada’s decision, which he called “a vote of confidence” in the institution that showed Ottawa’s “confidence in the strong foundations the bank has built in our first few months”.

The US and Japan — the world’s third-largest economy — have notably declined to join the AIIB. In a speech, Morneau suggested Canada was seeking to strike a balance between its close ally and neighbour the US, and the growing Asian giant.

China is Canada’s secondlargest trading partner after the United States, with exchanges topping Can$85 billion ($66.5 billion) last year.