Canadian attitudes towards China have undergone a dramatic shift – from ambivalence to distrust – since the two countries became locked in a diplomatic dispute in late 2018. This paper argues that these hardened sentiments are unlikely to dissipate and Canada–China relations seem to have entered a new, warier phase.
What happens next?
The Canada–China relationship remains tense and largely frozen. Chinese officials initially refused to speak with their Canadian counterparts following the mutual arrests, but communications resumed in mid-2019. A few months later, the two countries exchanged ambassadors, filling positions that had been vacant on both sides. China resumed its imports of Canadian pork and beef in November, perhaps due to domestic shortages as a result of an epidemic of African swine fever in 2018–20. Bilateral talks aimed at restoring canola shipments began in late 2019 and have continued. The necessity of responding to the COVID-19 pandemic from early 2020 also fostered a measure of cooperation between the two governments: Canada delivered protective equipment to China at the height of its outbreak, and China reciprocated when the disease spiked in Canada.
However, the détente was short-lived. In May 2020, a Canadian judge rejected a motion from Meng’s lawyers to end her extradition proceedings. Three weeks later, Chinese authorities formally indicted Spavor and Kovrig on charges of espionage and ‘gathering state secrets and intelligence for foreign countries’.22 China also announced the discovery of beetles in a shipment of logs from Canada, raising concerns that another Canadian export might be subject to restrictions.23 The timing of these developments suggested that China was responding to the Canadian court’s ruling and seeking to apply further pressure on the Canadian government.
China’s imposition of a new national security law in Hong Kong has also exacerbated tensions. In July 2020, Canada warned travellers of an increased risk of arbitrary detention in Hong Kong, blocked Canadian exports of sensitive military goods to the city, and suspended the Canada–Hong Kong extradition treaty. China’s foreign ministry, in turn, has vowed ‘consequences’ for Canada’s actions, without specifying what these might be.24
Canadians and their political leaders will not soon forget the Chinese government’s behaviour during this period. Domestic support for launching major new bilateral initiatives has evaporated and is unlikely to return, even if Kovrig and Spavor gain their freedom. Resuming discussions on a potential comprehensive FTA, for example, is virtually inconceivable.
Ottawa may, however, pursue trade opportunities with China at the sectoral level, driven in part by the perceived urgency to diversify Canada’s trade relations and to reduce dependence on the US market. During his term in office, Trump has threatened Canadian economic interests in unprecedented ways, including by imposing ‘national security’ tariffs on Canadian steel and aluminium, stating that he would ‘tear up’ the 1994 North American Free Trade Agreement (NAFTA), and threatening to impose significant import tariffs on Canada’s automobile sector, which accounts for 10 per cent of the country’s manufacturing GDP.
In the October 2019 University of British Columbia survey, 61 per cent of Canadians agreed with the statement: ‘Canada can no longer trust the United States to do the right thing in the world.’
These dangers have been averted for now: steel and aluminium tariffs were lifted and NAFTA renegotiated as the Canada–United States–Mexico Agreement (CUSMA).25 However, the experience has shaken Canadian confidence in its closest ally and trading partner. In the October 2019 University of British Columbia survey, 61 per cent of Canadians agreed with the statement: ‘Canada can no longer trust the United States to do the right thing in the world.’26 Many Canadians also believe that the Trump administration has done too little to secure the release of Kovrig and Spavor, and that the White House has failed to acknowledge the price Canada has paid for fulfilling the terms of its bilateral extradition treaty with the US. After all, Meng is wanted by American, not Canadian, prosecutors.
Another potential flashpoint in Canada’s relations with China (and perhaps with the US) may arise over 5G communications. Canada is the only participant in the Five Eyes intelligence-sharing alliance still not to have decided what role, if any, Huawei equipment will play in these new networks. Ottawa has been mulling its decision for more than a year and a half, but it is unlikely to approve the use of Huawei components in the ‘core’ of the network, or perhaps in any part of it. The Canadian government could follow the UK’s initial determination (recently reversed) to allow Huawei equipment in the ‘periphery’ of its 5G network – Canada’s signals intelligence agency reportedly holds that doing so would not compromise security, whereas the country’s security intelligence service is said to disagree.27 However, such a decision might expose Canadians to unknown surveillance risks from China, as well as to possible retaliation by the US, which has repeatedly warned Ottawa that it will limit intelligence sharing with Canada if Huawei components are permitted in Canadian 5G networks.28 Perhaps seeing that the writing is on the wall, two of Canada’s major telecommunications companies, TELUS Corp. and BCE Inc., announced in June 2020 that they would build their 5G systems with European-made equipment.29
China’s trade actions against Canada and its detention of Kovrig and Spavor, along with the Trump administration’s mercurial treatment of Canada and other US allies, have startled Canadians. They have highlighted risks that Canada faces in a world of intensified geopolitical rivalry, where Canada may be subject to direct forms of great-power coercion. Although there is no equivalence between the US and China in terms of moral authority – the former being a troubled democracy, the latter an increasingly repressive autocracy – the US has greater potential to harm Canada if it wishes to do so. Seventy-five per cent of Canada’s merchandise exports, representing approximately one-fifth of the country’s GDP, are destined for the US. China, by contrast, receives less than 5 per cent of Canada’s exports.30 Although managing the current dispute with China is important, Canadian leaders understand that maintaining productive relations with the US and reliable access to its market is a vital national interest.
With tensions rising between the US and China, Canada will need to weigh its strategy carefully. The perception of China as a strategic competitor of the US has rapidly taken hold within the US government and in both major US political parties. This view, which will almost certainly outlast Trump’s tenure in office, also has implications for Canada–US relations. During the negotiations that led to the conclusion of the revised North American trade agreement, US officials insisted on adding new text providing for the expulsion of any party that negotiated a comprehensive FTA with a ‘non-market country’, widely understood as meaning China. This provision was unnecessary – legally it added nothing to the agreement, and the political conditions in Canada have all but precluded free trade with China, as we have seen – but it was a clear warning shot from the US administration. It also offered a glimpse of the kind of pressure Canada and other countries could face in the future, particularly if the US veers towards a more confrontational strategy with China and demands that its traditional allies follow suit: ‘Are you with us or against us?’
22 Hernández, J. and Porter, C. (2020), ‘China indicts 2 Canadians on spying charges, escalating dispute’, The New York Times, 19 June 2020, https://www.nytimes.com/2020/06/19/world/asia/china-canada-kovrig-spavor.html (accessed 19 Jun. 2020).
23 Vanderklippe, N. and Chase, S. (2020), ‘China says it has found insects in Canadian logs, raising fears that Beijing is targeting another key export’, The Globe and Mail, 16 June 2020, https://www.theglobeandmail.com/world/article-china-says-it-has-found-insects-in-canadian-logs-
raising-fears-that (accessed 19 Jun. 2020).
24 Vanderklippe, N. (2020), ‘Chinese government threatens Canada, warning its own citizens to exercise caution when travelling to the country’, The Globe and Mail, 7 July 2020, https://www.theglobeandmail.com/world/article-chinese-government-threatens-canada-warning-citizens-to-exercise (accessed 7 Jul. 2020).
25 The pact is called the United States–Mexico–Canada Agreement (USMCA) in the US.
26 Evans and Li (2019), Third National Survey on Canadian Public Attitudes on China and Canada-China Relations.
27 Fife, R. and Chase, S. (2020), ‘Canadian intelligence agencies at odds over whether to ban Huawei from 5G networks: official’, The Globe and Mail, 12 November 2019, https://www.theglobeandmail.com/politics/article-canadian-intelligence-agencies-disagree-on-whether-to-ban-huawei-from (accessed 8 Jun. 2020).
28 Scherer, S. (2019), ‘Canada’s use of Huawei 5G would hamper its access to U.S. intelligence: U.S. official’, Reuters, 23 November 2019, https://www.reuters.com/article/us-usa-huawei-tech-canada/canadas-use-of-huawei-5g-would-hamper-its-access-to-u-s-intelligence-u-s-official-idUSKBN1XX0LA (accessed 8 Jun. 2020); Simpson, K. (2020), ‘State Department says U.S. will reassess intelligence-sharing with Canada if it lets Huawei into 5G’, CBC News, 4 June 2020, https://www.cbc.ca/news/politics/huawei-5g-state-department-trudeau-china-1.5598548 (accessed 8 Jun. 2020).
29 Blatchford, A. (2020), ‘Canadian telecom giants move to European 5G suppliers as government mulls Huawei ban’, Politico, 3 June 2020, https://www.politico.com/news/2020/06/03/canadian-telecom-giants-move-to-european-5g-suppliers-as-government-mulls-huawei-ban-298994 (accessed 8 Jun. 2020).
30 The figure was 4.98 per cent in 2018, before the recent crisis, and fell to 4.11 per cent in 2019. See Statistics Canada (2020), Table 12-10-0133-01, ‘Canadian international merchandise trade by province and country, and by product sections, customs-based, annual (x 1,000),’ https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1210013301 (accessed 9 Jun. 2020).