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Canada’s economic and strategic interdependence with the United States makes Canada an important priority for the People’s Republic of China in realizing its geopolitical goals. There is increasing concern by Canadian intelligence agencies that Canadian politicians, civil servants, and policy advisers are subject to Chinese political influence. There is also significant evidence that Chinese diaspora communities, especially the Chinese language media in Canada, are subject to intimidation by agents of the Chinese state. In response to persistent political pressure by agents of the PRC, the government of Canada has authorized transfer of technology developed in Canada with significant innovative military applications to Chinese state-related concerns. The government of Canada is receptive to Chinese political pressure due to strong imperatives to diversify Canada’s economic dependence away from the United States in light of uncertainty over the future of NAFTA. The Chinese government holds out the promise of better access to China’s large market if Canada complies with China’s political and economic foreign agenda.

The Context of Canada’s Pro-China Politics

Historically, Canada’s affinity for the PRC has been informed by the urgency on the part of anglophone Canada to stave off the seductive challenge of US technology and free market ideology. At the time Canada was negotiating the terms for diplomatic relations, China was providing support for the Viet Cong forces that were killing Americans. Many Canadians including Prime Minister Pierre Elliott Trudeau had considerable sympathy for Mao’s policies of proletarian cultural revolution, largely disregarding their illiberal, repressive character as if China was seeking a distinctive society and economy consistent with Chinese cultural norms, just as Canada was seeking to maintain its distinctiveness consistent with Canadian cultural norms.

Canada’s current attitude towards engagement with the PRC suggests path dependency in the policies of Trudeau’s son Justin, the current prime minister. Much of Canada’s accommodation with China’s contemporary political and economic demands is related to a desire to diversify away from overdependence on the United States. In addition, due to historical factors and lucrative business engagements, there has been reluctance to acknowledge the threat of accommodation to Chinese demands to Canada’s democracy and sovereignty.

A leaked transition document presented to the Trudeau government on its assumption of power in 2015 urged that the “significant and challenging policy contradictions posed by a rising China” be managed by “informing public opinion about the critical importance of China to Canada’s future prosperity” and “addressing negative opinions hindering Canada’s interests.”¹ Justin Trudeau wrote in 2012, “We deceive ourselves by thinking that trade with Asia can be squeezed into the 20th-century mold. China, for one, sets its own rules and will continue to do so because it can. China has a game plan. There is nothing inherently sinister about that. They have needs and the world has resources to meet those needs. We Canadians have more of those resources—and therefore more leverage—than any nation on Earth.”²

The Canadian government is now actively participating in a two-year project, bankrolled by major corporations, entitled “Public Policy Forum: Consultative Forum in China,”³ whose purpose is to change Canadian public opinion in favor of a free trade deal.⁴ Nevertheless, at the popular level there are more and more reservations about the government’s desire for more political and economic integration with the PRC.

Undermining Democratic Institutions and Norms

In March 2010 the director of the Canadian Security Intelligence Service (CSIS), Richard Fadden revealed that there are several municipal politicians in British Columbia, and in at least two provinces, ministers of the Crown, who are persons of interest; CSIS believes these politicians are at least under the general influence of a foreign government⁵ seeking to “clandestinely influence Canadian politicians and policy at the federal, provincial and municipal levels.”⁶ The foreign government referred to was identified as China by Fadden, who further revealed that CSIS also has concerns over public servants under China’s influence.⁷ Consequently, Fadden was called to give evidence about his remarks to the House of Commons Standing Committee on Public Safety and National Security.

In a later interview, Fadden indicated that China tries to obtain influence in Canada “in a variety of ways, some entirely acceptable some less so, they’re very good at this and they do it quite systematically.”⁸ Citing the CSIS mandate to protect Canadians and our democratic process from covert and deceptive influence, Fadden indicated that the cases referred to in his speech did not “meet the criteria for us to consider them to represent immediate threats to the security of Canada.”⁹ He explained his interpretation of foreign interference as “an attempt by agents of a foreign state to influence the opinion, views, and decisions of Canadians with the aim to obtaining a political, policy, or economic advantage.” He continued, “the CSIS Act talks about the threat of foreign influenced activities as activities within or relating to Canada that are detrimental to the interests of Canada and are clandestine or deceptive or involve a threat to any person. This is, of course, a broad definition that could involve many facets of behavior, but it’s important to note that for behavior to be considered as true foreign influence, it must be directed against the interests of Canada and must be deceptive in nature.”¹⁰

Fadden indicated in his testimony regarding the political figures of interest to CSIS as under the influence of China: “they haven’t really hidden their association but what surprised us is that it’s been so extensive over the years and we’re now seeing, in a couple of cases, indications that they are in fact shifting their public policies as a reflection of that involvement with that particular country.”¹¹ He said, “unlike espionage and terrorism that can result in more immediate damage to our national security, foreign influence is really more of a process of relationship-building. This is not a simple, binary, black and white issue. We are dealing here with a spectrum of behavior by foreign entities that often start out innocently but later veer toward something that actually harms Canadian interests. This is a very subtle process.”¹²

“Central to our concerns with true foreign interference is the strong belief that decisions about Canada must be made by Canadians for Canadian reasons. Thus, a case that would be of interest to CSIS would involve an agent of a foreign power providing a Canadian, over months or years, with various benefits, which become increasingly significant yet less and less open over time. This relationship includes an extensive exchange of views, opinions, and information slanted toward what the foreign state is interested in. At some point, consciously or not, the Canadian’s views are changed and he or she begins to push or advance them as his or her own, thus potentially affecting decisions with which he or she is involved. The very important point is that foreign interference is intrinsically objectionable to Canada, whether or not it succeeds in attaining the objective of the foreign state, because such activity becomes detrimental to the interests of Canada. We realize that citizens are sometimes caught in this process of foreign interference unwittingly, and we assume from the outset that citizens are loyal.”¹³ Later before the Standing Committee Fadden said “they are victims. I don’t think they are the problem. I think the foreign power is the problem.”¹⁴

In 2015, The Globe and Mail investigation revealed that one of the two ministers is Michael Chan, a cabinet member in the Liberal Government of Ontario. In the course of monitoring the telephone communications of the Consulate of the PRC, CSIS detected a high frequency of telephone conversations between Chan and Zhu Taoying, China’s consul-general in Toronto. CSIS further believes Chan had an unusually close rapport with her until 2012, having conversations as often as once a day. The minister is not suspected of treason, but such close ties to Chinese officials are of such concern to Canada’s spy agency that it took the extraordinary step of sending a senior official to raise the matter with the Ontario premier’s office at Queen’s Park.¹⁵

Chan explained his motivation for entering provincial politics in 2007: “For me, it is how I am able to bridge Canada and China. I can be in a position to promote both jurisdictions for the benefit of the people. I think that’s important.” Two years after his election as a member of the Ontario Provincial Legislature, he travelled to Beijing to attend the military parade to mark the 60th anniversary of the PRC. He was quoted in Xinhua, “Great is my motherland, and great are the people of my motherland […] today, seeing the army on parade with such precision and the high spirits of the people, I am moved even more by the strength and power of my motherland.” Later Chan’s spokesman said that he could not have made such a statement to the Chinese press as Chan could not speak Mandarin at the time. But the Xinhua reporter Zheng Liu who wrote the piece affirmed to The Globe and Mail that it was a direct quote from Mr. Chan`s interview with him.¹⁶ Chan’s strong support for the application for Chinese government funding to establish a Confucius Institute to encompass all of the Toronto District school board was identified by the chair as “crucial” to the success of the application although he had no responsibility for education in his portfolio and his riding is not in Toronto.

Chan defended China’s human rights record in 2016, suggesting that improvements in people’s welfare under Communist Party rule trumped concerns over democratic freedoms.¹⁷ Conservative MP Jason Kenney, erstwhile federal government Minister of Multiculturalism, said of Mr. Chan, “I get the impression that he sometimes regards himself as an unofficial ambassador for the People’s Republic of China. I don’t think I have ever heard Michael Chan assert Canada’s interests as against Chinese policy and I’ve never heard him assert Canadian principles with respect to human rights as it relates to the PRC. So I think that undermines the Canadian position, which should be a balanced one.”¹⁸

Chan demanded that Kenney apologize, threatening to take legal action against him. Chan also demanded an apology from The Globe and Mail¹⁹, saying it is “ludicrous” and “totally false” for Canada’s spy agency to believe he may be susceptible to Chinese government influence.²⁰ When the apology was not forthcoming, he sued the Globe and Mail’s publisher, editor-in-chief, reporter Craig Offman, and occasional contributor of opinion pieces, Charles Burton, for defamation. The matter has yet to come to trial.

After The Globe and Mail exposé was released, there was much support expressed for Chan by Liberal Party colleagues. Dwight Duncan, Ontario’s finance minister and deputy premier at the time CSIS brought the allegations to the province, took aim at CSIS for what he called a “smear” against “one of the most decent, honorable people I know.”²¹Ontario premier Kathleen Wynne characterized Chan as a man of “sterling character,” who had landed nearly $1-billion worth of investment from Chinese companies during a trade mission the previous fall. Evidently Chan is seen as highly effective in building a relationship with China, an important market for Ontario, and as an outstanding raiser of political donations from the Chinese community for the Liberal Party and facilitator of ethnic Chinese Liberal Party candidates for election at all levels of government.²² National security is not a provincial government mandate. Chan was subsequently promoted to Government of Ontario minister of international trade.

The Canadian House of Commons Standing Committee on Public Safety and National Security’s “Report on Canadian Security Intelligence Service Director Richard Fadden’s Remarks Regarding Alleged Foreign Influence of Canadian Politicians” released in March 2011 was a scathing indictment, saying that “Mr. Fadden’s statements had negative and harmful impacts on Canadians of Chinese origin and other cultural backgrounds, and their elected representatives.” Among the recommendations were “that the Government of Canada renounce categorically Mr. Fadden’s statements and apologize to the Chinese Canadian community, and other cultural communities implicated in and offended by Mr. Fadden’s allegations concerning growing foreign interference in domestic politics, for approving and allowing Mr. Fadden to make these unsupported assertions; and that the Prime Minister issue said apology in the House of Commons at the earliest opportunity.” The report also demanded “that the Minister of Public Safety require Richard Fadden to resign for having stated, in circumstances entirely under his control, that ministers in two provinces as well as municipal elected officials in British Columbia were agents of influence of foreign governments, thereby sowing doubt about the probity and integrity of a number of elected officials and creating a climate of suspicion and paranoia.”²³

In 2017, The Globe and Mail reported that Tory senator Victor Oh and Ontario Liberal MP Geng Tan were not forthcoming about extensive travel to China, where they apparently met with officials working for the CPC Central Committee’s United Front Work Department.²⁴ It also reported some trips not declared by the two as required by Canada’s Parliamentary Ethics Commissioner’s office if an organization sponsors the travel. Tan and Oh said they had paid for the trips themselves and, according to the Globe, Senator Oh is a frequent traveler to China and prominent at banquets and events in Canada where Chinese diplomats and party bigwigs are invited guests. He has accepted trips paid for by the governments of Jilin, Hainan, and Hubei provinces, as well as business groups and Chinese airlines. Tan, a native of Hunan who immigrated to Canada in the late-1990s, initially denied making one of the trips but recalled the travel when he was shown photos of himself with officials of the UFWD and Chinese People’s Political Consultative Conference taken in China at that time. Like Mr. Chan, Mr. Tan indicated that he sees his role as an elected MP as promoting friendship between Canada and China and "mutual understanding and respect between two peoples."²⁵

In 2017, photographs of Justin Trudeau at fundraisers in the homes of Chinese-Canadians appeared in a newspaper in China published by the CPC’s Overseas Chinese Work Department. They showed him posing with Chinese-Canadian donors and with non-Canadian Chinese citizens, with the flag of Canada and the flag of the PRC prominent in the background.²⁶ Over 80 guests got their pictures taken with Trudeau at the $1,500 per ticket event. Attendance figures suggested that the Liberal Party collected up to $120,000 per event from ethnic Chinese donors meeting with Trudeau in a private setting.²⁷ One attendee, Zhang Bin, a political adviser to the Chinese government described as “a senior apparatchik in the network of Chinese state promotional activities around the world” with a partner later donated $1 million to the Pierre Elliott Trudeau Foundation (it is illegal for foreign nationals to make donations to Canadian political parties).²⁸ This has led to concern that Canada-China economic integration, especially if Canada and China finalize a FTA, will increasingly lead to Canadian compliance with the business culture wherein Chinese businesspersons cultivate political patrons by giving politicians or their relatives gifts or benefits in kind.

Interfering with the Diaspora Community and Chinese Language Media

1.6 million or 4.5% of Canada’s 35 million population identify as ethnic Chinese. Chinese is the third most spoken language after English and French. In August 2016, Dan Levin of The New York Times published an investigative report entitled “Chinese-Canadians Fear China’s Rising Clout is Muzzling Them.”²⁹ Amnesty International produced a confidential report on Chinese state agents’ harassment of Canadians, the gist of which was reported by Tom Blackwell in The National Post in January 2018 under the headline “’Don’t step out of line’: Confidential report reveals how Chinese officials harass activists in Canada.”³⁰ Both of these list tactics of intimidation against persons of Chinese heritage, especially those with family in China as well as against Canadian academics who write critically about CPC rule.

A reporter from the Chinese-Canadian media who wrote critically about remarks by Foreign Minister Wang Yi, who denounced a Canadian journalist who asked about human rights while he was in Canada, and another who reported on allegations Michael Chan allege that they suffered consequences. One reports receiving death threats and another being fired under Chinese Government pressure. In general, the activities of agents of the Chinese state are claimed to have a chilling effect on Canadian-Chinese newspapers, radio, and TV. There are also allegations of suppression of distribution of the Epoch Times and difficulty in some neutral Chinese papers retaining advertisers.

Representatives of what Chinese call the five “poisons” are aggressively engaged by agents of the Chinese state. These are the Uyghur Muslim minority, independence-minded Tibetans, Taiwanese, democracy advocates, and the Falun Gong all of whom the director-general of Amnesty International Canada, Alex Neve, has indicated are subject to serious harassment in Canada that is “not just a matter of occasional and sporadic incidents.”³¹

Challenging Academic Freedom

There are currently 12 Confucius Institutes at post-secondary institutions in Canada and 35 Confucius classrooms. Sonia Zhao, who came to Canada to teach at McMaster’s institute in 2011, quit her post a year later, then complained to the Human Rights Tribunal of Ontario that McMaster was “giving legitimization to discrimination” because her employment contract forced her to hide her belief in Falun Gong. A copy of her contract, signed in China and obtained by The Globe and Mail, warns that Confucius Institute teachers “are not allowed to join illegal organizations such as Falun Gong.” Zhao said she was trained in Beijing to dodge sensitive topics in class. In 2013 McMaster University did not renew its Confucius Institute contract.³²

In 2014 The Canadian Association of University Teachers issued a statement entitled “Canadian campuses urged to end ties with Confucius Institutes,” noting that “in agreeing to host Confucius Institutes, Canadian universities and colleges are compromising their integrity by allowing the Office of Chinese Language Council International to have a voice in a number of academic matters, such as curriculum, texts and topics of class discussion. Such interference is a fundamental violation of academic freedom.”³³

The Canadian network of Confucius Institutes do not limit their mandate to the educational institutions in which they are housed. The Confucius Institute at Brock University, for example, has a strong United Front mandate, identifying 6 “Community Partners” to which it offers support³⁴: Niagara Chinese Business Council (NCBC), Chinese Cultural Association of Niagara, St. Catharine’s Chinese School, Brock University Chinese Faculty Association, Brock University Chinese Students and Scholars Association, and Jiahuakongjian, a pro-PRC social media platform. The latter reported that the NCBC hosted Senator Victor Oh at a dinner in St Catharine’s in February 2018. Oh praised the NCBC for promoting the social cohesion of the Chinese community and its cooperation with local overseas Chinese groups “in many activities.”³⁵

Economic Interference that Distorts Market Principles and Fairness

The Chinese government has strongly advocated a bilateral FTA, offering assurances of increased exports and narrowing the current 3:1 trade imbalance with China.³⁶ But the asymmetry of relations with China and the incompatibility of institutions have raised concerns about potential threats to Canada’s national security. While the Canadian side focuses on promoting prosperity, Beijing understands economic integration as a tool to facilitate its overall geopolitical interests.

Beijing had complained that Canada’s national security review process of foreign takeovers of Canadian firms under the Investment Canada Act unfairly targets China.³⁷ Ambassador Lu Shaye characterized it as “tantamount to trade protectionism.”³⁸ In April 2017, Premier Li Keqiang engaged Trudeau on this issue in a personal telephone call.³⁹ Subsequently, the ambassador while committing to China opening its markets “a little more” and facilitating “mutual investment” once the FTA was signed indicated that from his government’s perspective aside from acquisition of advanced technologies and products, there are few enticing opportunities for Chinese investors in Canada.⁴⁰ The Liberal government, in turn, overturned the previous cabinet order that prevented a Hong Kong company, partly owned by the Chinese government, from taking over a Montreal firm developing technology applicable to fiber-laser directed energy weapons.⁴¹ Later Canada permitted a Shenzhen firm to acquire Norsat International, a provider of satellite communication systems used by military customers, including the Pentagon and the government of Taiwan, apparently without performing an in-depth national security review.⁴²

Currently there is debate in Canada over whether the China Communications Construction Company should be allowed to purchase Canada’s largest publicly traded construction company, Aecon Group. Aecon is about to start work on the Darlington nuclear power plant and bid on a project to build and monitor a new bridge between Canada and Detroit. The growing public outcry against the sale led the government to announce in February a full national security review, albeit in secret. If Ottawa bows to Chinese pressure and allows this sale, based on past experience it would be reasonable to expect the new version of Aecon to enter unrealistically competitive bids on critical Canadian infrastructure projects, and the Chinese military to have the blueprints of all past and future Aecon projects.⁴³

The asymmetrical power relationship has led to a lot more take than give on the Chinese side. In addition to allowing the above high-tech transfers, Ottawa is unlikely to spoil the FTA talks by reiterating its support for the Permanent Court of Arbitration’s decision that declared China’s expansive claims over the South China Sea as illegal under the UN Convention on the Law of the Sea; or demanding China halt its pervasive cyberespionage of Canadian government and business servers; or expelling Chinese security agents alleged to be furthering Beijing’s interests by harassment and intimidation in Canada. There are other incentives to comply with China’s demands. China’s threat last summer to halt $2-billion in annual imports of Canadian canola seed on phyto-sanitary grounds is instructive. The agreement negotiated in 2016 to keep accepting Canadian canola seeds expires in 2020.⁴⁴

The Government Response

In June 2017 the Canadian Public Policy Forum launched a two-year consultative forum on Canada’s relationship with China promising “a valuable injection of fresh ideas and understanding.” The first forum included 35 participants about half from the Chinese Research Partnership and the others from senior levels of the Canadian civil service and business. The Canada-China Business Council, to which many participants have connections, is dedicated to facilitating trade and investment with China. Its founding members include the China International Trust and Investment Corporation, an arm of the Chinese government. The vice-chair of the Bank of Montreal Financial Group, Kevin Lynch, former clerk of the Privy Council and Secretary to the Cabinet, Canada’s most senior civil servant, was co-chair of the Consultation. He is also a director of China National Offshore Oil Corporation, the Chinese state-owned enterprise that bought Canadian energy company Nexen in 2012.⁴⁵

In the documents about the consultation are such statements as: China today is reflective of history and unique institutions so societal values and practices differ; the West should accommodate international rules and institutions to China’s values and interests; make Canadians aware of important economic benefit; media creates public opinion that is unsophisticated, polarizing choice of trade vs. human rights; need to counter with nuanced and sophisticated alternative discourse to 50% of population that can have their minds change; the "experts" have complex insight, public opinion is to be brought ‘round’; replace human rights with environment, social, educational, governance collaboration with CCP, public policy should not be dictated to by public attitudes.⁴⁶

In December 2017, Trudeau visited China with a view to initiating formal binding negotiations to an FTA. But in his meeting with Li Keqiang, Trudeau demanded that China agree that this would be “a progressive trade deal” addressing issues such as gender, the environment, and labor. “China is very aware that this is a precedent as they move forward with the first trade deal with a G7 country and there is a desire that we get it right,” Trudeau said. As a consequence, Li cancelled their scheduled joint press conference and no further negotiations on an FTA have ensued.⁴⁷

Conclusion

Postulating collaboration between Chinese authorities, Canadian policy-makers, Canadian businesses active in China, and Canadian think tanks, partially supported by these businesses is still speculative. But while the think tanks tend to produce reports urging much more Canadian collaboration with China on Chinese terms and key political figures and senior civil servants who on retirement have been appointed to lucrative boards of Chinese or China business-associated firms or as well-paid advisers to law firms connected to companies with close relations to Chinese business networks does not indicate any formal agreement between them and agents of the Chinese state. There is no evidence of China promising to generously reward Canadian officials after they leave government service if they support the PRC’s agenda in Canada in their official capacity.

China has the largest diplomatic delegation to Canada–169 compared to the United States with 138 many likely engaged in activities related to the Chinese Minister of State Security or the Party’s United Front Work Department.[48] It is incumbent on the Government of Canada to devote more resources to ensuring that Chinese diplomats do not engage in activities inconsistent with their diplomatic status and that agents of the Chinese state engaged in illegal activities be subject to account by judicial process based on a body of law that clarifies the “grey areas” of acceptable and unacceptable activities by those seeking to promote the interests of the PRC in Canada.