China's Finance Minister Lou Jiwei (L) gives a speech, with the guests of the signing ceremony of the Asian Infrastructure Investment Bank at the Great Hall of the People in Beijing October 24, 2014.Takaki Yajima/Reuters
Canada has missed a key deadline for joining a Beijing-backed infrastructure bank, limiting the influence the government will have over how the new institution will run.
China set Tuesday, March 31, as the last day for governments to signal their interest in becoming founding members of the Asian Infrastructure Investment Bank, which seeks to fund roads, railways and other projects in the region. More than 40 countries signed on, generating significant global momentum for the bank as it works out the details of how the new organization will be governed.
Both Norway and Taiwan said this week that they, too, would join the AIIB. The United States, which initially raised strong objections to the new institution, has since indicated it would look to co-finance projects with the bank, a sign that even the AIIB's staunchest opponent has softened its views.
Japan, another notable holdout, said Tuesday it would wait to see what the bank's governance structures look like before deciding whether to get involved. Some Western countries have raised concerns about the power Beijing may hold in the new bank and whether the AIIB will meet environmental and social standards.
Canada has said little about its plans, but the parliamentary secretary to the Finance Minister signalled last week that Ottawa would not get involved with the new bank before the Tuesday deadline, noting the Chinese government had indicated that Canada would be welcome to participate at any time.
Asked for an update on Tuesday, a spokesman for Finance Minister Joe Oliver said in an e-mail that Ottawa "continues to assess" whether to join the new bank.
Yves Tiberghien, a professor at the University of British Columbia and senior fellow at the Asia Pacific Foundation of Canada, said Ottawa's lack of action is beginning to stand out after so many other countries have decided to join the AIIB.
"It's a very fluid game today," Prof. Tiberghien said. "Everything is changing very fast and there's a lot of uncertainty. So if someone stands still, then already they are losing, because others are moving forward."
Prof. Tiberghien said Beijing wouldn't openly block Canadian companies from working in China, and there's no reason to think the AIIB would discriminate against non-members in awarding future infrastructure contracts. Still, he added, there are other downsides to staying out of the new institution.
"It won't be a discriminatory regime, but there's subtle ways in which, when things are even, and there's two bids, and there's a little nudge somewhere," he said. "Then it's at that level that the nudge would not come the Canadian way if Canada stayed out."
Riann Meyer, Toronto-based head of trade finance at the Bank of China (Canada), said joining as a founding member might have given Ottawa an opportunity to help shape the organization's policies and mandate. But as long as Canada joins the AIIB eventually, it will benefit economically and politically from the new institution, he said.
"By being a member of the [AIIB], there's probably a whole slew of opportunities that can benefit Canadian companies and their expertise," he said.
However, some experts question whether Canada should commit to the new institution before it understands how it will function, citing concerns about China's record on human rights and freedom of speech. David Mulroney, a former diplomat who recently published a book on Canada-China relations, has suggested there are other ways Canada can build its influence in Asia beyond simply joining the AIIB.
The opposition NDP and the Liberals have both expressed support for the idea of joining the new bank, saying it will help boost economic ties between Canada and China.
Julie Nguyen, from the Canada-Vietnam Trade Council, said she sees both pros and cons in joining the new organization but still believes Ottawa should sign up.
"The booming of Asia cannot be missed," she said, "and issues such as labour and environmental standards, transparency and governance can be addressed as an ongoing effort to ensure that China, emerging and developed nations all adhere to the same standards."