John Manley spent 16 years in Canadian federal politics, serving in former Prime Minister Jean Chrétien’s 26th Ministry from 1993-2003 as a cabinet minister for industry, foreign affairs and finance, as well as deputy prime minister. He is currently president and CEO of the Business Council of Canada, representing CEOs and entrepreneurs of 150 leading Canadian companies.

“Canada’s known brand throughout the world is that it’s a friendly, peaceful country,” Manley told CAIFU Friday, April 21. “Canada has a pristine environment and scenic landscapes. The country has everything the world needs – clean air, water and energy, as well as abundant agriculture from the ground and sea.”

Canada is a small country with more than 35 million people, but has an open economy that’s connected with the world, Manley continued. According to the World Bank, Canada’s gross domestic product (GDP) was worth $1.5 billion USD in 2015, as the country’s GDP value represents 2.5 percent of the world economy.

Canada needs to look beyond the world’s largest economy, the United States, and diversify trade relations with Asia, Europe and Latin America, Manley said. A broad and ambitious trade strategy is essential to give Canadian exporters access to new markets and position Canada as a global hub for trade and investment.

“International businesses are looking stability, freedom from corruption and legal reliability. Canada has good marks,” he said. “As a place to do business, Canada has many advantages, including abundant resources, stable and efficient public institutions, and a skilled and diverse workforce.”

It’s time for Canada to take the next step and engage with the rest of the world even though it’s in close proximity to the United States, Manley advised. “Canadians could be a little complacent, and may take prosperity and social harmony for granted,” he added. “The world is moving fast, and if Canada doesn’t keep up, it risks being left behind. Canadians must keep working at [keeping its freedoms and liberties] because its vital national interests are at stake.”

A New Era of Canada-China Relations

The Canada-China economic relationship will evolve over the next decade, Manley noted, as the world’s second-largest economy will present new opportunities for increased trade in goods and services, and investment. “With the evident importance of China over the 21st century, it’s important for Canadians to build this relationship with the Chinese,” Manley said.

Canada’s trade relations with the United States are under threat as of April 2017 because of a substantial increase in tariffs on softwood lumber to 24 percent, while Canadian dairy is also a target.

There is a significant market opportunity for softwood lumber in China, the second-largest importer of the Canadian wood behind the United States. British Columbia has emerged as a leading supplier of softwood lumber to China with 43 percent of total softwood lumber imports representing over $1.4 billion CAD in 2014, according to Trade and Invest British Columbia. China currently accounts for 26.1 percent of the province’s total volume of exports of softwood lumber.

“I want to make sure that our Chinese friends understand that softwood lumber is a reliable, eco-friendly source of building new houses in China,” Canadian International Trade Minister François-Philippe Champagne told Xinhua in an interview Thursday, April 20. “There are a lot of people in the middle class [in China] that are looking to move to cities, and my message to them is that wood is in vogue in Canada.”

Champagne explained he hopes Canadian softwood lumber can be part of China’s toolkit to support the country's climate-change strategy and promote environmentally friendly construction.

Prime Minister Justin Trudeau can also enhance the Canada-China economic relationship, Manley explained. “The Chinese value strategic partnerships between governments, including high-level meetings, professional exchanges and joint ventures,” he added. “More formalized discussions will lead to more access to the Chinese market. Then, the Canadian government must show a commitment to the relationship. This will result in private relationships in business to blossom.”

A second round of exploratory talks on a proposed Canada-China Free Trade Agreement (FTA) happened at the Global Affairs Canada office in Ottawa from Monday, April 24-Friday, April 28, 2017. A Canada-China bilateral free-trade agreement would boost Canadian exports in a wide range of industries, spur investment across the country and create thousands of new jobs, Manley has been quoted as saying.

According to the Chinese Ministry of Foreign Affairs in April 2017, Trudeau expressed great importance in developing friendly cooperation with China, and the FTA exploratory discussions mark that bilateral cooperation is on the right track. Chinese Premier Li Keqiang pointed out Canada and China stand together to expand bilateral trade and investment exchanges, and will cooperate in tackling climate change and clean energy.

“A written free-trade agreement is the first step, as this will increase significant trade flows between Canada and China,” Manley explained. “Trade leads to investment. Canada has lagged on this in the past but now is making progress. Then, the Canada-China relationship should deepen.”

China and Canada could help each other to achieve new types of economic growth as they develop their economic relationship, Manley continued. Currently, there’s collaboration between the two countries in education, health care, renewable energy and traditional Chinese remedies.

“Since China opened its economy in 1982, we’ve witnessed an incredible story,” Manley stated. “There’s tremendous growth potential in China. The private sector is growing quickly, while its entrepreneurial spirit is evident.”

Canada’s Place in the Global Economy

Manley said he views Canada’s place in the global economy as a pioneer in natural resources, and added the country has the potential to lead in the services industry globally. “Canada’s family business is in natural resources, so let’s build on that,” he added. “…Let’s grow and expand in energy, renewables, and mining, oil and gas extraction.”

In the longer term, Canada should export more knowledge-based goods and services, as the country’s strengths lie in its talent and educational output, he concluded. “Let’s strive to become world leaders in education, financial services, health care, telecommunications and the digital economy.”