Is Canada ready for the next threat from China?

Having already demonstrated its willingness to inflict pain on Canada where it hurts, we must anticipate more of the same from China in the context of heightened global competition and potential confrontation. 

The Trudeau government has taken extraordinary action to deal with a (hopefully) once-in-a -century global pandemic. 

With Budget 2021, it has laid out an ambitious and very expensive agenda designed to simultaneously engineer a robust post-pandemic recovery and set in motion an historic effort to tackle climate change by way of an epochal shift towards green energy. 

And now, all public denials notwithstanding, the Liberals appear to be setting the stage for an election that they feel affords them a solid chance of regaining the majority they lost in 2019.

But trouble never sleeps. And the next global challenge has already arrived.

That challenge is Canada’s vulnerability to economic disruption as the G7 and like-minded Asia-Pacific nations begin to tackle the political, security and economic threats posed by China’s growing power and willingness to use it to punish countries whose behaviour it deems to be disagreeable.

Canada has already had a taste of this. The unacceptable hostage diplomacy China has inflicted on Michael Spavor and Michael Kovrig and their families in retaliation for Canada's arrest of Huawei executive Meng Wanzhou is the best known example. Canadian canola farmers have also been hit with the ban on Canadian canola imports by China, which has been linked to the same issue. 

The vulnerability of Canada to Chinese supply chains was already made clear during the pandemic as we experienced shortages of key health equipment that was being made largely in China. But this is a mere taste for what may be coming. 

At the recent G7 in the United Kingdom, the world’s richest democracies as well as India, Australia, South Korea, and South Africa, all signalled an effort to challenge China on human rights, its prominence in global supply chains, and security in Asia. China reacted by warning that “[t]he days when global decisions were dictated by a small group of countries are long gone.” 

Having already demonstrated its willingness to inflict pain on Canada where it hurts, we must anticipate more of the same from China in the context of heightened global competition and potential confrontation. 

For China, Canada presents an inviting target for trade retaliation. It is now close to eclipsing the European Union as Canada's second largest trading partner, with total trade in 2020 pegged at around $80 billion. 

We rely on China for, among other key products, consumer goods, textiles and machinery. And we could easily end up as collateral damage in a larger China-U.S. struggle. 

While Ottawa’s power to fend off this threat is limited, it is not without allies or retaliatory tools. The question for Canadians remains: are policy makers doing the work they need to get ready for the threat? There is no obvious evidence of this so far.