The Toronto Financial Services Alliance (TFSA) and AdvantageBC announced they would work together, with officials from the federal, Ontario and BC governments, and the financial industry, to promote Canada as a trading hub for the Chinese currency, the Renminbi (RMB).
In a joint statement Colin Hansen, President and CEO of AdvantageBC, and Janet Ecker, President and CEO of the Toronto Financial Services Alliance, said: “Canada has many advantages to offer China as a partner in their efforts to encourage the internationalization of the RMB, and as we seek to expand our business and trading relationships with them. Canada’s time zones, its well-developed financial infrastructure, capital markets and risk management expertise, the strong and growing economic relationship between the two countries, and a growing Chinese population in both Toronto and Vancouver provide many reasons for China to consider partnering with Canada and its financial and business community.”
“While Canada’s financial industry is headquartered in Toronto, much of the country’s Canada-China trade passes through Vancouver, making it critical for both jurisdictions to work collaboratively so that Canadian businesses are able to take full advantage of this initiative,” the two CEOs agreed.
Representatives of Canada’s business community have already expressed support for the initiative. “The establishment of Canada as a RMB centre will continue to raise our stature as a global financial centre and will facilitate increased trade and investment with China, thus benefitting the entire Canadian economy,” said Perrin Beatty, President & CEO of the Canadian Chamber of Commerce. Support has also been expressed from the Canadian Council of Chief Executives, the Canadian Manufacturers & Exporters and the Canada China Business Council.
Work is already well underway to support this initiative. For example, in 2013, BC issued a government bond denominated in RMB to become the first “dim sum” bond in Canada. It was quickly oversubscribed, largely by Asian investors. Also last year, Ontario’s TFSA established a working group with representation from thirteen national financial companies and three public sector observers (see list below). The working group is co-chaired by financial executives from BMO Financial Group, HSBC Bank Canada, Bank of China (Canada) and the Industrial and Commercial Bank of China (Canada).
A similar group is being established in British Columbia. TFSA and AdvantageBC have also established a steering committee to coordinate the work of the two groups.
– The Renminbi is currently the second-most used currency in global trade finance and is growing faster than any other currency in the world.
– Following the establishment of Hong Kong as the first RMB settlement centre in 2009, a small number of other centres have been authorized including Singapore, London, Frankfurt, and Luxembourg. None have yet been identified for the Americas.
– Trade between Canada and China has increased to $73 billion in 2013, an increase of 60% from 2009.
– Almost 1.5 million Canadians identify themselves as having Chinese ethnic origin.
Members of TFSA RMB Working Group:
Bank of Canada*
Bank of China (Canada)**
BMO Financial Group**
China Construction Bank
HSBC Bank Canada**
Industrial and Commercial Bank of China (Canada)**
National Bank of Canada
Ontario Financing Authority*
Sun Life Financial
TD Bank Group