Canada on 'thin ice' with largest trading partners: Peter MacKay
Former foreign affairs minister Peter MacKay is warning that diplomatic tensions between Canada and some of its biggest trading partners could have a “dire” impact on the Canadian economy.
MacKay was referring to the dispute between Canada and Saudi Arabia, and the country’s mounting tensions with China following the arrest of Huawei Technologies Co. CFO Meng Wanzhou in December.
“Some of our biggest trading partners now, we are on very thin ice [with],” said MacKay, now a partner at Baker McKenzie, in an interview with BNN Bloomberg Monday. “That could have dire consequences for the Canadian economy.”
MacKay said he isn’t surprised about how diplomatic tensions are affecting companies like SNC-Lavalin Group Inc. The Montreal-based engineering company said Monday it wrote down the value of its energy unit by $1.24 billion, citing the fallout of souring relations between Canada and Saudi Arabia.
“I think we are going to see more of that quite frankly,” MacKay said.
“In terms of doing business in Saudi Arabia, [SNC] better have some very good representatives on the ground who are translating for them the importance of their business relations,” he added. “And in some ways, distancing themselves from the tensions that have been created by their own government and saying this is a business-to-business relationship.”
MacKay also said he is worried about recent comments made by Canada’s former ambassador to China, John McCallum, regarding the Huawei case, which caused controversy partly because of their contrast to the federal government’s messaging.
The comments ultimately led Prime Minister Justin Trudeau to request and accept McCallum’s resignation on Friday night, at a time when relations between the two countries are already on ice with multiple Canadians currently detained in China and Meng under house arrest in Vancouver.
“There’s no doubt in my mind that anything with a Canadian flag in Saudi Arabia, and potentially now in China, is going to be treated differently than it was prior to these tensions erupting,” MacKay said.
“We have to do everything in our power now to try to lower the temperature and restore some normal relations [not only] on the diplomatic front but also for our economy.”