Evidence of meeting #66 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was chinese.
A recording is available from Parliament.
9:10 a.m.
NDP
9:10 a.m.
Managing Director, Global Head of Foreign Exchange Products and China Capital Markets, BMO Capital Markets
It certainly is.
9:10 a.m.
Managing Director, Global Head of Foreign Exchange Products and China Capital Markets, BMO Capital Markets
Yes.
9:10 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
I have a question for Mr. Stewart with respect to policy.
I suppose this is a different trading regime of some sort with China. This is a different way for Canadian businesses to do business in China. Is it at all connected to the different trading relationship we have with the Chinese under the new FIPA, or are they completely separate trading policies? Is one connected to the other in any way?
9:10 a.m.
Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
I wouldn't quite describe them as being completely separate. Obviously, the foreign investment protection and promotion agreement affords the opportunity for people to invest in China, within the quota that's allowed, with greater protection than they would have had before. But they are not related in the sense that, as policy actions, they're independent. They were independent initiatives.
9:15 a.m.
NDP
9:15 a.m.
Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
In terms of the renminbi?
9:15 a.m.
Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
I think there are five: London, Luxembourg, Singapore, Frankfurt, and Canada.
9:15 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Did we go asking or did they come asking us? Who's the taker and who's the buyer here?
9:15 a.m.
Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
I would have characterized it as a joint interest, in that, I think this idea of clearing has been discussed for some time in the private sector as they've opened up, and as they've offered this centre to other marketplaces. But from an official's point of view, we just picked up on a private sector dialogue, and I would say that the Chinese were very receptive.
9:15 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Mr. Gavsie, I was just given a letter from my predecessor, as the opposition finance critic back in June 2014, seeking the government to move forward on some conversations and to provide some clarification on how this hub could happen. So, to my Conservative colleagues, we are not always anti-trade.
I have a question about the offshore pool that was discussed. Was it Mr. Chilcott? No I think it was Mr. Stewart.
You were talking about the difference between the onshore and the offshore trading pools. Is that correct?
9:15 a.m.
Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
That's right.
9:15 a.m.
NDP
9:15 a.m.
Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
Good question. I think it's both.
Maybe Mr. Gavsie—
9:15 a.m.
Managing Director, Global Head of Foreign Exchange Products and China Capital Markets, BMO Capital Markets
We would consider it offshore.
9:15 a.m.
Managing Director, Global Head of Foreign Exchange Products and China Capital Markets, BMO Capital Markets
That was the first. Correct.
9:15 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Since it's gone on, that's where it was tested. Is that correct?
9:15 a.m.
Managing Director, Global Head of Foreign Exchange Products and China Capital Markets, BMO Capital Markets
That's correct.
9:15 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
So that's part of the offshore calculations that you gave us.
I have a question with respect to how this is going to flow between Canadian and Chinese firms.
Mr. Zhu, yours is the largest bank in the world. Is that correct?
9:15 a.m.
MingXuan (William) Zhu
In terms of assets, yes, we are.
9:15 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Part of our conversation deals with the significant trade deficit that we have with China.
I wonder if Mr. Hall could comment. All of these things have consequences on certain industries, some more positively, some less so, depending on who's trading and doing what.
Do you expect this to have any impact on that trade deficit that has been steady and large with China for the last number of years?