BUSINESS

Ottawa’s auto rebate runs a little rough

BARBARA RIGHTON April 9 2007
BUSINESS

Ottawa’s auto rebate runs a little rough

BARBARA RIGHTON April 9 2007

LEAVING CANADA BEHIND

The Canadian diaspora in Asia: an opportunity slowly slipping away

BY ANDREA MANDEL-CAMPBELL • Admittedly, the nondescript headquarters of the world’s largest publicly listed Chinese fastfood chain isn’t easy to find, hidden deep in Hong Kong’s industrial hinterland. Still, it’s hard to miss its public face, Café de Coral, a franchise with 3 00 restaurants in Hong Kong and mainland China, as well as the Manchu Wok chain in North America.1 It should be an obvious target for the Canadian food industry, especially since the chairman is, in fact, a Canuck. But aside from buying the odd pig knuckle from Canadian hog producers, Michael Chan, a University of Manitoba grad and former Edmonton urban planner, says he hasn’t heard hide nor hair from his compatriots. “We would be a natural partner,” says the Hong Kong-born Chan. “But for some reason there are hardly any strong business ties with Canada.”

Café de Coral, when pronounced in Chinese, actually means “come together.” Yet it’s indicative of a yawning gulf between Canada and a potentially powerful diaspora that could be an ideal springboard into the booming Chinese market, but has instead become a byword for missed opportunity. While Ottawa has no idea how many Canadians live abroad, the Asia Pacific Foundation of Canada calculates there are 2.7 million overseas passport holders, equivalent to nine per cent of Canada’s population. Proportionally, it’s the world’s fourth largest diaspora—outpacing even China and India—and includes some of Asia’s wealthiest and most influential business people. Yet they are at best overlooked and at worst distrusted, a casualty of Canada’s perennial inability to globalize its economy.

Hong Kong, the mountainous archipelago known for its typhoons and tycoons, is a case in point. An estimated 200,000 to 300,000 Canadians make up the enclave’s single lar-

gest contingent of foreign passport holders and Canada’s largest diaspora outside the U.S. Their ranks read like a who’s who of Hong Kong’s rich and powerful: from Victor Li, scion of Li Ka-shing, one of the world’s richest men, to the family of fellow real estate and jewellery tycoon, Cheng Yu-Tung. In neighbouring Macau, the son of Stanley Ho, known as “the king of gambling” and the island’s richest man, is also a citizen, while Edmund Ho, Macau’s chief executive, is an alumnus of York University. “How many countries have such a proportion of citizens living overseas in such positions of influence?”

notes David Fung, a Hong Kong-born Vancouver entrepreneur. “Yet we don’t manage to use them to any significant extent.”

Take Café de Coral. The chain sources its food globally, importing eggs from the U.S. and beef from Australia, but the Canadian meat processors are not only uncompetitive, says Chan, but unwilling to tailor their product to Asian cuts. “I lived in Alberta, I know the industry,” he says. “But for some reason they don’t see the world as their market.” Companies from around the world have pitched joint food processing ventures to the chain, adds Chan, “but I’ve hardly ever heard of a Canadian company coming to us.”

And when the diaspora comes calling, the

reception is often cool. It’s no coincidence, say some, that Li Ka-shing sold his five per cent stake in CIBC, only to team up with Merrill Lynch months later to invest in the Bank of China. Son Victor, who headed up the family’s Canadian subsidiary, Husky Energy, tried to buy Air Canada, but the bankrupt airliner paired up with an American suitor instead. Now, Canada is looking to build the Pacific Gateway infrastructure project aimed at bulking up trade between Canada and China, yet the Lis’ Hutchison Whampoa, the world’s largest port operator, is absent from British Columbia. “You have

to wonder why Victor Li failed,” says Don DeVoretz, an immigration specialist at Simon Fraser University. “What blockages do we put in front of these people?”

To many diaspora Chinese the answer is pretty obvious: they are not considered true Canadians. It is in many ways a reflection of Canada’s deep ambivalence towards China, amplified recently by the Harper government’s showdown with Beijing over human rights and its plans to review investments by Chinese state-owned companies. “Canada is ambivalent at a very, very senior level,” says an individual familiar with the situation who has worked with both Liberal and Conservative governments. “This is not a populist ver-

sus establishment view. It’s a broad Canadian fault line—at every level and on all sides of the equation.”

For some, that ambivalence is, at least, partly earned. Many Hong Kong passport holders see Canada as at best a weigh station for picking up an education and language training, and at worst a “jail,” where they serve a three-year sentence in return for an extra passport and access to free health care. While wives live in McMansions around Vancouver, husbands working in Hong Kong claim poverty-level incomes in Canada to avoid the taxman. “They think Canadians are suckers,” says Patrick Chun, a Hong Kong-

born Vancouverite. “There’s no loyalty to Canada. Why in the world would we want to give people like that Canadian passports?” It’s a question that’s coming up more and more as immigrants, new and old, many of them from mainland China, are leaving to join the diaspora. Often it’s because they simply can’t find opportunities in Canada, but the question remains: isn’t there some way this exodus could be used to Canada’s advantage? After last summer’s Israel-Lebanon war, which cost Ottawa at least $94 million to evacuate 15,000 passport holders, Ottawa is reviewing Canada’s dual citizenship policy to find out. One thing is for sure, says Amy Wong, who moved to Vancouver at the age of 6, and

at 24 is back in Hong Kong working for U.S. media outlet Bloomberg: “Canada loses more than it gains.”

t’s hard to imagine why anybody wouldn’t welcome Alex Sun with open arms. The statuesque beauty from Shanghai first immigrated to Canada a decade ago. A former public relations executive with an M.B.A. from Wilfrid Laurier University and a stockbroker’s licence, she expected to get “big-time offers.” But other than overtures from New York, none materialized. “I worked on Bay Street for years and nobody ever returned my phone calls,” says Sun, 35, on a stopover in Shanghai between trips to New York and London. “It’s a very small club and they are not that accepting of outsiders.” She eventually ended up at Research Capital, a small Canadian brokerage. Chinese companies were con-

stantly filing through its Toronto office looking for financing in Canada, and Sun realized she could parlay her Chinese contacts into business for Bay Street. But China was too risky for the firm and Sun ended up leaving at the end of 2005. “They had something so fantastic right there, but they didn’t want to do anything about it,” she says. Sun struck out on her own, advising Chinese companies looking for overseas funding and institutional investors interested in breaking into the Chinese market. Now she’s consulting for a Chinese-based telecom company listed in the U.S., and recently helped broker the country’s first private equity deal. She has

yet to bring a deal to Toronto. “I have to tell the Chinese that London and New York are better markets for them,” Sun says. “There isn’t a great critical mass and the brokerage firms and banks (in Canada) are way too conservative.”

As Sun sips a fusion tea at one of Shanghai’s trendy cafés, she acknowledges that it’s U.S.sourced deals that are paying the bills. “Sadly, my business activity has nothing to do with Toronto. It’s a place to live.” And probably not for much longer. She’s working on some equity financing deals for Goldman Sachs in China and is scouting New York apartments. “Canadians are just content to do the same thing with the same people,” she says. “I don’t know what can motivate them. They are the most complacent people in the world.”

Richard Liu is all too familiar with Canadian complacency. It’s what finally drove him to abandon the country in 1999 despite storied family ties. Liu’s uncle was China’s first ambassador to Canada in the 1940s, and Liu kept up the tradition of promoting bilateral relations-engineering the first twinning of a Canadian and Chinese city—Victoria and Suzhou—in 1980, and organizing countless cultural events. Yet Liu, a Shanghai-born polyglot fluent in Spanish and Italian who immigrated to Canada in 1969, felt his efforts were never truly embraced. “I’m fed up with Canada,” he says with palpable frustration. “It just made me feel so useless—whatever I suggested, there was never any response.”

The final straw for Liu came after being named director of the Canadian Tourism Commission in Beijing in 2000. To supplement the federal agency’s shoestring budget, Liu shelled out more than $1,000 a month from his own pocket to wine and dine Chinese officials. But it paid off: within months he’d secured a promise from the head of China’s tourism bureau—a personal friend of Liu’s for 20 years—that Canada would be awarded “approved destination status,” opening the floodgates to millions of Chinese tourists. At the time, Australia was the only Western country with the mantle.

Liu went back to Ottawa with plans for a 200-person party to celebrate. The CTC balked and told him he could invite 50—a cheap gesture in a country where everything is done on an imperial scale. This “small thinking,” as Liu calls it, was reinforced by immigration officials at the embassy who argued that Canada could just wait for the U.S. to secure ADS and then siphon off some of their Chinese tourists for trips to Niagara Falls. Liu was amazed—Canada was choosing to pass up an opportunity to cash in on its unrivalled reputation in China. “I wanted Canada to eat the main course for once,” he says. “They wanted to eat leftovers.”

Liu left the CTC in 2004, but stayed on in Beijing to run a cultural consultancy. “I put a lot of effort to support Canada and in the end I came back here. Why? Because I can do more here and the Chinese appreciate what I do,” says Liu, whose clients come from

just about every country—except Canada. “Canadians like me never get business from Canada—Em Chinese and they don’t trust me,” he says. “Em doing very good business— with Americans, Europeans, Africans—but I should be doing this business with Canada.”

John and lete. well-toned Yuen He’d has rather the body crunch classic of a bones good college looks on atha rugby pitch than window-shop in a Hong Kong mall—a love of sports he attributes to his school years at Upper Canada College in Toronto, where he immigrated at the age of 6. But though Yuen spent his formative years in Canada, he says that if he were competing at the Olympics, he’s not sure which country he’d represent. “I want to say Canada, but apart from being educated and growing up there for a time, there’s not much of a connection,” says the 30-year-old. “I wouldn’t call it home.”

While Canadians observed with indifference as the wave of Hong Kong immigrants

that washed ashore in the late 1980s inevitably flowed back home a decade later, Yuen is indicative of a more worrisome trend: a second generation of Chinese immigrants with little affinity for the country that raised them. Instead, their Western education and

cross-cultural skills are building the global stature of Hong Kong and Shanghai, with no benefit to Canada. “The older generation is already a writeoff,” admits Amy Wong, whose seven

aunts and uncles have already come to Canada and gone. “The lingering question is the younger generation.”

Wong moved to a Vancouver suburb when she was 6, and unlike most of her Hong Kong friends who lived “in their own little world,” she actually had non-Asian friends. Still, the 24-year-old, who scrapes by in Hong Kong sharing a one-room apartment with her aunt, is coldly dismissive of Canada. “I really don’t have an identity,” says Wong, who returned to Hong Kong after graduating from Simon Fraser University two years ago. “I don’t say Em Canadian. It’s just a passport.”

Many Chinese immigrants say Canada failed to imbue a sense of national identity, and also failed to capitalize on their skills. John Yuen’s dad was the Asia Pacific regional manager for jewellery giant Cartier, yet he

couldn’t get a job interview when he came to Canada. He ended up introducing the Timberland franchise to Hong Kong, becoming the retailer’s sole agent there. “My father hates Canada,” says Yuen, quickly adding, “at the same time he’s very grateful. It’s a love-hate thing. But he hasn’t made any money in Canada.” That sense of alienation is now trickling down to the next generation, which sees their skills similarly unappreciated and their opportunities stunted.

Amy Wong speaks Mandarin, Cantonese, French and English. “I wouldn’t be able to find a job that would value those skills in Vancouver,” she says. “In fact, they’d screen you out because of it.” In Hong Kong, every language is a bonus, and foreign multinationals are constantly looking for overseas-educated returnees. “In Hong Kong, the opportunities are everywhere,” says Wong. “In Vancouver, you’re stuck and you’re very, very lucky if you get a few positions in the public sector.”

Yuen, who works at the Hong Kong office of U.S. Internet giant eBay, agrees. “Canada trained me, taught me almost everything I know about sports and education, yet I don’t think I owe it that much of a favour to say I’m Canadian. It feels like Canada hasn’t given me anything. At least Hong Kong gave me a career and chances to succeed.”

As a result, the cream of the crop leave Canada while Canadian companies continually bypass immigrant bridges into the Chinese market. Tim Hortons has turned down overtures from Chinese Canadians to move into the Middle Kingdom, where Starbucks enjoys unrivalled success. Canadian Tire, despite efforts by its Chinese employees, has also balked. “The Shanghai government was begging them to come,” said an individual familiar with the situation. “But they’re happier to sort of dominate the home market.” There are two Chinese-based forestry firms listed on the Toronto Stock Exchange, but neither has heard from Canada’s struggling forestry sector. “Eve been surprised we’ve never been approached,” concedes Allen Chan, chairman of Sino-Forest Corp., the largest foreign-owned plantation operator in China. The company has been courted by Chileans, Brazilians and Americans, says Chan, but “I don’t see any conscious effort [by Canadians] to identify the market.”

Not surprisingly, Canada is seen as a peace-

able place to retire or raise kids, but no beacon of business. It is left reaping many of the negatives of a wide-open immigration policy, and little reward. “I don’t see any benefits to having a large diaspora,” says SFU’s DeVoretz, who argues an ever-growing expat community devalues the Canadian passport and raises security concerns. Canada also faces a potentially “huge crisis” when elderly passport holders suddenly remember their citizenship, warns Robert Zweig, director of the Center on China’s Transnational Relations at the Hong Kong University of Science and Technology. “All these people have the right to come back to Canada,” says Zweig. “Do you know how much it costs to die?”

Canada needs to ensure better integration and more commitment from prospective newcomers, say experts. Suggestions include upping the three-year residency requirement and charging returnees health care premiums. Canada should also reform the tax system, which encourages the diaspora to cut ties with Canada, in favour of a U.S.-style tax on worldwide income. But most importantly, Canada needs to see its diaspora as a resource rather than a writeoff, says Zweig.

Rick Hui would seem to be a perfect case in point. He taps his fingers to a Beatles tune as he manoeuvres his silver BMW from his sumptuous restaurant in downtown Beijing to his 100-room Comfort Inn hotel, a few very long blocks away. He’s come a long way since graduating from hotel management at Toronto’s Ryerson University in 1979 and opening his first hotel in Hinton, Alta. With exclusive rights to the U.S. hotel franchise for northern China, Hui plans to open 25 Comfort Inns across the country by 2010.

A Hong Kong native who immigrated to Canada in 1970 at 19, Hui encourages his fellow Canadians to make the move to China, but it’s tough. Canadian chains like Delta and Sandman Hotels are nowhere to be seen, and while Hui brings over Canadian hospitality students to train at his hotel, it’s impossible to source wallpaper or furnishings from Canadian companies without a local Chinese presence. “If I know of a Canadian manufacturer, I would try to use them, but I don’t get a whole lot of connection,” says Hui, who just sold his Vancouver restaurant, the Pink Pearl. “It’s been very exciting,” he says with a smile. “I just wish I could see more Canadians doing the same or even bigger things.” M

Andrea Mandel-Campbell travelled to China in 2006 on a Media Fellowship from the Asia Pacific Foundation of Canada. She is also the author of theforthcoming book, Why Mexicans Don’t Drink Molson: Rescuing Canadian Business From the Suds of Global Obscurity.