Skip to content

Playing with the Dragon III : Why the LPC’s historical alliance with China is one to watch amid current disputes


Everything Old Is New Again

It was back in 2012 when I first started following Canada-China relations, prompted by then CSIS director RIchard Faddens comments that CSIS was investigating foreign influence on Canadian politicians. The research I did lead to this post, which gives insight based on research and reports relevant to current events:

That post lead to more research on who designed Canada’s foreign policy with respect to China… and what I learned resulted in one of the most read posts on this site, to this date:


“Why is the Canadian government seemingly so eager to get into a financial bed with the Chinese government and Chinese corporations, when so many have rung alarm bells at the risk of doing so, without adequate safeguards to Canadian interests?

To understand why, one has to look beyond the Prime Minister, and into corporate Canada, to two organizations that have been deemed the architects of Canada’s China policy for far longer than Harper has been Prime Minister : the aptly named Power Corporation and the Canada Chinese Business Council.

The Power Corporation of Canada, under the direction of Andre and Paul Desmarais, has long been referred to ( and written about) as being ‘the’ power behind the upper echelon of Canadian politics, in particular the Privy Council and the Prime Ministers office.

In fact, the company has shared a long and lively history with several prime ministers of different political leanings, who have worked on staff, including Jean Chretien, Paul Martin and Brian Mulroney. Over many years, political and professional connections continued in addition to personal ones, with the marriage of Andre Desmarais to Jean Cretiens daughter, so entrenched are the families and business/politics.

( In an aside, last night I was reading a book by publisher Douglas Gibson, ‘Stories About Storytellers’ in which he remarks on the memoirs of both Paul Martin and Brian Mulroney, both of whom talk about their time with Power Corporation and the Desmarais family – a fascinating read)

But I digress. Time to take a look at the Canada China Business Council in more depth. Deemed a private, not for profit association, it’s sole purpose appears to be facilitating founding and member businesses in making as much money from trade and business with China as they possibly can, in the easiest and most unfettered manner. Read that as, free of trade and regulatory interference, if you wish.

Of note, is that in addition to Power Corporation, Export Development Canada and the Bank of Montreal, one of the founding members is CITIC, a state owned investment company of the Peoples Republic of China.

The board of directors of the China Canada Business Council is a veritable who’s who in Canadian politics and business, and boasts that “Their cumulative corporate experience in China and their personal and business networks among China and Canada’s most senior government and business leaders is unparalleled. They speak with insight and authority on Canada-China trade and investment issues and their voices are heard.”

Indeed, the 2010/2011 board included the Desmarais, Stockwell Day and a former ambassador to China…”


Why these older posts are relevant in the current tensions with China.

Why do those old posts matter now, you ask? Because one of the Liberal Party of Canada’s mandarins who I wrote about in Playing with the Dragon II – Jean Chrétien – recently came forth and suggested that Canada should intervene and cancel the extradition of  Huawei CFO Meng Wanzhou. A move immediately shut down by Canadas foreign Minister Chrystia Freeland, who said dropping charges would be a dangerous precedent to set.… indeed it would be.

Here is where it gets interesting. Follow closely and see if the dots connect for you too…

Excerpt from my first installment of Playing with the Dragon: 

“Sidewinder, for those of you who may have not have heard of the scandal, was a controversial report worked on and put together by a group of RCMP and CSIS officials in the late 1990’s, that was ultimately suppressed, denied as conjecture and theory rather than fact by the SIRC – the Security Intelligence Review Committe – the government agency that oversees CSIS.

All copies and supporting materials were ordered destroyed, however several copies were leaked to various media outlets, as well as  several writers across Canada. A full accounting of the scandal can be found here

From Operation Sidewinder – there are many,many other media reports, this is the most concise, comprehensive article:

“It was Sidewinder that sounded the first alarm bells that China is one of the greatest ongoing threats to Canada’s national security and Canadian industry.

But even after Sidewinder was side swiped by former Prime Minister Jean Chretien, intelligence proves that there is no doubt that an active Chinese Intelligence Service has been able to gain influence on vital sectors of the Canadian economy, including real estate, high technology and security. The bottom line is that this unprecedented influence gave China ongoing access to economic, political and some military intelligence in Canada.

Operation Sidewinder met with a fate that silenced ringing alarm bells. Officially entitled Chinese Intelligence Services and Triads Financial Links in Canada, it was buried. Following orders from persons unknown, CSIS watered down Sidewinder’s worrisome conclusions and replaced it with a revised document called, Echo.

CSIS officials maintain that they buried Sidewinder because it relied on nothing more than conspiracy theories—even though heralded the news in August 2003 that some 3,500 Chinese spy companies had been identified operating in Canada and the United States.

While CSIS claimed that conspiracy caused them to go mum, other intelligence sources are saying that political pressure forced CSIS to abandon the Sidewinder report.

Prominent among Sidewinder’s case studies was The Chinese, state-owned China International Trust Investment Company (CITIC), which already has a subsidiary up and running in Canada. CITIC has spent about $500 million to buy a Canadian pulp mill, a petrochemical company, vast real estate and hotels. At the time of the Sidewinder report. CITIC already had connections with one large Canadian corporation.

Add to that portfolio, the Alberta oil sands, ownership of which is currently being contemplated by a state-owned Chinese company and a Toronto-based mine company, Noranda Mines–a deal worth more than $7 billion.


Conspiracy theories were tossed out the window when U.S. Congressman Dana Rohrabacher revealed that the U.S. Bureau of Export Affairs, the U.S. Embassy in Beijing and the Rand Corporation had identified Li Ka-Shing and Hutchison Whampoa (Li’s primary business) as financing or serving as a conduit for Communist China’s military in order for them to acquire sensitive technologies and other equipment.”

To read what remains of the SideWinder report, you can access it in PDF format here:

Ties of Influence and Power 

It was intriguing enough to see Chretien seemingly run interference for China, but in another notable move, Brian Mulroney also recently urged the government to send Chretien and Power Corps Andre Desmarais to China, to win release of the two Canadians imprisoned by the Chinese govt after the Huawei CFO was arrested. Both have respect of the Chinese govt and that should be no surprise either… unless you didn’t know that  Andre Desmarais sat on the board of CITIC Pacific’s board of directors for years, as reported in the Panama Papers. 

See where this goes? There is far more than just trade concerns going on here, as large as those concerns are.

All of these longstanding alliances and connections are now very much at the forefront of this dispute with China as it moves to halt imports of Canadian meat,  in addition to several other Canadian imports banned in backlash of the Huawei extradition.

For years analysts have been hard pressed to understand why the Canadian government has been so lackadaisical with respect to the Chinese governments attempts to buy into and control certain sectors of the Canadian market, something that has come up with supply of telecommunications as well as resource purchases.

Now that Google has blocked Huawei, the issue is only going to heat up, particularly since Telus has a longstanding partnership with the company and has also come under fire for it. 

(*In an aside, I would be remiss to point out that the ‘shocking’ revelations of money laundering and Asian gang investment in Vancouver real estate reported on in the last couple of years here in BC,  were not surprising to anyone who read the Sidewinder report debunked by then Prime Minister Jean Chretien and his government via CSIS.  One can’t help but wonder if the government of the time had acted on the report instead of debunking it and attacking the whistleblowers who brought forth info on it, perhaps we wouldn’t be having a public inquiry into money laundering in casinos, real estate to wash dirty blood money in metro Vancouver now.…*)

This is why many are watching how the current government deals with this growing tension between Canada and China…senior members and former politicians are meddling where they should not meddle. Make no mistake, the Chinese government will not hesitate to bring Canada to its financial knees. But if Canada caves to internal influence from those connected to the federal Liberal party with longstanding connections in China, what does it mean for our autonomy as a country?

This is part of why I shake my head at the Kitimat LNG project that many politicians have claimed will do amazing things for the world as we navigate climate change. The ongoing argument is that supplying LNG to China will help get them off coal power, and into a cleaner form of energy. And to be fair, China has made some moves to clean up some of their industrial act, but is still heavily invested in coal power overall. What isn’t widely reported on, is that China is heavily investing in developing coal powered plants abroad in countries thirsty for cheap electricity.

Yes, that’s right. What is shut down in China, is being sold to less developed countries abroad and when financial institutions refuse to finance coal power, China finances it themselves.  Selling LNG to China isn’t saving anyone. It simply moves the location of where the pollution is happening. ( we won’t talk about this bit of corporate welfare and how it totally bashes all claims the project would use hydro electricity to power the plant )

But I digress. This impasse with China has been a long time coming, and while I empathize and share outrage with farmers being impacted, it needs to play out for the sake of our country as a whole. Canada has long taken China’s massive buying power for granted as a trade partner, at the cost of a creating a more diversified market that empowers Canadian suppliers instead of holding them hostage in situations like this.

It will be interesting to see how the current government proceeds, considering all the party elders with all these historical and longstanding connections to the Chinese government popping up in opposition to the extradition.  More than ever, Canada must assert itself as a strong nation who will not acquiesce to the demands of China, every time the dragon whips it tail.



  1. Your article is one of the reasons blogs are so important. Too bad all of it isn’t being published in the national local papers. Canadians need to know this information.

    It is not smart for any country to put all their eggs in one basket and that is what so many countries are doing right now, especially with the new “silk road” initiative by China. China doesn’t have to go to war with anyone to get what it wants, it simply buys what it wants and puts countries and corporations into a position it will cause financial harm to a national economy if they say NO to China.

    We have to look no further than the Meng case. China’s behaviour is that of a bully and an uncivilized nation. These “older” politicians need to butt out. China and its citizens need to understand we are a sovereign nation and we will follow our own laws and not what China wants. Canadians need to understand if you go to China, you may never return and decide what you want to do with that information.

    Canada needs to send a message to China, we may be smaller, but we are tough and we will get through this. We will find new trade partners. We ought never to destroy our country’s environment for the economic benefit of another nation. It is simply stupid to change a country’s economy to benefit another’s. they can simply use it to clobber you over the head. We saw it when China decided not to buy American soyabeans. we’re seeing it with China’s refusal to now purchase Canadian pork. We don’t even know if its Canadian pork. Nothing would surprise me if it is discovered this is simply a ploy by a China supporter or China to put Canadian farmers in an economic bind. its how they play the game.


  2. When profit at the high price of degrading Canadian security and sovereignty becomes the corporate elites and their government lapdogs policy, then the lines become blurred, and Canadians should become deeply concerned about what kind of people are running the country. I mean,really deeply concerned. Trading and selling out ones own country to the enemies of ones country for profit like the dictatorship of China reminds me only one word for these types. Traitors. At least that’s what i conclude from my strong upbringing as a Canadian, and i’m proud of it and proud to say it. These dirty people do not give a dam about you and me and don’t hold any allegiance to what flies on top of the pole. Mine is to that piece of silk cloth with the Maple leaf and what it stands for and who fought for it, and died for it, and why. Even despite all the imperfections. Many those corporate elitist ass wipes don’t give a darn about that, nor do their boot wipers like Trudeau and his pathetic little liars club. The SNC gong show should have proved beyond a doubt the crossroads we’re at for Canada and government dealings with corporate crime, corruption and tyrannical dictatorships like China and others. They jump in the sack with.


  3. One may ask if not the Trudeau government next time round, then who would best suit that role as a strong government for Canada. I don’t know personally. It’s always a crap shoot. What i do know is that we must be careful as a freedom loving people that we don’t fall for politicians who exploit the political turmoil, public frustrations and anger to only end up with a extreme right wing government with notes of a theocratic bent in some cases. No thanks. We don’t want to hand off a weakling government to an overly authoritarian style of government. Where’s the balance. Is there one. So where do we go from here come election time. My only answer is the people are the keepers and protectors of their house in the end. At least that’s what it’s supposed to be.


  4. Another timely, thought provoking article.

    China and its century and a half of sulking at the “Loss of Face” when foreign devils forced them to open their borders to trade at gunpoint .
    And the Opium Wars that ensued.
    One wonders if the Fentynal crisis is their pay back.
    The “Great Wail of China” is their demand for respect.
    Unfortunately the Chinese still dont realize.
    You dont demand respect.
    You earn it.

    I’m not too concerned with China’s blustering beef and pork ban.
    What with the Swine Flu devastating up to 90% of their pigs.
    Canada needs to play hard ball here instead of Trudeau kowtowing to Xi.
    If the Canadians kidnapped and held in China arent released in the next few months.
    Meng should be rotting in a Canadian jail while waiting for her (typically Canadian, hand wringing, endless sop of legal appeals) years long extradition hearing drags out… instead of her “imprisonment” in her mansion where she gets to decide which Prada bag she’ll carry to Court.

    Or, better yet, immediately ship her to the US where she can learn Spanish with all the other illegal aliens awaiting trial.

    Once again we see big money influencing politics .
    The Desmarais family should be banned from any and all contact with any political party.

    One wonders if the Chinese dominate Canada in 25 years if the Desmarais family will be standing on the podium with their hands over their hearts ( and chequebooks) next to the Conquerors singing the Chinese national anthem…

    May they all rot.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: