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Letter From London

Money hates uncertainty and that’s a problem for the City of London

There has always been a certain swagger in London’s step. Now, the race is on to try to prevent the city from stumbling.

London, a hub of trading and money since Roman times, solidified its position as a global financial powerhouse over the last 30 years. Europe may have not always been comfortable with this, but London has effectively served as the continent’s financial service centre for decades.

With the United Kingdom now poised to leave the European Union, many are questioning whether London will survive as a financial hub. A number of cities, including Amsterdam, Frankfurt, Dublin and Luxembourg, are openly vying to replace it. Each of them can offer a single currency, a unified market and the free movement of capital, services, goods and highly trained people.

It’s no surprise that, following the 2016 Brexit vote, competitors started lining up to fill London’s shoes: In 2016, the city generated 30 per cent of the British government’s tax revenue and is responsible for thousands of the highest quality jobs in the country. Already, global banks are implementing plans to relocate almost 10,000 employees from London to Europe, with more to follow in the event of an unfavourable outcome.

Pressure is mounting on the U.K. government to negotiate a deal so that London-based banks, fund managers and traders are not locked out of the EU market. Currently, U.K. financial institutions conduct more than £1 trillion worth in transactions across national borders annually, but the arrangement that allows them the freedom to operate across borders (known as “passporting”) is likely to end in 2019. The government knows a huge number of financial contracts extend way beyond 2019, and financial institutions need clarity as soon as possible to ensure they remain legally compliant. The government is looking at negotiating a transition arrangement to allow the financial institutions time to restructure contracts. But the strength of London including this passporting freedom is economically critical. The government is acutely aware EU member states are looking to benefit themselves with any loss of confidence in London.

Until a transition arrangement or something more permanent is in place, London-based banks will continue to move jobs to the EU and the Eurozone.

Time is not on the side of financial services companies. They want a deal to allow passporting to continue, but, like everything else with respect to Brexit, this is up for negotiation. And the clock keeps ticking.


  • Canada has 10 per cent of the world’s forests, and forest occupies nearly 30 per cent of Canada’s land mass.
  • Canada has used over 10 different flag designs since 1497. The current design was adopted in 1965.
  • Canada is bigger than the entire European Union.
  • Canada’s coldest temperature was recorded as -63C in 1947 in the Yukon.
  • Canada produces over 70 per cent of the world’s pure maple syrup.
  • Canada is home to 18 World Heritage Sites.
  • The Hudson’s Bay Company is the oldest chartered trading company in the world.
  • Roughly 15 per cent of Canadians visit Tim Hortons every day.
  • Wood Buffalo National Park in Alberta is bigger than Switzerland.
  • St. Paul, Alberta, is home to the world’s first UFO landing pad.


Canada’s Odyssey, by political scientist Peter Russell, is a timely and important book in the year of Canada’s sesquicentennial. It offers an open and accessible path through a history of which too few Canadians are aware.

THE BOOK’S HISTORICAL narrative is key, and it serves to correct past narratives that view Canada’s founding as either a product of British imperial conquest or a compact of two founding nations. This book presents Canada as a product of incomplete conquests, which is why it remains a multinational and multicultural state. An excerpt from the review:

In his previous book, Constitutional Odyssey, Peter Russell focused on the mid 19th-century process of confederation via the British North America Act of 1867, but this focus obscured the importance of Canada’s pre-Confederation history. In Canada’s Odyssey, Russell begins a century before Confederation, and this leads him to a very different finding about both how Canada came to be and what it is today. He argues that, “the existence of nations or peoples preceding Britain’s imperial presence in Canada, and Britain’s decision not to attempt a complete conquest of these peoples, are the crucial facts about Canada’s founding.”

The argument that Canada is best understood as a multinational democracy (as opposed to a nation-state) is by no means a new one. There is a well-developed body of literature on this that spans law and the social sciences. In fact, the basic conceptual structure of the Westphalian nation-state (i.e., that there is a singular nation or people that is absolutely sovereign within their territory) has been contested over the last 250 years.

Canada’s Odyssey integrates various historical narratives and presents them in a manner that is engaging to a wide audience, both academic and popular. Russell’s writing is accessible, and when combined with the sheer scope and detail of the project, serves to reach and hold the attention of a diverse set of readers.

The book is divided into six parts: parts one and two focus on the 18th century and the transition into the 19th century; part three focuses on the process of Confederation that took place in 1867; parts four and five focus on the first and second half of the 20th century respectively; and the final part offers us a contextual perspective on the present and on possibilities for the future.


Of particular importance, Canada’s Odyssey serves as a clear response to the general confusion about the place of Indigenous peoples within the constitutional structure of Canada. Over the last 150 years, a vast colonial administration was created to dissolve Indigenous peoples as peoples and unify the Canadian body politic.

This was unilaterally imposed on Indigenous peoples who had extensive and well-defined treaty relationships with the British imperial crown that extended back to the Royal Proclamation of 1763 and the Treaty of Niagara in 1764. This project was driven, in large part, by the presumption that a state was defined as a single nation within a bounded territory. This has left a legacy of confusion regarding the nature of Indigenous peoples and the meaning of aboriginal rights and title that were recognized and affirmed in Section 35 of the Constitution Act, 1982.

As Russell helpfully points out, “multinational, multicultural Canada might offer more useful guidance for what lies ahead for the peoples of this planet than the tidy model of the single-nation sovereign state. Indeed, Canada might be more like a civilization than a nation-state. As an example of how diverse peoples can live together in freedom and peace, this loose, never settled alliance of peoples called Canada could replace empire and nation-state as the most attractive model in the twenty-first century.”

Joshua Nichols is a professor in the School for Public Administration at Dalhousie University and a fellow at the Centre for International Governance Innovation.

PETER H. RUSSELL  |  Historian, author 

Banking On Infrastructure


In the 2016 fall fiscal update, Finance Minister Bill Morneau announced the creation of the Canada Infrastructure Bank (CIB). The government has committed to investing $35 billion over 11 years in infrastructure projects across Canada. The objective is to attract four to five dollars in private-sector investment for every dollar of federal funding.


  • The CIB’s first board chair will be Janice Fukakusa, former chief financial officer of the Royal Bank of Canada.
  • Oversight of the CIB is shared between the departments of finance and infrastructure. It is also overseen by the Advisory Council on Economic Growth, chaired by Dominic Barton, global managing director of McKinsey and Company.
  • Glenn Campbell is the assistant deputy minister of the Canada Infrastructure Bank transition office. Most recently he was director, financial institutions in the Finance Department.
  • Tim Duncanson (on secondment from Onex) is senior adviser to the deputy minister of finance.
  • Jim Leech is special adviser to the Prime Minister on the Canada Infrastructure Bank. He was previously the president and CEO of the Ontario Teachers’ Pension Plan.
  • Michael Sabia, president and CEO of the Caisse de dépôt et placement du Québec, also sits on the Advisory Council on Economic Growth.


  • The bank will be headquartered in Toronto.


  • There is more than $186 billion invested in infrastructure projects across Canada. This has grown by more than $25 billion over the last year alone.
  • There are five main infrastructure themes:
    • Public transit;
    • Green infrastructure;
    • Social infrastructure;
    • Trade and transportation infrastructure; and
    • Rural and northern infrastructure.
  • The CIB replaces the former Conservative government’s 2008 Private-Public Partnership (3P) initiative.
  • The $5.5 billion REM (Réseau électrique métropolitain) train project in Montreal was slated to be the first CIB project, but the timing was off. Prime Minister Justin Trudeau announced on June 15, 2017 that Ottawa would match Quebec’s $1.283 billion investment in the project. The Caisse de dépôt, Quebec’s public-sector pension fund with $286 billion under management, is investing $3.3 billion in the REM.


  • The CIB is slated to be up and running by the end of 2017.


In the Liberals’ own election campaign words:
“We will establish the Canadian Infrastructure Bank to provide low-cost financing for new infrastructure projects.The federal government can use its strong credit rating and lending authority to make it easier and more affordable for municipalities to build the projects their communities need. Where a lack of capital represents a barrier to projects, the Canada Infrastructure Bank will provide loan guarantees and small capital contributions to provinces and municipalities to ensure that the projects are built.”

Planes,Trains & Automobiles

When it comes to Canada, necessity is the mother of nationhood

FROM THE VERY START, Canada has been defined physically and emotionally by large infrastructure projects. Often the subject of heated public debate, their disruptive impact on people and places has, at various points, forced us to examine our social, environmental and economic values and priorities. But whether funded by the private or public sector, railways, roads, runways and pipelines remain integral to our national and cultural identity.

The Trudeau government has committed to improving and expanding key infrastructure across the country. Cue the scrapping.

    The first Welland Canal connects lakes Ontario and Erie.
    The Rideau Canal opens connecting Ottawa to Lake Ontario and the St. Lawrence River. The canal is now a UNESCO World Heritage Site.
  • BELL 1880
    The Bell Telephone Company of Canada is incorporated by an Act of Parliament and authorized to construct a cross-country network of telephone lines.
    The last spike was driven into the Canadian Pacific Railway at Craigellachie, B.C., linking Canada physically from coast to coast.
    The Yonge Subway is put into operation by the Toronto Transit Commission. The line is Canada’s oldest and busiest underground passenger rail line.
    The Westcoast Pipeline begins delivering natural gas from north-eastern B.C. to Vancouver and beyond.
    The TransCanada Pipeline begins delivering natural gas from Alberta to Ontario. For many years, it was the longest pipeline in the world.
    Toronto International Airport begins operating in Malton, just outside Toronto. Renamed Lester B. Pearson International Airport in 1984, it is now the largest airport in Canada and 32nd largest in the world.
    The St. Lawrence Seaway, a series of locks and canals connecting the Atlantic Ocean to the Great Lakes, is completed.
    The Trans-Canada Highway officially opens, spanning over 8,000 kilometres from Victoria, B.C. to St. John’s, NL. It is one of the longest routes of its type in the world.
    The Société de transport de Montréal unveils Canada’s first rubber-wheeled underground rapid transit system, the Montreal Métro. The project was completed for Expo 67.
    The Red River Floodway goes into operation in Manitoba. The amount of earth excavated for the project was second only to that of the Panama Canal.
  • CN TOWER 1976
    The CN Tower is completed in Toronto. It held the record as the world’s tallest free-standing structure from 1975 to 2007.
    Olympic Stadium opens in Montreal. The stadium is the largest by seating capacity in Canada and was once the home of the now-defunct Montreal Expos baseball team.
  • VIA RAIL 1977
    Inspired by the 1971 creation of Amtrak in the United States, Pierre Elliott Trudeau’s government set up a new Crown corporation, VIA Rail Canada. Its mission was to provide an intercity passenger train service for Canadians at a lower cost with quality service.
    The first phase of the James Bay Hydroelectric Project in northern Quebec begins producing power.
  • THE SKYDOME 1989
    The SkyDome (now called the Rogers Centre) is completed in Toronto. The venue was noted for being the first stadium to have a fully retractable motorized roof.
    Construction concludes on the Confederation Bridge spanning Northumberland Strait between New Brunswick and Prince Edward Island. Almost 60 per cent of Islanders voted “Yes” to having this fixed link to the mainland.
    The Canada Line is completed on Vancouver’s SkyTrain expansion in time for the Vancouver 2010 Olympics. The SkyTrain is now the longest rapid transit system in Canada.
    The hydroelectric development of Lower Churchill Falls at Muskrat Falls and Gull Island continues.

Open Minds, Open Hearts, Open Wallets

Canada’s culture of inclusion is increasingly extended to foreign capital

CANADIANS value openness, something that is confirmed by hard numbers.

We are more welcoming of refugees than most other countries, according to Amnesty International’s Refugees Welcome Index. As well, Canada has the highest proportion of foreign-born residents in the G8 group of industrialized nations and a higher rate of population growth than any other G7 country, largely due to our immigration policies, Statistics Canada reports.

But does that openness extend to the direct ownership of Canadian companies and resources by “foreigners?” It has long been a touchy issue in a country that has historically relied on vast infusions of foreign capital to develop its natural resources and the infrastructure required to transform and transport them to market.

Almost every time there is a large transaction involving a foreign enterprise, Canadians express alarm about the erosion of national sovereignty through such investment. However, while the government of Stephen Harper blocked or restructured a number of deals in a bid to balance net benefit and national security, Justin Trudeau’s government has had a more open approach, maintaining higher review thresholds and re-examining previously blocked investments.

The extent to which Canadians understand this issue is significant at a time when the need for foreign capital is greater than ever. Navigator’s research team recently tried to assess how perception and reality align in this critical area.

In the Navigator survey, respondents were first given a brief definition of foreign direct investment (FDI) and then asked how familiar they were with the topic. Initially, 70 per cent said they were not familiar with the term. However, once they were provided with the definition, 79 per cent said they were not opposed to it, although 42 per cent expressed ambivalence about what they perceived as a loss of sovereign control.

When the economic impact of FDI was described to them, their responses changed.

Informed that on an annual basis FDI has contributed approximately 35 per cent to Canada’s gross domestic product (GDP) in recent years, more than one quarter of respondents (27 per cent) indicated stronger support.

Respondents continued, however, to express concern about the values and standards of companies investing in Canada and the effectiveness of government regulation in protecting the interests of the Canadian public. Although a majority agreed that foreign direct investment positively impacts economic growth (56 per cent) and creates jobs (59 per cent), 67 per cent also believe that the government must review its policies and practices to protect the country. A full 51 per cent expressed concern that values and standards in the areas of safety, labour practices, the environment and corporate social responsibility could be inferior to those of Canadian-controlled businesses.

More specifically, the issue of Chinese investment demonstrates the gap between perception and reality.

The media attention given to Chinese investors, especially in the real estate market, has reinforced a popular perception that China is a massive investor in the overall Canadian economy. In reality, China ranks eighth among Canada’s FDI contributors, accounting for only 2.59 per cent of total FDI in Canada.

When respondents in our study were asked to indicate which countries they believed were among the top five FDI contributors to Canada, 89 per cent stated incorrectly that China fell within the top five. To place this into context, the top five FDI contributors to Canada are the United States (47 per cent), Netherlands (11 per cent), Luxembourg (7 per cent), Switzerland (7 per cent) and the United Kingdom (5 per cent).

Taken together, these research findings show how important it is that policy-makers ensure facts are accurately represented and fears based on misperceptions are addressed. In the case of FDI, support increased when people knew the facts.

Further survey information available at: 

Navigator surveyed 1,000 Canadian residents. To ensure accurate representation of the Canadian population, the survey sample was designed to represent the population with respect to provincial and territorial distributions, age, gender and education. Data for this study were collected from September 7 to September 11, 2017.