Canada has told the United Arab Emirates that it is not ready to move forward on $70 billion in investments from the UAE into the Canadian economy, as the major projects office established in August has not approved any shovel-ready projects.
According to a report in Tuesday's Financial Times, this lack of ready-to-go projects is holding back Prime Minister Mark Carney's plan to double trade with non-U.S. partners in a decade. A Canadian official granted anonymity in the story said: "The PM keeps talking about the $70 billion UAE commitment he secured on his first visit (to Abu Dhabi) in November. None of that has been deployed."
Carney's UAE Deal and Its Stalled Progress
Carney's deal is with UAE President His Highness Sheikh Mohamed bin Zayed Al Nahyan, which the PM has announced at least four times. It is part of a new Canada-UAE Foreign Investment Promotion and Protection Agreement, with a Comprehensive Economic Partnership Agreement now being negotiated. The $70 billion figure was touted as a major achievement during Carney's first visit to Abu Dhabi in November.
Former Quebec premier Jean Charest, co-chair of the UAE-Canada Business Council, told the Financial Times that while the major projects office is "only one bucket of potential projects" for investors, it "gave them the only answer they could give them, at this point we're not ready. But that is the same answer for everyone."
UAE's Response and Broader Economic Challenges
The UAE does not seem particularly phased by the delay. One of its officials told the Financial Times that these deals normally take time to develop and that the UAE will continue to work on deals with Canada, describing their relationship as "one of the most important partnerships globally."
But this episode demonstrates that it is one thing to announce new investment agreements with foreign countries and quite another to deliver them. Carney claims he will catalyze $1 trillion in new investments in Canada in five years and double non-U.S. exports in 10. However, numerous federal and provincial laws and regulations hamper Canada's ability to build infrastructure "at speeds not seen in generations," as the prime minister likes to put it.
The difficulty in turning around the economy after a decade of neglect by the Justin Trudeau Liberals should surprise no one, as it is like trying to turn around the Titanic before it hit the iceberg. Potential investments from the UAE sit on the sidelines while Canada's major projects office struggles to approve projects.
