Business groups in Toronto and Vancouver have formed a partnership to promote Canada as a centre for trading in Chinese currency for the Americas.
The Toronto Financial Services Alliance and AdvantageBC say they will work together, with the federal, Ontario and B.C. governments and the finance industry to promote Canada as a trading hub for the Chinese currency, the renminbi, or RMB.
In a joint statement Colin Hansen, president and CEO of AdvantageBC, and Janet Ecker, who holds the same positions at the Toronto alliance, said Canada "has many advantages to offer China as a partner in their efforts to encourage the internationalization of the RMB."
The move comes as annual trade between Canada and China has jumped 60 per cent in the past four years to $73 billion in 2013 – expanding the need for currency traders converting renminbi to loonies to settle trade debts and contracts.
Much of that trade is in minerals, food products, lumber and other materials, but Ontario and B.C. are also promoting more investment ties to China so the currency flow is expected to grow in both directions.
Toronto is the centre of Canada's banking industry and headquarters of the Big Five banks, but much of Canada-China trade passes through Vancouver and many of the 1.5 million Canadians who identify themselves as having Chinese ethnic origin live in the two cities.
"Canada's time zones, its well-developed financial infrastructure, capital markets and risk management expertise, the strong and growing economic relationship between the two countries, and a growing Chinese population in both Toronto and Vancouver provide many reasons for China to consider partnering with Canada and its financial and business community," the joint statement said.
Canada's business community also backs the currency centre initiative, which would create new jobs in the banking industry but also boost Canada's trade with the fastest-growing part of the global economy.
"The establishment of Canada as a RMB centre will continue to raise our stature as a global financial centre and will facilitate increased trade and investment with China, thus benefiting the entire Canadian economy," said Perrin Beatty, president and CEO of the Canadian Chamber of Commerce.
Work is already well underway to support the latest currency initiative. Last year, B.C. issued a  government bond denominated in RMB to become the first so-called "dim sum" bond in Canada. It was quickly bought largely by Asian investors.
Meanwhile, the Toronto alliance set up a working group of big financial companies and three public-sector observers – including the Ontario Financing Authority – to discuss the issue.
The renminbi is currently the second-most used currency in global trade finance and is growing faster than any other currency in the world.
Hong Kong became the first RMB settlement centre in 2009, but other smaller centres have been authorized, including Singapore, London, Frankfurt and Luxembourg. However, none have yet been identified for the Americas.

Toronto, Vancouver seek to be Chinese currency hubs for Americas

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