The Chinese presence worries at the port of Quebec

In a context of tensions between Canada and China, the federal government fears the national security issues linked to the presence of a Hong Kong company at the heart of a $ 775 million expansion project at the port of Quebec, has learned The newspaper.

Ports Hutchison Canada and its partner, Canadian National (CN), entered into a contract in 2019 with the Port Authority of Quebec (APQ) for the construction and operation of a container terminal.

To start its activities, their joint venture, Terminal de containers Québec ltée, must however receive authorization from the federal government under the Investment Canada Act.

This procedure is mandatory for all foreign companies wishing to invest in Canada, as is the case with Ports Hutchison, a subsidiary of CK Hutchison. The analysis provides for a national security risk assessment.

According to our information, Ottawa is concerned about the presence of CK Hutchison in the port of Quebec expansion project.

The company’s headquarters are in Hong Kong, a territory over which China has recently tightened its grip.

“There is a concern when Chinese companies invest in Canada and the deal could be subject to review under the law for potential harm to national security,” a knowledgeable source told us. , who preferred not to be identified to protect the integrity of the process.

Despite our interview requests, neither CN nor CK Hutchison were able to say whether their joint venture has already initiated administrative procedures under the Investment Canada Act.

In Ottawa, the office of Industry Minister Navdeep Bains explained that the authorization process determines whether or not foreign investments are beneficial to the Canadian economy.

“These foreign investments are also subject to a rigorous multi-stage national security review process, led by our national security services,” said Councilor John Power.

As the procedure is confidential, it was impossible to learn anything about the planned container terminal in Quebec, a project called Laurentia.

In 2018, Bains blocked investment from a Chinese company that wanted to buy Canadian construction company Aecon.

He had justified this decision by the risks that this transaction could pose to the national security of Canada.

The APQ swept aside national security issues that could be linked to the partnership with CK Hutchison.

Frédéric Lagacé argued that the company is already a shareholder in the Canadian oil company Husky Energy.

“The Hutchison holding company is already very present in Canada in the field of energy, which is a sector with a strong national stake,” said the spokesperson.

The container terminal for the Laurentia project is expected to be operational by 2024. Under the contract signed by the QPA, CN and Hutchison will manage the facility for a period of 60 years.

In Quebec City, Mayor Régis Labeaume recently urged the federal government to commit financially to the Laurentia project, as he did for a port of Montreal expansion project.

According to our information, possible financial assistance from Ottawa will necessarily depend on the analysis of security issues.

“In Montreal, there was no company close to China in the project,” said our source.

CK Hutchison Company

• The head office : Hong Kong.
• Founder: Li Ka-shing, multibillionaire born in China, who resides in Hong Kong.
• Activity area : ports and related services, retail, infrastructure, energy and telecommunications.
• Revenue in 2019: C $ 75 billion.
• Number of employees : 300,000 in 50 countries.
• Presence in Canada: Investments in Husky Energy, Adrien Gagnon, Park N’Fly. The Li Ka Shing Foundation is incorporated in Canada.
• Hutchison Ports: 57 container ports in 27 countries. In 2019, the equivalent of 86 million containers passed through its facilities.

Laurentia project

• Promoters: Port of Quebec Administration (APQ) and Quebec Container Terminal Ltée, a company formed by Canadian National and Ports Hutchison Canada.
• Investments: The total budget is $ 775 million. APQ will invest $ 90 million, while Hutchison and CN will inject $ 505 million. Support of $ 180 million from the federal and Quebec governments is hoped for.
• Project: Construction of a container terminal after an expansion of 17 hectares, the equivalent of the sports ground (ring) of the Plains of Abraham or half of La Fontaine Park, in Montreal. The new area will be taken up on the river by an embankment in the Baie de Beauport, facing Île d’Orléans.
• Capacity: the equivalent of 700,000 containers per year.
• Duration: Hutchison and CN will operate the terminal for 60 years.