It has been revealed that Foreign Affairs Minister Francois-Phillippe Champagne has two registered residential mortgages with the Bank of China in London, a Chinese state-owned financial institution. Critics say that this opens him up to "personal financial vulnerability" during this time of unrest between Canada and China's relationship.
According to revelations in the Globe and Mail, Champagne bought an apartment in London in 2009 and then another one in 2013 while working as an executive for Amec Foster Wheeler PLC, an engineering and international construction company before he was first elected to the House of Commons in 2015.
Champagne claims he was unable to get a loan from any British banks because he only had a temporary work permit for the UK.
"At the time I purchased these apartments, the Bank of China (UK) Ltd. was one of a very limited number of banks providing residential mortgages for terms of more than 20 years to people residing in the UK on temporary worker visas," wrote Champagne in a statement to the Globe. "Neither mortgages nor any other liabilities have ever had any bearing on my functions as a public office holder."
At the time of their purchase, the mortgages were valued at $1.7 million with the current balance being $1.2 million. Champagne said he made the purchases known to the Office of the Ethics Commissioner, as well as other any other liabilities, which can be found on the office's website.
The two mortgages were secured for 30 years with the Bank of China, one for $683,000 and the other $1.1 million. The second property Champagne rents out, according to a source that wished to remain anonymous.
Canada and China's relationship has been rocky since the end of 2018 when Meng Wanzhou, an executive for Huawei Technologies was arrested on a U.S. extradition warrant. The Chinese government retaliated by jailing Canadians Michael Kovrig, a diplomat and Michael Spavor, a consultant. China also places restrictions on the import of canola seed, which was once a major Canadian export.
"I think it is very dangerous for a minister of the Crown to have personal financial dealings like that with state-owned enterprises from authoritarian countries," said Garnett Genuis, a Conservative MP and a member of the House of Commons Special Committee on Canada-China Relations. “Whatever the cause of the origin of those deals, it creates a certain degree of personal financial vulnerability to decisions which are ultimately directed by the government of China."
Despite being one of China's largest financial institutions, The Bank of China holds a "fairly minuscule percentage" of London's mortgage, according to Genius. Therefore Genius feels that the minister should look into other options. The Bank of China is the 53rd largest mortgage lender in the UK, holding only 0.1 percent of the country's outstanding mortgages.
Richard Fadden, a former director of the Canadian Security Intelligence Service who was national security adviser to Justin Trudeau and Stephen Harper, said the fact that the Bank of China mortgages are disclosed publicly means Mr. Champagne’s liabilities are known to the government and the Prime Minister. That means, he said, that Mr. Champagne has no hidden obligations.
"As long as it’s public, it’s not an issue of major concern because he acquired everything before he entered politics," said Richard Fadden, a former director of the Canadian Security Intelligence Service who was national security adviser to Justin Trudeau and Stephen Harper.
Fadden believes that Champagne has no hidden obligations however he said it would be best if the minister ended his business with the Bank of China. "From the perspective of perception, I would argue that it would be in his interest, and in Canada’s, to discharge the mortgages."
"I would say if it was me, I would be uncomfortable with the notion." said Jack Harris, an NDP foreign affairs critic, however he said that one cannot say for sure if Champagne could be influenced by China without being privy to the details of the mortgage, including the interest rate. "If you have a mortgage with a bank, you have the right to redeem that mortgage in accordance with its terms. Without knowing more, I can’t say whether he is vulnerable or not financially," said Harris.
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