Oh, Canada?

Author:Price, John
Position:THE CONTRARIAN
 
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When the upstart Canadian Council for the Americas hosted its first gala dinner in 2011 in Toronto, the event sold out in a few weeks, with over 400 people paying $500 per seat. Attending Canadian media was astounded. Canadian business was not.

The relationship between Canada and Latin America & the Caribbean (LAC) dates back close to 300 years when Halifax ships brought cod and timber to Kingston in return for sugar and ram. Since 2005, however, the investment ties between the two have soared, propelled overwhelmingly by the mining industry. In most sectors, Canadian companies struggle to reach the global top 25 list. But in banking and mining, Canada is home to three and four entries on the top 25 lists respectively. Canadian miners have led the recent charge into Latin America, including some little-known mining jurisdictions: Ecuador, Guatemala, Dominican Republic, Argentina, Colombia, Panama and Suriname.

Canadian miners operate close to 80 mines in Latin America, most of which are located in Chile, Peru, Mexico, Brazil and Argentina. Leading the charge into the region are some of Canada's largest miners: Bar rick Gold, Yamana Gold, Goldcorp, Teck, Kinross Gold, Pan American Silver and Sherritt International. Combined, Canadian firms extract $18.7 billion per year from Latin American mines, and employ an estimated 150,000 people in the region.

By 2010, Canadian companies had invested close to $54 billion in the region, placing Canada fifth in the ranks, well ahead of China, which has captured most of the headlines in LAC over the last five years as the new investor on the block. Chinese investment stock in 2010 reached approximately $25 billion, ranking the country eighth on the same list. From 2005-2010, 20 percent of all outbound foreign direct investment from Canada went to LAC, more than all investments in Asia by Canadian firms.

The second leading sector of Canadian investment in LAC is financial services. Toronto-headquartered Scotiabank is now estimated to be the eighth largest bank in Latin America with significant market positions in Mexico, Peru, Colombia, Mexico, Trinidad & Tobago, Jamaica, and the Dominican Republic. A lesser known, but equally historic investor, is Brookfield, once known as Brascan, who built some of the first street lights in Brazil in the late 19th century. Today, Brookfield has over $18 billion of assets under management in South America.

Between Quebec, Ontario and Mexico flows the third great tranche...

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