Saudi investment freeze doesn't amount to much in Canada

TORONTO: The decision by Saudi Arabia to halt new investments and unload assets in Canada is likely to have limited impact.

Saudi assets in Canada are confined mainly to stakes in upscale hotel operators, some small stock holdings in companies like Canadian National Railway Co and grain facilities.

Most investments have been made by Saudi billionaire Prince Alwaleed Bin Talal through his Kingdom Holding Co, a Riyadh-based conglomerate with investments in hotels, real estate and equities. The company’s international hotel unit joined Bill Gates’s Cascade Investment and Canadian Isadore Sharp in a 2007 buyout of management company Four Seasons Hotels Inc, taking a 47.5% stake.

“The matter does not affect the day-to-day operations of Four Seasons,” spokeswoman Sarah Tuite said in an email. “It is business as usual as we continue to welcome guests to our hotels and resorts worldwide.”

Alwaleed’s influence in the kingdom has diminished after his arrest last year in an anti-corruption sweep by Crown Prince Mohammed bin Salman, who is seen to be sending a message to critics of his leadership with this latest reaction against Canada.

G3 Global Grain Group, a joint venture between state-owned Saudi Agriculture & Livestock Investment Co (SALIC) and US agri-food company Bunge Ltd, bought a 50.1% stake in the Canadian Wheat Board for C$250mil (US$192mil) in 2015. SALIC boosted its stake to 75% a year later. The partnership also holds an interest in a grain export terminal being built near Vancouver. On Tuesday, officials of the Winnipeg, Manitoba-based G3 said the company continues to buy and sell grain as usual.

Last year, Toronto-based technology startup QD Solar Inc received funding from a group that included Saudi’s King Abdullah University of Science and Technology and Netherlands-based venture capital firm DSM Venturing.

Saudi lender National Commercial Bank has an asset manager that held investments in 41 Canadian companies including Suncor Energy Inc, Canadian Natural Resources Ltd and Canadian Pacific Railway Ltd in its AlAhli North America Index Fund, according to May 2017 filings. CN Rail, at US$473,500, was the largest Canadian investment of the fund’s US$148.2mil portfolio.

Two-way trade between the two countries is tiny – around 0.4%t of Canada’s total trade in 2017. Canada exported C$1.37bil worth of goods to Saudi Arabia last year, mostly tanks and other armoured fighting vehicles and their parts, according to Statistics Canada. The country imported C$2.63bil in goods from Saudi Arabia over that period, mostly crude imported to the Irving Oil Ltd refinery in Saint John, New Brunswick.

Export Development Canada, the country’s trade financing agency, has exposure of about C$2bil to Saudi Arabia, and about 250 customers operating in the kingdom, Jessica Draker, an EDC spokeswoman, said in an email.

“Canada stands up firmly and respectfully for human rights,” Canadian Prime Minister Justin Trudeau told reporters onj Wednesday in Montreal, sidestepping questions on the impact of the Saudi moves.

Canadian direct investors in Saudi Arabia, meanwhile, include Barrick Gold Corp, the world’s second-biggest producer, and SNC-Lavalin Group Inc, Canada’s biggest engineering and construction company. — Bloomberg

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