Colin Hansen on Vancouver’s future as a yuan trading hub

B.C.’s former finance minister on budgets past and present—as well as establishing Vancouver as a Renminbi hub

From mending fences in his backyard to sorting out plumbing emergencies at his wife’s company, Colin Hansen makes no apologies for needing to decompress after 17 years in provincial politics. The former BC Liberal deputy premier and minister of finance and health took some downtime after resigning in 2012 before launching into his new role last summer as president of AdvantageBC, the not-for-profit that entices international business to the province.

“It’s like you’re living life on adrenaline, in an incredibly ‘bionic’ position, going a thousand miles an hour, then suddenly you’re standing still,” he says over a beet salad at the Fairmont Waterfront hotel’s ARC restaurant. “It’s not an easy transition.”

The respite would appear over, however, with work accelerating in recent months for the 62-year-old former MLA for Vancouver-Quilchena (he lives in Dunbar with his spouse, Laura, who owns Image Group Inc., a promotional products company the couple started in 1987). Hansen has become one of the most vociferous champions of establishing a Canadian trading hub for the yuan (also known as Renminbi, or RMB), the terms of which were broadly agreed to in November.

Hansen—a University of Victoria grad who worked as VP with the Asia Pacific Foundation of Canada before Image Group—says he’s “thrilled” by the deal for the hub, which will help trade between China and the Americas by lowering transaction costs and possibly enhancing Canadian exports to China by $32 billion over the next decade.

He explains that the hub is not a piece of real estate, more a “facilitation,” and that Canada, rather than a specific city, has been designated for RMB transactions “across North America.” While it was announced in November that Industrial & Commercial Bank of China (ICBC) in Toronto has been authorized by China’s central bank—the People’s Bank of China—as the first RMB clearing bank, Hansen is swift to point out that ICBC has locations across Canada. And Vancouver, he notes, is “Canada’s largest centre for trade settlement,” with both cultural understanding and a more favourable time zone for China.

“The private sector will dictate or decide where they can most effectively use that facilitation, whether that’s in Halifax, Montreal, Toronto, Calgary or Vancouver,” he says, adding that he expects the hub will take between six months and two years to establish.

Eventually, the conversation turns to politics and the big issue for the government he used to be part of: LNG. The former finance minister diplomatically suggests that the government is aiming for the “sweet spot” in terms of LNG taxes (from the once-talked-of 7 per cent to today’s 3.5) to woo companies.

“Getting the LNG industry off the ground is way more important than most British Columbians appreciate,” Hansen says. He adds that the only export market for natural gas in B.C. is currently the U.S., which has declared itself self-sufficient. “We have no publicly confirmed foreign buyer, so if we don’t develop the LNG industry, we will suffer economically in a big way.”

This being budget season, Hansen reflects on his own time poring over the numbers and vagaries of resource revenues. He points out how, in 2008, the B.C. government received more than $4 billion in petroleum and natural gas revenues—and how four years later, that number had dwindled to $440 million.

“I always dreaded the updates on the projections on natural gas royalty revenues because they were always bad news,” he says. “I may miss the excitement of the budget of 2005, but 2009 was the year from hell.”