Imagine a world where Canada isn’t so reliant on the United States for trade. A world where Canadian businesses have access to billions of dollars in investment and new markets are opened up. Well, Prime Minister Mark Carney is on a mission to make that vision a reality. His recent trip to the United Arab Emirates (UAE) signals a bold move to diversify Canada’s economic partnerships. But here’s where it gets controversial… is cozying up to the UAE worth it, considering their human rights record? Let’s dive into the details.
During his visit, Carney engaged with key figures in the UAE’s investment landscape, pitching Canada as a prime destination for foreign capital. The UAE, a financial powerhouse in the Gulf region, boasts trillions of dollars ready to be deployed. Specifically, he met with top executives from state-owned sovereign wealth funds like Mubadala Investment Company (managing a staggering US$330 billion) and the Abu Dhabi Investment Council (ADIC), as well as leadership from MGX Fund Management Limited, a fund specializing in artificial intelligence. These funds represent a massive opportunity for Canada to attract investment, particularly in sectors like energy, infrastructure, artificial intelligence, and natural resources.
But it wasn’t just about attracting investment. Carney also kicked off negotiations for a comprehensive free-trade agreement with the UAE. This agreement, officially titled a Canada-UAE Comprehensive Economic Partnership Agreement, aims to slash tariffs, dismantle trade barriers, and broaden market access for Canadian exporters. Think of it as opening a superhighway for Canadian goods and services to reach the UAE market. And this is the part most people miss… a free trade agreement isn’t just about trade; it’s about building long-term economic and political relationships.
To further solidify the groundwork for increased investment, Carney and UAE President Sheik Mohamed bin Zayed Al Nahyan signed a Foreign Investment Promotion and Protection Agreement (FIPA). A FIPA acts as a safeguard for foreign investors, creating a more stable and predictable environment. It’s like an insurance policy, ensuring that investments are protected from unfair treatment or expropriation without due process and fair compensation. Canada has already signed nearly 40 such agreements globally, recognizing their importance in fostering international investment.
Carney’s overarching goal is ambitious: to double Canada’s non-U.S. exports within a decade, translating to a $300 billion increase in annual overseas sales. He also aims to attract $500 billion in new private-sector investment over the next five years. Achieving these targets requires strategic partnerships, and the UAE is clearly a priority.
Adding historical context, Carney’s visit marked the first time a sitting Canadian prime minister had visited the UAE since 1983. Contrast this with the frequent visits of leaders like French President Emmanuel Macron, and it highlights the renewed emphasis Canada is placing on this relationship. As former Quebec premier Jean Charest, co-chair of the Canada-UAE Business Council, noted, the relationship between the two countries is currently at its “best it’s ever been.”
In 2024, the UAE was Canada’s 16th-largest export market, with $3.4 billion in two-way trade. Furthermore, foreign direct investment in Canada from the UAE totaled $8.8 billion. These figures demonstrate the existing economic ties, but also hint at the potential for significant growth.
The UAE’s sovereign wealth funds, along with those in Saudi Arabia, Qatar, and Kuwait, represent a vast pool of untapped investment capital for Canada. These funds are particularly interested in investing in Canadian mining, energy, infrastructure, and artificial intelligence technology, among other sectors. Sheik Tahnoon bin Zayed Al Nahyan, the UAE’s national security advisor and a key figure in the country’s investment strategy, hosted Carney for dinner. Sheik Tahnoon chairs the Abu Dhabi Investment Authority (ADIA), the UAE’s largest sovereign wealth fund with US$1.1 trillion in assets, and Abu Dhabi Development Holding Company (ADQ), a rapidly growing fund with a US$251 billion portfolio.
Mubadala, the UAE’s second-largest sovereign wealth fund, already has existing investments in Canada, including a $4.7 billion deal to take Toronto-based wealth manager CI Financial Corp. private. Mubadala also owns ADIC and is a major backer of MGX, the state-owned AI and technology investment company that is partnering with Microsoft Corp. and BlackRock Inc. to invest US$30 billion in global AI infrastructure.
The Canadian Prime Minister’s Office has stated that a trade deal with the UAE would support the expansion of Canadian businesses in sectors such as engineering, construction, aerospace, agri-food, and seafood. The goal is also to attract billions of dollars of UAE investment into major projects like Canadian ports, mines, liquefied natural gas facilities, data centers, and critical minerals projects.
However, some critics argue that prioritizing economic gains over human rights concerns sends the wrong message. Is Canada willing to overlook the UAE’s human rights record in pursuit of economic opportunities? How do we balance our economic ambitions with our values? What sectors should Canada welcome investment from the UAE into? Should there be any limitations? I’d love to hear your thoughts in the comments below. Do you believe this is a strategic move for Canada, or are we sacrificing our principles for profit?