Alberta, Thailand and Broader Asia: Strengthening our Common Future

Ron Hoffmann, former Canadian Ambassador to Thailand (2009-2012) and now Alberta’s Senior Representative to the Asia Pacific Region based in Hong Kong, was in Bangkok recently. He was accompanied by Rob Simmons, the Managing Director of Alberta’s Singapore Office. Voyageur caught up with Ron and Rob to delve deeper into what they are doing with Alberta in Asia.

Voyageur: Rob, Ron, your joint visit to Bangkok generated a lot of interest among the Canadian and Thai business communities. As former Canadian government executives, how did you end up working for Alberta?

Ron Hoffmann: Over 26 years as a Trade Commissioner and then Ambassador, it was clear to me that Alberta’s role in Canadian affairs, at home and abroad, had been progressively becoming larger. For most of my federal government career, Alberta led Canadian economic growth, and as Canada’s energy epicenter it was evident that what happened in Alberta mattered to all Canadians. So, when the Premier of Alberta at the time, Jim Prentice, personally asked me to consider serving as the province’s top person in Asia, it was a simple decision. As a Western Canadian who knows Alberta well, it just made the decision so much easier. Six months later, as you know, Albertans elected a new government, with Premier Rachel Notley at the helm, and I am honoured that she had sufficient confidence in the appointment to keep me on. It was actually under Premier Notley that I relocated to Hong Kong to serve as Alberta Senior Representative to Asia.

Rob Simmons: I have been working in the Southeast Asia Region out of Kuala Lumpur and Singapore for the past 15 years and more broadly covering Asian markets for many years before that. I came to this position from Export Development Canada (EDC) where I was Chief Representative for Southeast Asia and Oceania. With EDC I developed a broad network of business and government contacts across the region including in Thailand. I spent an earlier part of my career working with the Government of Alberta including working out of the Hong Kong Office so in a sense I am now rejoining the Provincial team. As is the case with Ron, I am honoured to have been selected as first Managing Director of the Alberta Southeast Asia Office based in Singapore.

Last year Alberta Minister of Economic Development and Trade, Deron Bilous (third from left), opened Alberta’s new Guangzhou office, making 9 of its 12 international offices in Asia.

Voyageur: How does Asia fit into Alberta’s priorities?

Ron Hoffmann: Alberta has looked hard at the sobering reality that well over 80 percent of our exports head south of our border at a time that the United States has become a more inward-looking and less predictable market. When we look at the world, it is clear that Asia holds the highest prospects for finding new consumers for our goods and services, and to increase foreign investment into the province. Finally – in Asia, the government sector has an outsized role to play helping our companies to connect and to navigate in unfamiliar cultures and business environments. We know we can’t afford to be everywhere, so we put limited government resources where we felt they can have the highest impact.

Voyageur: Has anything changed in Alberta’s approach to doing business when power was handed to a first-ever New Democratic government? How does Asian business perceive the NDP government?

Ron Hoffmann: The Rachel Notley government has sent a clear message to the Asian business community that Alberta is open for business. The current government has also taken key concrete steps to deepen commercial and policy links with Asia. To cite one example, the new Alberta government’s policies, combined with Premier Rachel Notley’s close personal involvement on the file, led to approval for much needed new energy pipelines that will serve Asian customers keen to diversify their energy supplies. This Alberta government has set up a new office to support foreign investment, called Invest Alberta, and we have new programming designed to share the costs and risks of export market development and to financially support buyers’ missions to Alberta. Importantly, Premier Notley and Ministers have actively engaged in Asia on a personal level. They have connected directly with business leaders and governments across key markets and signed some landmark cooperation agreements in fields such as the environment, climate change and trade and investment collaboration. Alberta has seen several major new investments from Asia over the last few months alone. So, in short, Alberta’s NDP government has been very active in promoting Alberta-Asia business and policy partnerships, and the results speak for themselves.

Premier Rachel Notley and Prime Minister Justin Trudeau meet in the Premier’s office in Edmonton February 3, 2016 during the Prime Minister’s visit to Alberta. (Chris Schwarz/Government of Alberta)

Voyageur: And Alberta for several years was the only province to have an international office dedicated to SE Asia. How does SE Asia fit into Alberta’s Asia thinking?

Rob Simmons: Yes, the Alberta Southeast Asia Office was established four years ago in recognition that this is one of the fastest growing regions in the world, comprised of open and business-friendly economies that can provide a gateway for Alberta into Asia. It is through markets like Thailand, Singapore and Malaysia where we believe that mid-sized Canadian exporters can most easily gain a foothold into the region first by tapping into the advantages which will be provided through the ASEAN Economic Community (AEC) and then leveraging local relationships to venture into the broader Asian region including tackling China and India.
Voyageur: Ron, Asia is a very large region. Where do you spend most of your time?

Ron Hoffmann: It won’t be a surprise to anyone that I spend much more of my time in and on China than anywhere else. The social and economic transformation now playing out in China is like nothing we have ever seen before, both in pace and scale. Within a generation, its population became the biggest urbanized middle class on the planet, and these consumers want diversity, quality, international lifestyles and global connectivity. Chinese consumers want the kind of things Alberta and Canada have in abundance.

But for Alberta, Asia is much more than China. The Chinese market is complex, and not for everyone. Alberta’s third biggest export market internationally is Japan. Korea is well positioned for growth. And India is a market that shows a lot of promise, especially for Alberta food exports, but also in areas such as education, technology, and energy. SE Asia is a region we want to dedicate much more attention to for the reasons Rob just mentioned. I will play my part in doing so.

Alberta’s iconic tourism is ideally suited for growing Asian tourism sector growth.

Voyageur: How does Thailand, specifically, fit into Alberta’s strategy for Asia?

Rob Simmons: Thailand is an important part of our broader Asian and Southeast Asia strategy both in terms of trade opportunities as well as investment attraction. With respect to trade, we recognize that the Thai economy is very resilient and thanks to forward-looking investment in infrastructure and new initiatives such as the EEC (Eastern Economic Corridor) development plan, Thailand will continue to be an important part of the global supply chain. This coupled with the fact that Thailand is a major consumer market and early adopter of new technologies including clean technologies and renewable energy translates into opportunities for Alberta companies across a variety of subsectors. Also, Thailand has been the leader in embracing the principles of the ASEAN Economic Community (AEC) and is particularly well positioned as a gateway for Alberta exporters into the rapidly growing economies in the Mekong region. So, we are actively encouraging Alberta companies to consider entering the Asian market through Thailand and to build strategic relationships in Thailand to further trade in the ASEAN region. The other real strength of the Thai economy, when compared to most other Southeast Asia markets, is the presence of several well-managed dynamic corporate groups and conglomerates with solid regional reach which are excellent potential partners for Canadian and Alberta business and a good potential to be strategic investors in Western Canada.

Voyageur: Speaking of the wider region, we hear much about China’s One Belt One Road initiative, that includes SE Asia. Should Canadians be paying attention?

Ron Hoffmann: China’s role in building and financing infrastructure across the wider Asian region has been happening for years, but OBOR puts a framework around it and it publicly commits deepened Chinese political support as well as a lot more capital. That matters. And so does the creation of the new Asian Infrastructure Investment Bank (AIIB). Developing more and better roads, rail, ports and airports should create new opportunities for most countries of the region, including less developed societies, lifting overall economic growth and the further expansion of Asia’s middle class. So, yes, Canadian companies need to take this phenomenon seriously because it is changing the global economic landscape. SE Asian societies also want to see western countries remaining engaged so that China’s growing role and influence doesn’t become overwhelming. The good news is that Albertan and other Canadian companies have distinct niche strengths to bring to the table. We need to help them be involved.

Voyageur: Let’s return for a moment to what’s happening in Alberta. You mentioned earlier that the province’s goal is to diversify. Is that working?

Ron Hoffmann: I referred earlier to Alberta’s strong and sustained economic fundamentals. These include our skilled population, which is the by some measures the youngest and highest educated in Canada. When we look at the full tax picture, we are among the lowest tax jurisdiction in Canada. We are now a leading technology and innovation center, and we have Canada’s 4th and 5th largest cities (Calgary and Edmonton, respectively), and both are well connected within North America and, increasingly, globally. Our Energy sector is driving down costs and expanding production. And while many think of energy when they think of Alberta, we also have notable strengths in the fields of education, tourism, food, forestry, entertainment, life sciences, the environmental and advanced technologies among others. Alberta is expanding its exports to the world, especially Asia, and we are attracting more investment from this region. Diversification is definitely happening, but we need to continue to work hard to build on this.

Voyageur: What does the Trump Presidency mean in terms of how Asians look at Canada and Alberta?

Ron Hoffmann: We are seeing more and more Asian companies looking to Alberta as a jurisdiction of choice for investment and for other kinds of strategic partnerships, and this is in part to their perceptions of a United States Administration less open to the world. It is a major opportunity. But we can’t afford to be complacent – most Asian enterprises don’t know Canada, or Alberta, as well as we think. We have to sell ourselves better, and we need to engage more.

Alberta and the national government of China signed an Energy & Climate Change Partnership Agreement in Beijing in April. China is looking to Alberta for ‘best practice’ lessons in tackling climate change.

Voyageur: Do you think that you will be back in Bangkok more often? How will you engage with Cancham in Thailand?

Rob Simmons: This visit has reinforced the value of engagement and the strong potential to do more business together. Ron and I are therefore jointly joining the CanCham, and are looking to engage more actively to foster closer ties between the broader Chamber membership and Alberta companies interested in the Thai market. We are also planning a number of trade missions to Thailand in partnership with the Commercial Section of the Canadian Embassy. In partnership with the CanCham as well as partners such as the Thai Board of Trade we hope to encourage Thai business delegations to visit Alberta and explore the investment and trade partnership opportunities first hand.