Liberals say no need for further disclosure of Foreign Affairs Minister’s mortgages with Bank of China

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Foreign Affairs Minister François-Philippe Champagne disclosed two mortgages held by the state-run Bank of China to “all relevant agencies” and that is all the transparency Canadians require about the financial arrangement, Deputy Prime Minister Chrystia Freeland said on Thursday.

The Globe and Mail reported earlier this week that Mr. Champagne’s mortgages with the Bank of China were initially valued at $1.7-million, and the current balance is $1.2-million.

The Conservatives and New Democrats are demanding that the Foreign Affairs Minister transfer the mortgages to a bank that is not state-owned to avoid potential conflict of interest.

The government declined to say whether Mr. Champagne will do that.

Foreign Affairs Minister has two mortgages with state-run Bank of China

“I have nothing further to add to the statement you received [on Wednesday],” Adam Austen, deputy director of communications for Mr. Champagne, said in an e-mail.

Mr. Champagne said he had a temporary work permit for Britain and was unable to get a loan from a British bank when he bought two apartments in 2009 and 2013 in London. At the time, he was working there as an executive with an engineering and construction conglomerate.

During a special virtual sitting of the House of Commons on COVID-19, Conservative Leader Andrew Scheer asked if the Trudeau government felt it was appropriate for the Foreign Affairs Minister to be beholden to a Chinese bank that answers to the Communist Party’s authoritarian rulers.

“Mr. Champagne owns two posh apartments in London, and owes an arm of the Chinese government over $1-million,” Mr. Scheer said. “Does the Deputy Prime Minister think it is appropriate to have a minister of the Crown owing an arm of the Chinese government over $1-million?”

Ms. Freeland defended her colleague, who is responsible for handling diplomatic relations with Beijing at a time of severe tensions.

“It has been clearly disclosed. Everyone is aware of it, including all relevant government agencies and our Ethics Commissioner, and Canadians have all the transparency they need,” she said.

Pressed by Mr. Scheer in the House to “disclose what interest rate he is being charged for the two mortgages on his London flats,” Ms. Freeland declined to comment. She said she did not know whether Mr. Champagne has renegotiated the mortgages since his appointment as Foreign Affairs Minister in late November, 2019.

The Bank of China, one of China’s largest financial institutions, is a small player in the British residential mortgage market.

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Data from UK Finance, a trade association for the British banking and financial services sector, showed that for 2018, the Bank of China was the 53rd-largest mortgage lender in Britain, with a 0.1-per-cent share of the market when measured by value of mortgages outstanding. In total, it had about £800-million, or $1.4-billion at current exchange rates, in mortgages outstanding.

NDP MP Charlie Angus told The Globe he believes Mr. Champagne must end the financial obligations if he expects to have any credibility handling relations with China.

“When you are the Foreign Affairs Minister dealing with the most explosive file with China that we have had in decades, how is it you have mortgages on properties in the U.K. with the Bank of China?” Mr. Angus said. “It’s not to say he has done anything wrong or would do anything wrong or be compromised, but right now the appearance just doesn’t look credible.”

Mr. Champagne secured two 30-year mortgages with the Bank of China of $683,000 (£400,000) for one apartment and $1.1-million (£650,000) for the second property, which he rents out, according to a source who was not authorized to speak publicly about the financial transactions. The source said Mr. Champagne was unable to obtain mortgages from a Canadian bank in London because he had been working out of the country for 15 years.

Mr. Champagne is dealing with the cases of Canadians Michael Kovrig and Michael Spavor, who China jailed in apparent retaliation for the arrest of a Huawei Technologies Co. Ltd. executive on a U.S. extradition warrant. China also slapped restrictions on Canadian agricultural imports.

“I think it is very dangerous for the Minister of Foreign Affairs of Canada to be in a position of potential commercial vulnerability to a foreign authoritarian power like China,” Conservative MP Garnett Genuis said.

Mr. Genuis, who is a member of the House of Commons Special Canada-China committee, told The Globe that Mr. Champagne should at least disclose all terms of the mortgages, including interest rates.

The first disclosure statements for Mr. Champagne since the October, 2019, election were posted to the Ethics Commissioner’s website on June 4.

Conservatives say they would like to know precisely how Mr. Champagne was vetted for the job of Foreign Affairs Minister. The process is confidential and changes from government to government.

Fen Hampson, the Chancellor’s professor at Carleton University in Ottawa, said it is his understanding that potential ministers are asked about their personal history, including whether they have a criminal record or have been disciplined by a professional body. “There is also usually an omnibus question where they are asked if there is anything they need to disclose that could embarrass the government or the prime minister,” he said.

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