Canada has won approval for getting membership of the Asian Infrastructure Investment Bank, which is led by China. Canada was among 13 applicants, and won membership to the bank through its board of governors, while the bank says that Canada will become an official member after it fulfills its domestic requirements and also deposits its first installment of capital.
The Trudeau government recently introduced its federal budget, which set aside $256 million over 5 years for joining the bank. Trudeau announced that he will join the institution when he visited China last year, and it is now set to go through.
The bank was established by China in 2015, and aims to improve infrastructure capital throughout Asia for projects related to telecommunications, power, and transportation in places like Indonesia, Bangladesh, and Pakistan. This would make Canada one of the first members from North America, alongside the founding members, South Korea, Germany, France, and the United Kingdom.
The United States is strictly against the institution and warned that it would give loans to developing countries without looking into labor rights, the environment or anti-corruption reforms, which are generally looked into by the International Monetary Fund and the World Bank.
The bank is already announcing the introduction of around 13 new members, which will take it to an entirely different level. It has already dished out $1.73 billion (U.S.), with plans of giving out a further $10–$ 15 billion over the course of the next 5 years. The bank is expected to create various new opportunities for Canadian companies, which will add a lot to the global economic growth.
This move will also improve critical trade links, and also support economic growth for Canadian firms that are looking for new commercial opportunities. However, the move raises the question about the ethical stand of the current government, who has yet to respond to the concerns about labor rights, and environment and anti-corruption reforms the bank is known to avoid looking into.