We ask Canada’s Ambassador Extraordinary and Plenipotentiary to the Republic of Kazakhstan, Shawn Steil, to tell us about the results and prospects of trade and economic cooperation, as well as the experience of the Canadian mining industry.
What is the current development of relationship between our countries in the sphere of trade and investments?
Canada and Kazakhstan may seem like they are far apart, separated by oceans on opposite sides of the world. But our countries have much in common, and our societies have many shared experiences. These similarities make us natural partners in a globalized, globally competitive world. They give us a solid foundation for partnership that will create better futures for our people and the world.
Canada and Kazakhstan are both large countries with sparse populations: amongst the most sparsely populated countries on earth. This gives us shared challenges of unifying the country, building national infrastructure, extending services, and developing the economies with remote populations.
Few other countries must cope with the large distances required to move products and people across the country. In Canada, the construction of the national railway was a nation building exercise, binding very different territories and communities together by train. Later, with the development of flight, Canada’s famous bush pilots flying Twin Otters and other small aircraft made in Canada, connected remote northern communities with the cities in the south. Canada has developed expertise in cold weather road construction perfectly suitable for Kazakhstan. Now we talk about the information super highway. Providing high speed internet to every corner of countries as large as Canada and Kazakhstan presents a significant challenge. Strictly speaking, projects like these might not always be commercially viable on their own. The collective support of the people, or the government, in building national infrastructure is key in countries like Kazakhstan and Canada. Kazakhstan-Canada relations are therefore more than just commercial; they are relations between two countries encountering strikingly similar realities.
The expertise Canada has developed in agriculture, oil and gas, mining and education are well suited to Kazakhstan’s conditions and create many opportunities for business in both countries.
Canada is now ranked amongst the Top-10 of the largest trade and investment partners of Kazakhstan. The volume of bilateral trade amounted to more than $6bln in 2012–2013. Apparently this makes Canada, Kazakhstan’s largest trading partner in the America, surpassing even the United States.
In turn, within the CIS and Eastern European markets, Kazakhstan is currently ranked as the top Canadian trading partner. Canada has identified Kazakhstan as priority emerging market with specific interest for Canadian businesses, within Canada’s Global Markets Action Plan. The Plan is a 5-year strategy for increasing Canada’s international trade. During the period 1994–2011 the level of Canadian investment in Kazakhstan’s economy grew to almost $14 billion.
What branches of the economy of Kazakh-stan are most attractive to the Canadian business?
Canadian businesses have been actively engaged in supporting the development of Kazakhstan’s mining sector. Canada is the world’s leading mining country. In addition to supporting some of the most advanced mining operations in Kazakhstan, Canada is also making important contributions to the country’s mining policy and geological survey capacities. Kazakhstan has globally top-ranked known deposits of many important metals. Canada is convinced Kazakhstan has even more resources than are currently known, and is helping Kazakhstan to not only discover these resources, but also to responsibly develop them. We anticipate that once Kazakhstan’s new mining code is in place, Canadian junior exploration companies will be very interested in helping Kazakhstan develop its impressive resources.
Canadian companies continue to support the sound development of Kazakhstan’s oil and gas resources, including through maximizing the resources extracted from existing wells, as well as helping other companies ensure they meet Kazakhstan’s strict environmental and safety standards.
Agriculture continues to be one of the most dynamic areas of Kazakhstan-Canada commercial cooperation. Canadian companies are helping Kazakhstan develop its beef and dairy industries to international standards, through the provision of live cattle, and also by providing high-quality genetic materials and by training local farmers and veterinarians on their use. In addition to the high-quality, name brand farm machinery Canadian companies sell to Kazakhstan, we are proud of the innovation that some Canadian farmers have introduced to Kazakhstan by adapting farm machinery to Kazakhstan’s specific requirements. Canadian companies are also interested in helping Kazakhstan diversify its horticultural sector. Much more could be done, for example, to develop seed oils and non-wheat products.
Canada readily welcomes Kazakhstan students at our boarding schools, colleges and universities. Canadian companies are also very interested in supporting the development of Kazakhstan’s own education sector. In particular, the Canadian college system provides an excellent model by which Kazakhstan could improve much-needed technical and vocational training for the country’s growing population. Canadian companies stand ready to help.
What questions are most critical for further strengthening of business cooperation of our countries?
Like businesses in many other countries, Canadian businesses appreciate stability and predictability: they need to have confidence they will be able to secure a return on their investments. In the mining sector, for example, this means that a junior exploration company requires assurances they will be able to sell their discovery to an international investor without fear of interference by the government or others. In the agricultural sector, companies selling cattle need to know their commercial agreements will be respected and they will be paid as agreed in their contract. And in all cases, businesses want to be confident that if they encounter difficulties in a business transaction, there is a transparent, reliable appeal mechanism through which they can seek to resolve their commercial dispute. Canada is very interested in negotiating a Foreign Investment Protection Agreement with Kazakhstan to help provide Canadian companies with the type of assurance they require to invest in Kazakhstan’s future.
Canadian success comes in large part from innovation. And the Canadian experience shows that innovation is best led by small- and medium-sized private enterprise. Ballard Power Systems, for example, designed and manufactured one of the world’s first clean energy hydrogen fuel cells. Now they employ fuel cell technology to produce smarter, clean and reliable power. In the process, they have helped generate a Canadian fuel cell industry that is sharing the technology around the world. As Kazakhstan continues to develop a middle class, and as Samruk-Kazyna proceeds along its ambitious transformation process, Canadian small- and medium-sized businesses will have more counterparts in Kazakhstan with whom they can collaborate.
Your country has highly developed mining complex, with key emphasis on geological exploration.
What kind of mechanisms help to stay in the lead and how are they applicable for Kazakhstan?
The main difference in the mechanisms of geological exploration between Canada and Kazakhstan is that in Canada over 70 percent of exploration is done by junior companies. Juniors search for new deposits of precious metals, and strive to acquire properties that are believed to have a big probability of including large resource deposits. Once they find deposits, the juniors then own the discoveries. In most cases, juniors do not have the capacity to develop the resources they find into operating mines, and so the properties are later acquired by larger, senior companies for further development. Canada’s mining legislation eases the process for companies to obtain licenses, and includes clear environmental protection standards for all stages of mining development (from exploration to remediation, including water management during the mine’s lifetime). Canada’s clear claim regulation standards provide companies with the security and predictability they require to conduct their exploration work.
One of the main drivers of geological exploration is financing. In Canada, exploration companies have access to funding through stock exchanges, and in particular the Toronto Stock Exchange. Exploration involves significant financial risk, and access to reliable, public stock exchanges allows juniors to raise capital, and allows investors to mitigate financial risk. Juniors can also be contracted by major companies to do exploration.
Canada makes all geological information freely available to the public. Having easy full access to the countries’ geological data provides exploration companies with the information they require to conduct their work. With Canadian help, Kazakhstan is moving in this direction, but a lot more work remains to be done.
Canadian companies are currently cooperating with Kazakhstan’s mining sector, and are ready to increase their level of cooperation. In particular, Canadians are successfully working with Kazgeology National Operator for Geological Exploration. They also work with private sector companies, for example Geoken and Azimuth. Further, geologists from Kaz Minerals (former Kazakhmys), Kazzzinc and other mining companies work with specialists from Canada. Such companies often employ new Canadian technologies (like radiometric, telluric methods) and world class equipment to help increase their productivity and success in finding both new deposits as well as finding new resources at older deposits.
Canada is one of the largest agricultural players in the world. What role does the government play in this sphere? How, in your opinion, Canadian experience can be used by Kazakhstan?
Canada is renowned globally for producing safe, high-quality agriculture and agri-food products, and for being a strong and long-standing trade partner in the global food trade. Canada is one of the world’s top 5 largest agricultural exporters. Canadian horticulture is predominantly focused on flaxseed, canola, pulses and durum wheat, as well as grain equipment. Canada is also a leading global exporter of beef and dairy cattle, hogs, genetic materials, as well as cattle technologies and equipment. The Canadian processing industry has a good reputation in global markets, and so Canada sells significant amounts of horse and pork meat to Kazakhstan. The agriculture and agri-food sector employs over 2.2 million Canadians. There are approximately four million beef cattle in Canada. And the annual contribution of this sector to Canada’s Gross Domestic Product is over $100 billion. Innovation and ingenuity contributes to the fast growth of Canada’s agricultural sector.
Agriculture in Canada is led mainly by industry, and the Government has minimal involvement. Being an active WTO member, Canada does not provide any direct subsidies to the agricultural sector. Agriculture and Agri-Food Canada, a government agency, delivers programs to help stimulate growth in the industry by increasing farmers’ knowledge and capacities, and by helping the research sector develop close connections with the industry. Overall, the Government of Canada’s principal agricultural goals include: stable financial returns for producers; stable high quality food supply at reasonable prices; rural development; conservation; increasing the self-reliance and market orientation of the agricultural sector; decreasing government finance; and increasing Canadian competitiveness in the global markets.
Through research development, the Government of Canada has promoted innovation in the agricultural sector. Government and industry work together to: fight crop and cattle diseases; increase varieties and productivity; and to develop strong standards that are compliant with the highest customer requirements across the globe. This partnership and collaboration brings safe, healthy and high-quality food to Canadian tables.
Canada and Kazakhstan are natural partners, with similar climatic and soil conditions, and have been working together on agricultural cooperation for many decades. In partnership with Canada, Kazakhstan has been successfully improving its breeds, increasing its yield productivity, and advancing its agricultural sciences. As a result, transferring the Canadian experience to Kazakhstan is not something new. For example, Canada introduced zero-till technology to Kazakhstan over 50 years ago. Canadian industries are successfully sharing their best farm and crop management practices. For example, Canadian agricultural machinery makes important contributions towards increasing the annual yield productivity and return on profits in the grain trade; Canadian cattle maintain their productivity levels in Kazakhstan; and Canadian genetics are helping farmers in Kazakhstan to become increasingly self-reliant. Nevertheless, there is still much more Canada and Kazakhstan can do together.
Canadian programs in beef, dairy, and crop diversification programs can easily be integrated and succeeded in Kazakhstan’s national agricultural development plans. The research collaboration and exchange potential in cattle and crop research between Canada and Kazakhstan is immense. Given the similarities in both climate and crop conditions, the Canadian experience can easily be integrated in Kazakhstan. Canadian approaches and technology for cattle breeding provide a good basis by which Kazakhstan can rapidly develop its beef and dairy sectors. The model of close collaboration between researchers and industry in Canada can also be used to help Kazakhstan’s agricultural and research sectors better work together. To summarize: the question is less about how the Canadian experience can be used to support agricultural development in Kazakhstan — it already is being used — and more about how we can increase and accelerate the exchange.
What recent joint initiatives you would note in education, science and new technologies?
The Southern Alberta Institute of Technology, a Canadian college, recently partnered with Kasipkor to create the Atyrau Petroleum Educational Center. The purpose of this specialized college is to train Kazakhstani students in the latest technology and skills required to work in modern oil fields. Canada is a world leader in the development of colleges and a college system that partner with industry to help meet the labour needs of an evolving commercial market. A strong college network is essential to training skilled labour and providing essential field experience. Canadian colleges are interested in working with Kazakhstan’s government and industries to help the country develop a college system that will support Kazakhstan’s future growth and economic diversification. The Atyrau Petroleum Educational Center is a successful example of this collaboration. Oil projects in Kazakhstan are already benefiting from the collaboration, and are increasingly able to hire well-trained Kazakhstanis to work in local oil fields.
The Canadian company Phoenix Geophysics has partnered with Kazakh National Technical University to create the Canada-Kazakhstan Scientific-Technical Geological Center. The Center will: 1) prepare Kazakhstan’s future geologists and geophysicists; 2) serve as a training center for industry specialists; 3) provide a scientific center for young scientists and students; and 4) provide a center for the interpretation of geological and geophysical data. To develop the Center, Canadians provided free geophysical equipment and software, and also trained the Center’s trainers.
In the field of transport, Canadian companies have been exploring opportunities to share Intelligent Transportation System technologies with Kazakhstan. These technologies include systems that detect speeding, driving through red traffic lights, and use of seat belts and mobile phones. They also include smart traffic light controllers that help mitigate traffic congestion at intersections, and weigh-in-motion systems that enable better control of heavy trucks that use Kazakhstan’s transportation infrastructure.
H.E. Shawn Steil
Was appointed Ambassador to Kazakhstan, the Kyrgyz Republic and Tajikistan in 2014. He began his career in Foreign Affairs working on security sector reform before back-to-back postings in China.
In Beijing he was Executive Assistant to the Ambassador while reporting on China’s foreign policy and managing relations with Mongolia. In 2006 he became head of the Consulate in Chongqing where he supported a rapid growth in Canadian engagement in Southwest China and coordinated Canada’s on-the-ground response to the Wenchuan Earthquake. Immediately before his appointment, he was head of the Canadian Consulate General in Istanbul and Senior Trade Commissioner for Turkey, Georgia, Azerbaijan and Turkmenistan.
He received his International Baccalaureate on a full scholarship to the Lester B. Pearson College of the Pacific, a United World College near Victoria, British Columbia before volunteering in Costa Rica and Malaysia. He returned to Canada to complete a degree in anthropology at McGill University in Montréal, and completed award winning research on the social, economic and environmental impact of Three Gorges Dam in China, leading to a Master of Environmental Design from the University of Calgary.