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A federal government Crown corporation is billed as the main sponsor of a Canada Day-themed gala in Beijing later this month, even as two Canadians remain jailed in China over what the Trudeau government has called “entirely political reasons.”

Destination Canada, formerly known as the Canadian Tourism Commission, is advertised as the “principal sponsor” of a “Canada Day in Beijing Gala dinner” on June 21 in the Chinese capital. Lead sponsors include Power Corp., Bank of Montreal, Royal Bank of Canada and Manulife Financial Corp.

It will take place as Canada-China relations are at their worst, as former Canadian diplomat Guy Saint-Jacques has noted, since Ottawa established diplomatic relations with Communist China in 1970. Foreign Affairs Minister Chrystia Freeland has strongly condemned China for what she called the “arbitrary arrest” of former Canadian diplomat Michael Kovrig and entrepreneur Michael Spavor, whose detention by Beijing has surpassed six months.

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The Canadians’ arrests are widely regarded as retaliation for Canada’s detention in December, 2018, of Huawei executive Meng Wanzhou, who the United States has petitioned Ottawa to hand over. In the ensuing months China has inflicted increasing pain on Canadian farmers, banning and restricting the import of significant Canadian commodities including canola, soybeans, pork and beef.

Since December, two Canadians in China have been handed death sentences, including one who had his sentence changed to the death penalty.

Conservative foreign affairs critic Erin O’Toole said the gala event should be cancelled.

“This is outrageous. With the detention of our citizens and unwarranted trade stoppages directed against Canada, we should not be acting like ‘situation normal,’ ” he said.

David Goldstein, the president and chief executive officer of Destination Canada, said China is the biggest source of visitors to Canada after the United States. His organization said travellers to Canada from China spent $2-billion in this country last year.

His Crown corporation’s involvement arose from a multiyear agreement, he said, between Destination Canada and the Canada China Business Council covering a series of activities in China.

The June 21 event, as listed on the Canada China Business Council’s website, bills Destination Canada as the “presenting sponsor” in English and "commanditaire principale,” or main sponsor, in French.

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A spokeswoman for Destination Canada later on Tuesday said the Crown corporation disagrees with the reference to it as a sponsor. “This is not a sponsorship [but] rather a partnering agreement,” Denyse Waissbluth said.

She said Destination Canada contributed $180,000 to this partnering agreement with the Canada China Business Council in 2019 to stimulate more trade activity in Chinese cities. “The focus of this partnership is not the Canada Day event,” she said. “That’s only one element of a much broader trade initiative.”

Asked whether he felt it was appropriate for a Canadian Crown corporation to be helping stage the gala now, Mr. Goldstein said China remains an important source of tourism. “It’s still an important market for us. We’re still conducting marketing campaigns throughout China and Beijing. The image of Canada as a destination for business and leisure travellers is still important,” Mr. Goldstein said.

The Crown corporation will try whenever possible to raise Canada’s profile with prospective Chinese visitors, he said. “Beyond geopolitical issues, I would say bilateral travel is probably one of the best sources of people-to-people diplomacy that we can have at times like this.”

Mr. Goldstein said Destination Canada as an independent Crown corporation has its own authority to strike commercial partnerships such as this one.

Canadian Tourism Minister Mélanie Joly’s office declined to intervene in the matter. “Destination Canada is a Crown corporation acting at arm’s length from the government and responsible for operational decisions in market,” Ms. Joly’s press secretary, Jérémy Ghio, said in a statement.

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Mr. Kovrig and Mr. Spavor were taken into custody in China last December only days after Canada detained the senior executive from Huawei on an extradition request from the United States. The pair were detained for more than five months without charges before being formally arrested in mid-May on allegations of national security violations.

The June 21 Canada Day festivities in Beijing, organized by the Canada China Business Council, will feature Canadian lobster, beef and wines as well as entertainment by Canadian acts including Madame et son Orchestre and Janaia.

NDP MP Nathan Cullen said it is unthinkable for a government agency to sponsor a gala while Canadians are in jail.

“Celebrating with lobster, beef and [music] while two Canadians are facing execution by the home country’s rigged judicial system? Seems like our priorities are screwed up and that Trudeau and the embassy are trying to pretend it’s business as usual,” Mr. Cullen said.

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