The Asian Infrastructure Investment Bank has made Canada a prospective member, welcoming Ottawa into an institution that marks one of China's leading efforts to take a place of global leadership.
Joining the bank will give Canada a voice at the table of a major new multinational organization, although with less voting clout than it might have wielded had it moved earlier, alongside 57 founding members.
Instead, Canada on Thursday joined Afghanistan, Ireland, Ethiopia and nine others accepted in a second membership round.
"We're absolutely delighted that Canada has taken this step, and we look forward very much to Canada playing a very full and active role in the governance of the institution," said Danny Alexander, a vice-president at the bank.
Once Canada ratifies membership, it will hold just under 1 per cent of bank shares in exchange for a capital subscription of nearly $1-billion (U.S.), although only 20 per cent of that needs to be paid into the bank over five years. Had Canada joined as a founding member, it could have secured up to 2.5 per cent of the bank's shares. At 1 per cent, it will now stand roughly equal to Israel, Switzerland and Poland.
The Conservative government under Stephen Harper balked at the bank, which the U.S. has shunned. But last August, as part of a bid to rekindle relations with China, Justin Trudeau's Liberal government said during a trip to Beijing that it had applied to join.
The U.S. and Japan are now the only G7 nations not part of the bank.
Canadian membership changes nothing for domestic companies or workers, who have been able to bid on contracts and apply for jobs since the AIIB inception in 2015. The bank has does not limit participation to members.
Joining, however, carries other benefits, said John Gruetzner, a Canadian business consultant with extensive experience in China, and co-founder of the Ottawa-based China Policy Centre.
The move to join the bank is "intelligent, because you don't want to have that irritant in the relationship when you don't need to," he said.
China pioneered the bank, but does not control it. Other founding members, including the United Kingdom, exerted substantial sway in writing its policies, which have been praised for meeting and exceeding international standards.
It nonetheless represents one of China's most ambitious attempts to "push China onto the world stage – and even onto the centre of that stage," said He Xiaoyu, a finance professor at Central University of Finance and Economics in Beijing. China, he said, is ascendant while the U.S. "is shrinking."
For Canada not to join the bank would amount to "losing a historic opportunity," he said.
"It will help finance flows for Canada and also be helpful for Canada's global image – in addition to promoting Canadian international trade."
Bank membership can create new links with China, providing an element of stability outside the disputes that sometimes mar diplomacy, Mr. Gruetzner said.
"When you enhance the relationship with matters of substance and mutual gain, you have a much more solid rapport between governments and people," he said.
The bigger problem, he said, is persuading the Canadian corporate sector to bid on contracts as the bank goes about its work of funding new rail, bridge and electricity generating projects across central and south-east Asia.
"We have a really dismal track record of selling to the World Bank and the Asian Development Bank as a country," he said. "Ideally, we don't want to duplicate that experience."
With reporting by Yu Mei