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Canada's Finance Minister Joe Oliver speaks at an Industrial and Commercial Bank of China (ICBC) event that is launching a Renminbi (RMB) clearing centre and trading hub in Toronto, March 23, 2015.Mark Blinch/Reuters

Canadian Finance Minister Joe Oliver ushered in a new era of trade between China and Canada, inaugurating North America's first yuan clearing bank and trading hub.

The new clearing house, launched Monday, will allow Canadian and Chinese businesses to transact without the assistance of a third-party currency, streamlining financial services and making business between the two countries cheaper. Mr. Oliver and other officials hope the hub will increase trade between Canada and its second-largest trading partner, as well as allow other countries to reach the Chinese market through the yuan hub in Toronto, providing a further windfall for the city's financial sector.

"Tonight, China and Canada take another step forward together into a more prosperous future for our two countries," Mr. Oliver told the Metro Toronto Convention Centre audience at the launch ceremony.

Mr. Oliver, who was joined by representatives of the Industrial and Commercial Bank of China and Chinese ambassador Luo Zhaohui, pointed to China's rapid progress toward becoming the world's largest economy and outlined how Canada needs to diversify its trading partners to continue growing. The Canadian Chamber of Commerce estimated the trading hub could save Canadian businesses $6.2-billion over 10 years and boost Canadian exports by up to $32-billion.

The head of foreign exchange products at BMO Nesbitt Burns, C.J. Gavsie, said that while the hub will increase trade and make transactions cheaper and more transparent, the yuan clearing bank poses risks, both political and economic.

Mr. Gavsie said he thinks the increased trade the yuan hub will bring could harm Canada's relations with the U.S., as tensions between the two economic powerhouses mount. He also said the hub will continue to stretch Canada's trade deficit with China.