Canada-Israel relationship close and getting closer

Canada remains a relatively small player in world affairs, but Israeli Prime Minister Benjamin Netanyahu's visit to Ottawa on March 2 reflects the growing significance of Canada's relationship with Israel, which in recent years has deepened — both politically and economically.

Canada has supported Israel from the beginning and was one of the 33 countries that voted in favour of the 1947 United Nations resolution that led to the founding of the nation of Israel a year later.

Over the years, Canada has shown support by often opposing UN resolutions calling on Israel to withdraw from occupied Palestinian territory. The Israel-Lebanon war in the early 1980s, however, saw relations weaken, with Canadian prime minister Pierre Trudeau telling prime minister Menachem Begin that he could not accept "that the present military activities are justified."

Canada has nonetheless remained a staunch backer of Israel's interests, though a rift emerged in 1997 after it was discovered that Israeli agents had used Canadian passports to sneak into Jordan and assassinate a senior Hamas operative (a mission that ultimately failed).

Canada recalled its ambassador to Israel over the affair.

How has the relationship changed in recent years?

The election of Stephen Harper as prime minister in 2006 heralded a period of particularly strong Canadian support of Israel — stronger, in some respects, than that of Israel's biggest patron, the United States.

After the Palestinian lelections of 2006 that swept Hamas into power, Canada was the first country to boycott the new Hamas government — even before Israel. Canada and most Western countries consider Hamas a terrorist organization.

At an anti-Semitism conference in Ottawa in 2010, Harper remarked, "There are … a lot more votes — a lot more — in being anti-Israeli than in taking a stand. But, as long as I am prime minister, whether it is the UN or the francophonie or anywhere else, Canada will take that stand, whatever the cost."

Israeli Prime Minister Benjamin Netanyahu made a special mention of Canada during a 2009 speech to the UN General Assembly, saying, "I wish to extend my thanks to Prime Minister Harper for his staunch support for Israel's right of self-defence."

What is Canada's position on Palestinian statehood?

Canada supports the so-called two-state solution, which proposes two sovereign countries: Israel and a predominantly Arab Palestine, whose borders are yet to be negotiated between Israel and the Palestinians.

Netanyahu has publicly backed this arrangement but with stipulations, including at one point last spring a refusal to reset Israel's borders to those in place prior to 1967. He has also called on the Palestinians to return to the negotiating table without preconditions, a position that Canada supports.

Like Israel, the U.S. and some European countries, Canada opposed the Palestinians' September 2011 bid to be recognized as a state and to be allowed to join the UN, a largely symbolic gesture aimed at getting legitimacy on the world stage for the Palestinian cause.

In his speech before the UN General Assembly a few days after the bid, Foreign Affairs Minister John Baird decried it as a "unilateral action." He was criticized for withdrawing statements from an earlier draft of the speech that identified Canada as a "leading supporter" of the Palestinian people.

In 2010-11, Canada provided $70.6 million in aid to the Palestinian territories through CIDA programs.

Does Canada support Israel's stance on Iran?

Israel contends Iran is developing nuclear weapons and has been forthright about its willingness to consider a pre-emptive military strike on Iranian nuclear facilities.

When asked about Iran's intentions in an interview with the CBC's Peter Mansbridge in January, Harper said "in my judgment, these are people who have a particular, you know, fanatically religious worldview, and their statements imply to me no hesitation of using nuclear weapons if they see them achieving their religious or political purposes."

In February, a  former Israeli national security adviser praised Harper's assessment of the threat posed by a nuclear-armed Iran at a military symposium in Ottawa, calling it "eloquent."

How important is trade between the two nations?

The value of Canada's trade with Israel is roughly comparable to our trade with Ireland or Austria, which have populations that are similar in size to Israel.

In 2011, Canada exported $394,215,685 worth of goods to Israel and imported $982,084,862 worth of merchandise.

Our main exports to Israel are machinery, electrical equipment, paper and newsprint, plastics, wood and aluminum. Israel's main exports to Canada are pharmaceutical products, electrical equipment, precious stones and metals, machinery, optical equipment and organic chemicals.

Machinery, electrical equipment and mechanical appliances make up the most significant exports, totalling $81,105,318 in 2011. Chemical products, primarily pharmaceuticals, are the most significant imports, totaling $310,261,787, followed by machinery, electrical equipment and mechanical appliances, which totalled $219,837,399 in 2011.

Israel foreign direct investment in Canada was $1 billion in 2010.

How significant is military trade?

Canada imported $2,592,517 worth of arms and ammunition from Israel in 2010 and exported $658,734, but analysts say the value of military-related trade between the two countries exceeds those amounts when related technologies are included.

For example, Canada has leased Heron surveillance drones, or unarmed aerial vehicles (UAVs), from Israel for use in Afghanistan, and Canadian companies have sold technology and components for Israeli military equipment. Pratt and Whitney Canada engines, for example, power some of the aircraft of the Israeli air force.

The business relationship in the security and military sectors has been helped along by a declaration of intent Canada and Israel signed in 2008 in which they agreed to enhance co-operation in the areas of public safety and counterterrorism.

What are some significant Canadian and Israeli business investments?

• The Canada-Israel Industrial Research and Development Foundation was set up in 1994 to  fund collaborative research and development projects in areas such as surveillance, nanotechnology, photonics, precision optical equipment and life sciences. It is funded by the Canadian and Israeli governments, and the latest round of funding on the Canadian side, $5 million, was announced in July 2011. The Ontario government has also kicked in funding for projects that involve Ontario companies.
• Saskatchewan's Potash Corp. owns 14 per cent of Israel Chemicals Limited, a supplier of potash and phosphate fertilizers.
• Bombardier's transportation division, headquartered in Germany, has millions of dollars in contracts with Israel Railways. It has sold double-decker rail cars to Israel and recently secured the maintenance contract for those cars as well as additional sales of cars and equipment.
• A consortium of Canadian companies was involved in building the Cross-Israel Highway. In 2010, one of the Canadian firms, Aecon, sold its interest in the highway for close to $78 million.
• Real estate had been an area of significant investment for Israel although recently, some of the big players have started selling off their Canadian properties. Delek Global Real Estate sold off its stake in 30 Canadian strip malls last year. Gazit-Globe, through its stake in First Capital Realty, remains a major commercial developer in Canada.
• Israel Aerospace Industries and its Canadian partner, MacDonald Dettwiler, secured a $95 million contract with Canada's Department of National Defence to provide UAVs for Canada's military mission in Afghanistan.
• Before it went bankrupt, Nortel Networks sold telecommunications infrastructure in Israel, including to the Israeli Air Force and the Ben Gurion International Airport.
• Senstar, a subsidiary of the Israeli company Magal Security Systems, provides security equipment for Canadian correctional facilities.