But according to Canadian Ambassador to Hungary Ronald Halpin, the situation is evolving, and the relationship between the two countries continues to be good. Recent investments from auto parts manufacturer, Linamar, and water filtration firm Zenon Environmental Industries, are proof that Canadian investors have not given up, even in the context of the bilateral investment climate in recent years. DT spoke to ambassador Halpin about trade and political relations between Hungary and Canada ahead of the arrival in Budapest of an important mission made up of senior Canadian government officials.

In mid-November, a delegation of the Canadian government officials will visit EU accession states. What is the mission of this delegation?

Ronald Halpin We will be reviewing- with the government and the business community, as well as some NGO’s, the Canada-Europe relationship. After all, when Hungary enters the European Union, it adopts 30 years of contractual relationships and agreements with Canada. It is time that we started to make sure that there is dialog and not only between foreign ministries, but ministries of culture or in some cases, provincial governments and para-state institutions. We are being forced to do this by the timelines of accession. The fact remains, also, that a lot of our relationship over the past 50 years, and particularly since the systemic changes, have been driven by the people who left Hungary in 1956. But this is not, in the modern world, sufficient to build a bilateral relationship. There are going to be Canadians who are not Hungarian in origin, who cannot speak Hungarian, who are going to be involved in the bilateral relationship, and these people should have access.

Real estate developer TrizecHahn Corporation, a company that made some of the most important Canadian investments in Hungary in the 1990s, did an about-face in 2000 by divesting its most significant assets here, and changing their European strategy as a whole. Who are their successors in the investment scene?

Ronald Halpin TrizecHahn formally divested itself and sold off its assets in Hungary, but it does not mean that the Canadians who were involved in TrizecHahn have divested themselves or their Hungarian assets. There is still a significant ownership, partnership by Canadian investors, the same ones who were involved before are still involved with TriGránit and Sándor Demján. Property development has obviously done very well in Hungary, and investors have been active in that field.
I think that where you see the growth in investments, over a billion dollars in total, is with a new research and development facility in Oroszlány by Zenon Environmental Industries. This is their third investment in Hungary over the past 10 years and it shows a number of things: the confidence they have in the economy, the admiration they have for the workforce, and the fact that they can do research here. This indicates a commitment to working with Hungary. Linamar corporation is another investor that is expanding with plants in Békés county, one of the areas in Hungary that needs more development.
They expect to add another plant over the next couple of years, and have another joint venture with another Canadian company, Wescast, in Oroszlány.

Among the success stories, however, one important Canadian investor, Airport Development Corporation (ADC), has not been so lucky. Its investment in Hungary’s Ferihegy Airport was basically expropriated without talk of compensation. And this dispute remains unresolved. Why is it taking so long to settle the case? What are your hopes in connection to the case?

Ronald Halpin As to the length of time it is taking to resolve it, I think that question has to be put to the Hungarian side. There is no question that the people who were involved - ADC, its representatives here and in Canada, as well as the Canadian government - have always expected that under the foreign investment protection agreement that we have between the two countries, that any dispute that arose would be resolved expeditiously. And fairly, it was basically an expropriation. Some compensation is expected and that hasn’t happened.
I can only speculate on the reasons why, but now the case has been given to international arbitration to be settled, and my expectation is that over the next year or so we will have a decision. I think that at that point it will be clear whether it was a good idea to wait for the arbitration decision.

Hungarians still remember the Canada that opened its borders to them following 1956. Maybe that is why the re-introduction of the visa obligation for Hungarian citizens in 2002 was so painful. Is there any change expected in these affairs after the country’s accession to the EU?

Ronald Halpin There is nothing automatic. The re-imposition of the visa is a temporary measure. I think it is obvious that once the conditions that stimulated the re-imposition no longer apply, then the visa will be lifted once again. That means that we somehow have to prove the negative, which is very difficult.
But at a certain point the statistics will give a degree of confidence not only in terms of what is the likelihood of people coming to Canada and making a claim that is not successful, but also in terms of their opportunities to be mobile elsewhere, within the EU. I don’t think that it is a big problem, and I think we are going to get past this one within a reasonable amount of time.
My experience is that people from Central Europe in general are not that mobile. Sometimes it is difficult to get from one city to the next, let alone across the ocean.