10/11/2017 00:44 EDT | Updated 10/11/2017 15:41 EDT

Canada's Relations With Iran Are At A Historic Crossroads

If passed, Bill S-219 would impose restrictive sanctions on Iran and potentially stall the re-establishing of diplomatic relations with the country.

Among Prime Minister Justin Trudeau's list of campaign trail promises in 2015 was the re-establishment of diplomatic relations with Iran. To date, a few small steps have been taken in this direction. The issue might have quietly simmered down, were it not for the readings of Senate Bill S-219 "An Act to Deter Iran sponsored terrorism," which, if passed, would impose some of the most restrictive sanctions on Iran, and potentially stall the prospect of re-establishing diplomatic relations with Iran.

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Prime Minister Justin Trudeau speaks to world leaders at the 72nd United Nations (UN) General Assembly at UN headquarters on Sept. 21, 2017 in New York City. Topics discussed at this year's gathering included Iran, North Korea and global warming.

Background to Iranian-Canadian relations

Robust relations with Iran date back to the regime of the last Shah of Iran, Mohammed Reza Pahlavi who ruled from 1941 to 1979. Canada's gravitation to Iran came at a time when nations courted the pre-revolutionary regime for its oil. The Shah's ambitions to modernize his country's military and industrial capacity using the country's massive oil revenues created many economic opportunities, eventually propelling Iran to be one of Canada's largest trading partners in the Middle East. These opportunities came to a halt with the 1979 Iranian revolution, which ended the Shah's reign, changed Iran's political landscape, and the trajectory of its relationship with Canada and many other nations. Canada's relations with Iran sharply contracted during the eight-year-long Iran-Iraq war, although later commercial relations were greatly improved in the 1990s.

The suspicious death of Iranian-Canadian photojournalist Zahra Kazemi in 2003, who died while detained in Tehran's Evin prison, resulted in the downgrading of relations. By 2012, Canada formally suspended diplomatic relations with Iran, citing not only its noncompliance with UN resolutions on its nuclear program but also its hostile rhetoric towards Israel, support for the Assad government in the Syrian civil war and safety concerns for Canadian diplomats. In the same year, Canada identified Iran as a state sponsor of terrorism under the State Immunity Act and Justice for Victims of Terrorism Act. Accordingly, Canadian and Iranian diplomats retreated, leaving behind a precarious situation.

Today over 163,000 Iranians (by birth or descent) call Canada home. The first wave, including Western-orientated professionals, business people and disenfranchised minorities, came to Canada around the time of the 1979 Iranian revolution. A second wave, from the 1990s to the present, has seen highly skilled Iranians, many in STEM fields, leave Iran due to insufficient economic opportunity and social restrictions. Consequently, Iran suffers from the world's highest rate of human capital flight.

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Islamic Republic of Iran passport.

Viewpoints amongst Iranian-Canadians

Iranian-Canadians cannot access consular services, making it difficult, if not impossible, to renew passports or to obtain visitors visas for family members. Iranian-Canadians hoping for the re-establishment of relations are not naïve, but rather realist in their views of the regime: they are cognizant of the fact that Iran is an undemocratic nation with a poor record of human rights — but underscore that the problem impeding the relationship, namely Iran's noncompliance with United Nations resolutions regarding its nuclear programs, has been resolved through the Joint Comprehensive Plan of Action (JCPOA) (better known as the Iran nuclear deal). Others fault Canadian foreign policy for being tied to the American position and urge Canada to adopt a more neutral line by re-opening relations. Lastly, a Canadian embassy in Tehran would, in theory, provide leverage to help Canadians (and perhaps Americans) who seek diplomatic assistance while in Iran.

On the other side, a substantive portion of Iranians continue to express opposition to re-opening diplomatic relations with Iran, with one of the most common arguments being that the government of Iran is not a legitimate representation of its citizens. Evidence for the latter includes the protests since 1979, notably the 2009 and 2011 election protests. From this perspective, the re-establishment of relations with Iran would lend credibility to the regime and marginalize the voice of the opposition. Other critics note that pre-existing relations were unable to stop the murder of Zahra Kazemi. Others are distrustful of the intent of the Iranian embassies citing that they have been used in the past to spy on dissident Iranian-Canadians.

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Economic possibilities

Another complexity lies in the commercial and economic relations between Iran and Canada. Due to years of relative isolation and economic neglect, Iran finds itself ripe for foreign investment and joint ventures. In purchasing power parity (PPP), Iran's economy is roughly the same size as Canada's, and GDP growth in the first half of the Iranian calendar year (ending on March 20), reached 7.4 per cent. Iran has one of the world's highest numbers of scholarly citations, has launched a satellite into space and in 2011 brieflysurpassed the United Kingdom in automobile production. Despite this, massive influxes of industrial and technological goods are still needed to meet the demand.

This year, Italy and France, two countries with a long history of investment and co-operation with Iran, signed billions of dollars in trade agreements with Iran for heavy machinery, refining equipment and commercial jets. Many analysts have noted that there is a clear division between how Europe and the United States wish to interact with the Iran in the wake of the JCPOA. As the financial prospects for the Canadian technology and manufacturing sectors become strained by Trump's "America First" policies, new markets such as Iran will become increasingly attractive prospects. Iran's needs are endless — from commercial jets ( e.g., Bombardier) to oil and natural gas infrastructure (e.g., SNC Lavalin), to cellular phones (e.g., Blackberry) and medications ( e.g., Valeant Pharmaceuticals). On the downside, the expansion of trade with Iran could jeopardize Canada's trade relations with other countries, namely Saudi Arabia and Israel.

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The Canadian Government closed its embassy in Iran and expelled all remaining Iranian Diplomats from the Iranian Embassy on Metcalfe Street, pictured here, in Ottawa.

What's at stake abroad?

The passing of Bill-219 means that Canada would formally challenge Iran over its ever-growing political leverage in a host of nations, namely Afghanistan, Lebanon, Iraq, Syria and Yemen. Conversely, the re-opening of diplomatic relations with Iran could potentially positively influence Canada's position among this group of nations, who have been labelled the "Axis of Resistance."

The fate of the Iranian-Canadian relationship may also act as a precedent for how Trudeau's administration would interact with other undemocratic nations such as Cuba and China. Re-establishing diplomatic relations with Iran would mark a departure from former Prime Minister Stephen Harper's hard-line policies, which involved criticizing and sanctioning nations such as Iran and Russia when they misbehaved in the international arena. However, shutting the door on relations may also strengthen Canada's diplomatic position with two other key allies — the United States and Israel.

Canada may find itself at a crossroads when it comes to Iran. It could vote to repeal Bill S219 and re-engage Iran with the goal of restoring diplomatic relations, or it could pass Bill S219 and either further widen the gap between the two countries. Either way, the outcome will be contentious.

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