Ottawa and Beijing have struck a deal that will see this country designated as a trading hub for China's yuan currency, a benefit that will lower the cost of doing business for Canadian companies seeking Chinese markets.

The hub, a financial centre sanctioned by China to clear and settle transactions in the Chinese currency, would likely be based in Toronto, sources say.

Some details remain to be worked out but sources say this is expected to be announced during Prime Minister Stephen Harper's trip to China that begins this week.

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It's a sign that efforts to repair relations between Canada and China are bearing fruit.

This hub would mean a great deal in particular to small or medium-sized businesses looking for competitive advantages in dealing with China.

It's been estimated by the Canadian Chamber of Commerce that this hub could generate as much as $32-billion in additional exports over 10 years.

It also gives Canada the first yuan hub in the Americas, which will result in a significant advantage in trade finance – one that could prompt multinationals to move treasury operations to Canada.

Ontario Premier Kathleen Wynne welcomed the news Tuesday morning.

"There is a rumour that that is the case. I sincerely hope it is the case. I hope that [yuan] trading centre will be located in Toronto," the Premier said. "We've been pursuing this for some months … this would be a very good thing for the financial services industry in Canada."

Chinese companies prefer transacting in their own currency. Otherwise they have to convert their transactions into U.S. dollars, and then "re-convert" back in China.

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A yuan trading hub has the financial infrastructure for settlement and clearing, and sufficient liquidity to handle large transactions at a stable and predictable exchange rate.

Mr. Harper heads to Asia Wednesday to try and set the China-Canada relationship on a more even keel after a rough couple of years.

Relations have cooled since Mr. Harper's last trip to Beijing when Canada and China clinched a foreign investment deal.

Since then, the Canadian government has barred Chinese state-owned companies from further investment in the oil sands, raised concern in the media about security risks of buying technology from a major telecom company in China and publicly blamed Beijing for hacking Canadian government computers.

Mr. Harper, who has alternated between a hawk on China who wouldn't sell out to "the almighty dollar" and a pragmatist calling for deeper economic ties, will now try to strike a rapport with Chinese President Xi Jinping in Beijing.

The Prime Minister will stop first in Hangzhou, where he'll meet with Jack Ma, founder of e-commerce giant Alibaba.

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Making it easier for Canadian companies to do business in the yuan should provide a major boost to Canada's trade and encourage Chinese investors to view Canada as their beachhead in North America.

The likelihood of the deal being signed was greeted with cheers by Neil Tait, a former long-time banking executive in China who is now vice-chair of the Canada-China Business Council, and among the leading voices calling for the creation of a settlement hub.

Not only does it stand to reduce costs for businesses, he said, it will also direct attention toward Canada.

"In Asia, they don't look to Canada as a major financial centre. They look to New York, they look to London, they look elsewhere. Now when they suddenly see this in Canada, it elevates us tremendously, and that itself can presumably open additional doors to us, if we so wish to pursue them," he said.

With files from reporters Adrian Morrow and Nathan VanderKlippe.