Evidence of meeting #15 for Foreign Affairs and International Development in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was financial.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Yvon Bernier  Vice-President, Consulting Expertise, Développement international Desjardins
  • Christina Dendys  Director, External Relations, Micronutrient Initiative
  • Doug Horswill  Senior Vice-President, Sustainability and External Affairs, Teck Resources Limited

10:15 a.m.

Conservative

The Chair Dean Allison

Thank you very much.

We're going to move back here to Mr. Larose.

December 6th, 2011 / 10:15 a.m.

NDP

Jean-François Larose Repentigny, QC

Thank you, Mr. Chairman.

Thank you very much to our guests. What you're doing is very valuable. As a member from Quebec, I am pleased to see the representatives of the Mouvement Desjardins. I am moved by your involvement in international development.

I always find it fascinating to hear guests explain to us, using big figures, big numbers, the problems that there are and the solutions that are being provided on international issues. That always makes us do some serious thinking.

However, I would like us to go back to the initial item on the agenda concerning Africa. Would it be possible for you to give us a much more modest example of a small community where you are intervening through a project, specifically in Africa? Can you explain to us very simply, in layman's terms, the impact you are having on that specific community?

In addition, what impact would be produced if timeframes were imposed? I would like to have a true picture of those people in that small community in Africa who are experiencing the problems, and specific solutions that you have applied. What would happen if unreasonable timeframes were imposed?

10:15 a.m.

Vice-President, Consulting Expertise, Développement international Desjardins

Yvon Bernier

I'll try to answer your questions as well as possible.

I don't know whether you noticed in the text, but earlier I talked about supporting whole groups, groups already deployed that have put immense distribution networks in place in recent years.

We are dealing with that issue at this stage. Direct intervention in the base community is done by the Africans themselves. It is they, our partners, who are increasingly doing this work using their own resources.

We have fewer and fewer actions where we start from scratch, where we enter a community to establish the first caisse. We hope these enormous projects will come up again, but for the moment we are doing more to increase the penetration rates of the existing financial institutions, to reinforce their governance and to bring in technology so that they are able to go further in their communities.

Here's an example of a more limited impact. We are in Ségou, in a small village in northern Mali, where there is only one financial institution. Only the local caisse is open, and it must be open three or four days a week. It is mobilizing the savings of the people there. It grants credit, mainly to farmers. The caisse reinvests in its community through its surpluses and its network because all the caisses are now in a federated network. So it can have community development activities, such as supporting a dispensary or a school, with its resources. So it is contributing with other resources. As a result, a relationship of trust is being established between the community and the base financial institution.

I just thought of a clearer picture that I'm going to give you. During the governance problems in Haiti, no caisses in the Le Levier federation's network were attacked. I'm talking about the period before the earthquake. Four caisses were destroyed during the earthquake. People joined forces to get them back up and running, and they are still operating. I believe this type of institution is very deeply rooted in the community. The institutions serve the needs of the community and they work.

You also asked me what problems a financing deadline can cause. However, it isn't exactly working that way for us right now. If, for example, the program of support for the Le Levier federation in Haiti stopped, technical support would be withdrawn and programs would slow down.

I can tell you that we did not experience that. Even with all the problems, for us CIDA was really dilligent in readjusting the programs. There was no discontinuity between the events on which undistributed funds might have had an impact. We didn't experience it like that. Others may have experienced it in various ways, but that was not our case.

Naturally, if a commitment has been made and that financing is interrupted for various administrative reasons and does not reach its destination, there will of course be repercussions, since a series of activities is under way. In our case, however, we have not experienced that kind of problem recently. Historically, we have previously dealt with that, but not in the past 15 years or so.

10:20 a.m.

Conservative

The Chair Dean Allison

Thank you very much.

We're now going to move over to Mr. Dechert.

10:20 a.m.

Conservative

Bob Dechert Mississauga—Erindale, ON

Thank you, Mr. Chair.

I want to go to Mr. Horswill and Teck.

We've talked about zinc and vitamin A and the interesting projects that Teck is involved with in respect to those two elements. I understand also that Teck has what is known as a copper program in Peru. I wonder if you could describe that program for us and tell us how it's contributing to economic growth in that country.

10:20 a.m.

Senior Vice-President, Sustainability and External Affairs, Teck Resources Limited

Doug Horswill

I'm scratching my memory a little to understand. Do you mean in terms of the copper program's developing new projects?

10:20 a.m.

Conservative

Bob Dechert Mississauga—Erindale, ON

Is Teck operating in Peru?

10:20 a.m.

Senior Vice-President, Sustainability and External Affairs, Teck Resources Limited

Doug Horswill

Yes. We're a partner in a mine called Antamina 400 kilometres north of Lima. Our other partners include BHP and Xstrata and one Japanese trading house.

In the Antamina program, maybe it's the focus on community development you're interested in.

10:20 a.m.

Conservative

Bob Dechert Mississauga—Erindale, ON

Yes, I'm concerned about economic growth in that region.

10:20 a.m.

Senior Vice-President, Sustainability and External Affairs, Teck Resources Limited

Doug Horswill

There's a set of initiatives partly funded through a tax in Peru called a canon, which is additionally funded by a separate contribution from Antamina to a foundation run by local governments, mayors, and politicians. It funds infrastructure and agricultural opportunities and so on within the Ancash region of that part of Peru. The funding is running around $60 million a year, placed into trust, but I'm not certain of what the actual spending is. My hope is that they're building a capability to continue productive employment when the mine shuts down.

10:25 a.m.

Conservative

Bob Dechert Mississauga—Erindale, ON

How many people is Teck employing in Peru? How do you think mining companies like Teck can contribute to reducing poverty in the various nations where they operate?

10:25 a.m.

Senior Vice-President, Sustainability and External Affairs, Teck Resources Limited

Doug Horswill

Antamina's direct payroll is around 1,200 or 1,300. Virtually all of that is Peruvian. There are two or three ex-pats at the senior levels, and technical people are brought in as necessary. The multiplier effect through indirect and induced employment is probably three to one. There are some imports, some supplies, that are brought from elsewhere, simply because they wouldn't be available in Peru.

Between taxes paid to the central government and the canon I just mentioned, there is a substantial contribution to the Peruvian economy from that operation. There are other mining operations throughout the country. I'm not certain what mining amounts to in the total GNP of Peru, but it is significant.

Chile is a country where we also have operations directly owned and operated by us, whereas Antamina is a separate corporation operated through its own management. We have two mines in Chile that together would employ something in the order of 2,000 people directly. There would be the same kind of multiplier, probably a little bit higher, because Chile's mining sector has a more well-developed network of suppliers. It's a major copper producer in the world, number one, actually. Mining and the sale of resources contribute substantially to their current and long-term economic growth. Overall, our company focuses on building local relationships, business relationships, and other relationships to support development. We don't move ahead without community support, so you build that any way you can.

10:25 a.m.

Conservative

Bob Dechert Mississauga—Erindale, ON

Very good. Thank you.

Mr. Bernier, I understand that Desjardins has started a new credit facility to help farmers in Haiti. I wonder if you could describe that facility and tell us how it will help farmers to become more productive. Could you also give us your assessment of the potential for economic growth in Haiti and how the private sector could play a part in Haiti's reconstruction?

10:25 a.m.

Vice-President, Consulting Expertise, Développement international Desjardins

Yvon Bernier

That's another good question.

The program to implement an agricultural financing and insurance system in Haiti began only a few months ago. That was in response to a request from Haiti's department of agriculture, natural resources and rural development. We responded to it together with the Inter-American Institute for Agricultural Cooperation. The Financière agricole du Québec specializes in crop insurance. We try to ensure, in cooperation with government authorities, that there is a national response there to a national food security problem. We are trying to establish a synergy with stakeholders working in the fields of agricultural input supply and methodologies designed to increase productivity, as well as with others who are establishing commercial channels for local products.

We are managing to get the entire financial sector involved in financing the agricultural sector, not just the microfinance institutions or financial cooperatives, but commercial banks as well. We are providing the banks with training for their credit officers in the methods they must use to analyze a loan portfolio so as to minimize risk.

Then a guarantee fund is constituted. This is a loan portfolio guarantee, of up to approximately 30% of 40% in this case, which provides an additional risk incentive. Haiti is exposed to violent hurricanes and major flooding, in particular. Natural disasters occur there almost repeatedly. We must therefore find mechanisms to control the risk.

Then a crop insurance fund for natural disaster cases should be implemented and become permanent. The idea will be to provide farmers with basic crop insurance. Since we are just starting, it is hard for me to talk about the impact. However, I believe this system should have a leverage effect, result in other investors taking part and increase the funding that for the moment is being generated by the Canadian International Development Agency, but is of interest to the World Bank, which will interest the Inter-American Development Bank.

So there is a spillover effect there. We hope to create a lot more synergy in the agricultural sector and a higher degree of professionalization in agricultural financing. We would also like to manage to innovate in the crop insurance field in a high-risk country. Our activities only started four months ago. We are just at the operational planning stage. It's off to a good start and has been well received.

What was the other part of your question?

10:30 a.m.

Conservative

The Chair Dean Allison

You know what? That's all the time we have. He's just over time.

We'll catch you in the last round.

We have 15 minutes left. I have Mr. Wallace, Mr. Eyking, and Madam Laverdière. I'm going to start with Mr. Eyking, we're going to go to Madame Laverdière, and then we're going to go to Mr. Wallace.