Canada-China Relations Committee on June 19th, 2023

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Would it be fair to say that FinDev Canada doesn't consider the People's Republic of China as an emerging market, then, but as a mature market?

[Paulo Martelli]

No; it is a developing country. It is an ODA-eligible country, but for now, FinDev Canada is focusing on the countries I mentioned earlier.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Was that decision made at the executive level, or did your board ratify that decision?

[Paulo Martelli]

A strategy was developed and presented to our board of directors. It outlined some of the steps I mentioned in terms of countries of focus. It was discussed and agreed that this would be the approach at this time.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Is that strategy public? Is it a public document?

[Paulo Martelli]

It is not, to my knowledge.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Can it be made a public document? Can you provide it to the committee?

[Paulo Martelli]

I'm not sure if we can. I'd like to confer and see if we can present that.

Mr. Chair, I would like the member to be aware that we aren't starting operations yet in the region, because we don't have the funds and the authorization to do so. We're still at a preparatory and exploratory stage.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

This strategy is supposed to inform how some of these funds would be disbursed, though. At some point, you will obtain them. Is it a question of where you have to go back to the board, or is it a higher, executive-level decision that has to be rendered before this document could potentially be made available to the committee?

[Paulo Martelli]

I'm not sure. I'll have to get back to you. It's an internal strategy document in terms of how we will approach certain markets. We don't generally make those documents public, since it's with regard to our strategy. If we are able to do so, then we'll be happy to submit that to the committee.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Do you not make it public because it would hurt your returns? I thought you were doing ODA projects. I thought you were doing good. I don't see where the harm would be in sharing it with the committee and making it public through the committee.

[Paulo Martelli]

I'd have to confer with my colleagues. I mean, the strategy's there. We invest in the private sector, so there are competitive aspects there. Yes, we are doing good, but we're also participating in a competitive market. We'll have to see if we can go ahead and submit it. We will get back to you on that point.

[The Chair, Liberal, Ken Hardie]

Thank you, Mr. Kmiec.

Now we'll go to Mr. Sidhu for five minutes or less.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you, Mr. Chair, and thank you to our witnesses for joining us here today.

I'm very curious to hear more on the Indo-Pacific strategy and how it fits with FinDev. I know that there are ample opportunities in the region, as it's the fastest-growing region in the world. Canadians expect us to diversify in the region, so I'm really looking forward to hearing more about that.

Ms. Émond or Mr. Martelli, you spoke about operations in Latin America and the Caribbean. You mentioned over 40 clients and helping with climate mitigation and women and economic empowerment. When you look at the Indo-Pacific region, what types of opportunity do you see? I know Canada is a big player in clean tech, and climate mitigation is important. Can you give some examples? I know that you're in the exploratory stages, but can you shed some more light?

[Paulo Martelli]

The two main sectors of opportunity that we see are food security—the agribusiness sector is very important in a number of economies in that region—and also infrastructure, which is obviously quite important in a fast-growing and developing region. We're hoping to make significant investments in that region and help that region grow in those two areas.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you for that.

Ms. Émond, I noticed that you weren't able to finish your opening remarks. Is there something we missed that you may want to take some time to say right now?

[Stéphanie Émond]

Thank you. That's very kind and generous.

I think my final remarks were just starting to describe a bit about our due diligence process, which is really guided by our environmental and social policy. The policy is premised on international good practice from other development finance institutions and multilateral development banks, in particular the IFC performance standards and the United Nations guiding principles on human rights.

Thank you for that opportunity. I'm happy to answer any further questions on that.

[Maninder Sidhu, Liberal, Brampton East, ON]

Yes, please. I know Canadians would love to hear some success stories, whether they're from Latin America or the Caribbean, of FinDev's operations.

Are there some examples you can share of some success stories?

[Stéphanie Émond]

Thank you for the opportunity.

It's relatively early days for us. We're five years old. Our longest transactions are for three or four years of track records. However, one key success factor that we're particularly proud of is enabling clients—private sector businesses—to really enhance their practices, including on gender equality.

We have done a lot of work from the beginning on enabling private sector companies to conduct an initial baseline assessment of how they are doing right now and then identifying opportunities to improve. We have done similar engagements on the environmental and social sides, working with them on action plans so that they can better align with international practices.

We're also very proud of the portfolio that we have built in five years. I shared some of the numbers. A lot of that was done during COVID, remotely, and we're quite proud of having customers from co-operatives who are really trying to extend important financial solutions to low-income and rural populations in Ecuador and to join parties with IDB Invest on the first social bond in Costa Rica, as well as to do a few transactions on our own. Most recently, there was our first transaction in project finance in the Dominican Republic, with Maranatha.

Thanks for the opportunity. We are working to improve our website, but a lot of the information is available on our website, on our portfolio page, and I'm happy to provide more details as needed.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you.

I know it's very important, when I speak to constituents from the Caribbean region in Brampton. We have a large diaspora from the Caribbean region, and fighting climate change is of the utmost importance to them. What can Canada do to help? I think it's important that we be there.

You spoke about gender equality. It's at the forefront of what we do in our foreign policy. I know it's very important to our Prime Minister and to our foreign minister, so we will continue working in the region.

I don't think I have much time left, but I will just say thank you once again for your tremendous work.

[The Chair, Liberal, Ken Hardie]

Thank you, Mr. Sidhu.

We will now go to Mr. Brunelle-Duceppe for two and a half minutes.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

Thank you, Mr. Chair.

Ms. Meyerhoffer, what is the budget of the Office of the Canadian Ombudsperson for Responsible Enterprise? Since the office's inception, how many dollars has the Government of Canada invested in it?

[Sheri Meyerhoffer]

The CORE's budget is around $4.9 million.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

At $5 million per year, that means that $25 million to $30 million have been invested in the office since its creation, and still not a single investigation has been carried out. Okay.

Ms. Émond or Mr. Martelli, what is FinDev Canada's approach in terms of investing in companies operating out of countries considered as authoritarian or under dictatorships? Is it different from your approach to investing in democratic countries, or do you take the same approach when investing in countries under dictatorship?

[Paulo Martelli]

Thank you for the question.

No, the approach is similar. We take a thorough approach to any and every transaction, regardless of country. Obviously, the risks are higher and the work required in some of the more difficult countries is much higher for us, but we take the same approach to all countries.