For division 3 of part 5, the short title we're using is program transfer. This item relates more specifically to the program transfer of the global agriculture and food security program's private sector window, GAFSP, and the financial mechanisms for climate change facility. This is largely an administrative transfer.
In terms of context, as has already been touched on in previous discussions, for several years the Government of Canada has been exploring how to bring in and leverage private sector financing for international development. There have been a whole series of movements involving different approaches away from purely traditional grants and contributions. This is part of the “billions to trillions” agenda.
In 2010-11 the government engaged with the World Bank's private sector window, the International Finance Corporation, in this area in terms of how to look at bringing in the private sector financing. This led to three agreements that were focused on climate change and food security.
The first is on the financial mechanisms for climate change facility, concessional finance. The second agreement is on the financial mechanisms for climate change facility, the concessional finance and technical assistance agreements, excluding the IFC Catalyst Fund. The third is on the global agriculture and food security program private sector window.
At the time, the Minister of Finance, under the Bretton Woods act, had the ability to make use of equity investments, which was required for these types of agreements. The Department of Finance at that time also had the required expertise in working with equity investments and within private sector financing windows, so the decision was made at that point that the three agreements would be administered by the Department of Finance.
With the launch last year of Canada's new feminist international assistance policy, increased focus is being put on the need to develop mainstream, innovative financing approaches, including with regard to loans and equity investments. This also requires building additional capacity and expertise on how to work in these private sector windows.
At the moment the Minister of Foreign Affairs does not have the necessary authorities to hold equity investments and is therefore unable to administer the three programs in question. As a budget 2017 measure, required legislative changes to the Minister of Foreign Affairs' authorities for the administrative transfer of the programs are being proposed as part of this budget implementation act.
The scope of the proposed legislative changes to the authorities of the Minister of Finance is limited to the transfer of these three programs only for this time. The Department of Finance and Global Affairs Canada officials are considering options with regard to how to potentially consider expanded authorities beyond these programs in order to better facilitate innovative development financing, but that's not being considered as part of this budget implementation act.
Lastly, these legislative changes will not alter, in any substantive way, Canada's relationship with the World Bank or with the IFC.