Foreign Affairs Committee on March 27th, 2007

[The Chair, Conservative, Kevin Sorenson]

Good morning, everyone. Welcome. This is meeting number 46 of the Standing Committee on Foreign Affairs and International Development, for Tuesday, March 27, 2007.

I would like to take this opportunity to remind all members and the witnesses appearing before us that today's committee meeting is televised.

In our first hour this morning we will deal with the main estimates for 2007-08. Appearing before us for her fourth time, we have the Honourable Josée Verner, Minister of International Cooperation. The minister testified before our committee on June 6, October 18, and November 1. So we thank her for allocating her time to this committee and being very generous in doing that.

Our committee has been fairly fortunate, in that we have had ministers appear 10 times before us in the last year, including the Minister of National Defence. Today the minister is accompanied by witnesses from the Canadian International Development Agency. We have Robert Greenhill, the president; Diane Vincent, executive vice-president; as well as Gregory Graham, who is with the human resources and corporate services branch.

Welcome.

In our second hour we will be continuing our study of Afghanistan, but this morning we are looking at the estimates under CIDA. Minister Verner will be speaking on the situation in Afghanistan as well.

So I think the minister understands how this works. We look forward to her opening statements and then we'll go to the first round of questions. Because it is the minister here today, the first round will be 10 minutes.

Madam Minister, welcome.

[Josée Verner, Conservative, Minister of International Cooperation]

Mr. Chair, colleagues, I am pleased to appear before you again to discuss the main estimates as they apply to the Canadian International Development Agency for the fiscal year 2007-2008. I will also be happy to review our activities in Afghanistan and the results we are achieving.

Three members of CIDA's executive team have joined me today. They are: Robert Greenhill, the President of CIDA; Ms. Diane Vincent, Executive Vice-President; and Mr. Greg Graham, Acting Vice-President of Human Resources and Corporate Services.

You will recall that this government has made a commitment to ensuring that Canada's aid programs deliver tangible results, while making effective and efficient use of resources. The main estimates for 2007-2008 include $3.026 billion in budgetary spending for CIDA and a further $22.6 million in non-budgetary investments. Together, these amounts represent a $74.3 million increase over CIDA'S main estimates for the fiscal year now drawing to a close.

As committee members are aware, in last week's budget, the Minister of Finance reiterated the government's commitment to increase spending on international assistance by 8% in 2007-2008 as part of the overall objective to double Canada's international aid between 2001 and 2011. The additional 8% translates into a total increase of $289 million in 2007-2008. These incremental funds are being provided to several departments through the main estimates, including the Department of Foreign Affairs, the RCMP, the International Development Research Centre, as well as CIDA.

The 2007 budget also provides for $315 million in new assistance. Specifically, there will be $200 million in additional aid for the Afghanistan Program and $115 million in funding for a global initiative geared towards the development of a pneumococcal vaccine.

I'm proud that this year's budget places emphasis on both aid effectiveness and increased accountability. Mr. Chairman, this agency's program conforms to a three-point strategy contained in the budget. It sets out to: better target aid dollars; increase aid effectiveness; and improve accountability.

Mr. Chairman, I would like to talk about CIDA's work in Afghanistan, the single largest recipient of Canadian development assistance. Canada's contribution to the reconstruction and development of that country is improving daily life for many thousands of its people. Afghans had borne to the burden of Taliban oppression. Women have been deprived of all their rights.

I would like to remind the committee that we are in Afghanistan at the request of the Afghan government. We are collaborating with 36 other countries. Our actions serve to forge links between security, diplomacy, and development. The efforts of our soldiers, diplomats, and development specialists are bringing about positive change in a very challenging environment.

The Government of Canada has thus far pledged approximately one billion dollars towards the reconstruction of Afghanistan, phased over a 10-year period ending in 2011. As I mentioned earlier, in its last budget, Canada dedicated $200 million to Afghanistan. I wish to be perfectly clear: this is in addition to the $310 million already announced in May 2006. In doing so, Canada has become one of the leading sponsors of bilateral funding in Afghanistan. Between 2001 and 2006-2007, Canada invested almost $600 million towards ensuring the stabilization, development and reconstruction of Afghanistan.

Clearly Afghanistan is a challenging country from the perspectives of security and development. I would like to salute the efforts of our soldiers, diplomats and development officers who are working so hard and so capably. We are making progress, and I would like to refer honourable members to the report that ministers McKay and O'Connor and I recently submitted to Parliament.

Our objectives are to help the people of Afghanistan help themselves towards development, and to strengthen the country's emerging democratic practice. This means enhancing the capacity of the national government and local authorities to offer services throughout the entire country. It also involves finding a way to grant decision-making power to the country's most marginalized people. Already, Canadian aid supports programs run by the Afghans, thereby ensuring local stewardship, accountability and community participation.

I would like to draw your attention toward the main channels of intervention and the results we have achieved over the past year.

One of the cornerstones of rebuilding Afghanistan through the multilateral system has been the Afghanistan Reconstruction Trust Fund (ARTF). The fund is a key mechanism for building the Afghan government's planning capacity, its fiduciary controls, fiscal discipline, accountability and transparency. Canada is among the top five donors to this fund, which contributes through regular salary payments to more than 270,000 civil servants, including 144,000 teachers. This has facilitated the delivery of basic services, particularly in health and education.

The Afghan government is especially proud to report that over 6 million children have returned to school this month, compared to 5.4 million last year. Nearly 35% of these children are girls. This is a major accomplishment, when we consider that, by contrast, there were only 700,000 children in school in 2001—and not one girl among them.

Another solid building block that has exceeded our expectations is the Micro-finance Investment Support Facility for Afghanistan, better known as MISFA. As of January 31, 2007, there were over 300,000 Afghans—three quarters of them women—obtaining small loans and savings services. Each month, the program reaches an average of 10,000 new clients. MISFA has received very positive third-party evaluations and we are proud to be its largest bilateral donor, having invested $56 million since the beginning of the program, including $28 million in the past year alone.

CIDA contributes to save communities by supporting the United Nations Mine Action Service which has brought about, among other achievements: a reduction of almost 20% of known landmine-explosive remnants of war-contaminated areas; a 55% decline in the monthly average number of victims since 2001.

CIDA was one of the first sponsors of the National Area-Based Development Program, which supports communities in governing their own development at the district level. More than 540 recovery projects such as dams, roads, bridges, and irrigation canals have been established, benefiting over two million people.

In terms of the $200 million announced in the 2007 budget, Canada will also support other national initiatives, such as the Afghanistan Reconstruction Trust Fund, MISFA, the National Solidarity Program and the Anti-mine Program for Afghanistan, and will provide support for construction of the Spin Boldak road.

CIDA also supports Canada's bilateral initiatives, in collaboration with a variety of partners. These joint efforts have yielded impressive results. The Alternative Livelihoods Program in northeastern Afghanistan, implemented by the Aga Khan Foundation of Canada in cooperation with the government of Afghanistan, is helping close to 30,000 households in over 200 communities to identify, implement and sustain a wide array of projects that are improving the lives of thousands of Afghan men, women and children.

Yet another example of a bilateral initiative: the International Development and Law Organization has been active in various areas of justice in Afghanistan. This organization has trained 75 prosecutors in juvenile justice, financial and gender crimes, and 90 judges, including 16 women judges, in civil, commercial and criminal law procedure.

Turning to our efforts in Kandahar province, I am happy to say that despite the considerable challenges of operating in southern Afghanistan, we have concrete and encouraging results to report.

We anticipate spending more than $30 million this year, five times more than in 2005-06. One of our top priorities has been to meet the basic needs of Kandaharis. The ongoing CIDA-supported measles vaccination program targets 189,000 children and 10,000 women of child-bearing age. In addition, CIDA funds a vaccination program that is now immunizing 350,000 children under the age of five against the threat of polio. This disease is making a resurgence in Afghanistan; we all know of its terrible consequences.

In further response to the basic needs of the people of Kandahar, CIDA is working alongside UNICEF, which provides vulnerable families with items such as tents and blankets, as well as health and medical supplies. In addition, our Emergency Food Assistance program has distributed over 2,000 metric tons of food to more than 10,000 families.

CIDA is proud to be a trusted partner in the National Solidarity Program, which has been successful in Kandahar and elsewhere in the country. In Kandahar province, it has helped villages to elect 482 community development councils, which have in turn delivered over 440 local development projects. For example, more than 59 kilometres of canals are now available to villagers, 14 bridges have been built or renovated and the road network has been extended by 113 kilometres.

Thanks to this program, villages can determine their development priorities and implement the projects they have identified. Since last August, more than 50 new community development councils have been established.

Mr. Chairman, I am confident you will agree that the details I have just reviewed with you clearly outline the link between our levels of investment in Afghanistan, the practical activities they are moving forward, and the tangible results achieved to date.

I will be pleased to answer the committee's questions now.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Madam Minister.

We'll go into the first round. Mr. Eyking.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you, Mr. Chair.

I thank the minister for coming here today.

I have two questions. My first one is dealing with Afghanistan. The second one is dealing with Africa.

Minister, you talked at great length, and most of your talk today was about Afghanistan and your commitment to Afghanistan. Over the winter we had senators and MPs visiting Afghanistan, and they were not too impressed with the developments that they have seen over there. Last week we had Minister MacKay here, giving us quite an impression that widespread reconstruction is being done in that region.

Yesterday there was an article in the Ottawa Citizen. There was a gentleman named Seth Jones from the RAND Corporation, and he just spent two weeks in Kandahar. He claims that while Kandahar City and the Zhari district are seeing reconstruction, virtually nothing else is taking place in the rest of Kandahar province, especially in the rural areas.

Can you explain the discrepancy between your colleague's statement that there's widespread reconstruction being done in Afghanistan and the comments by this gentleman on the rural areas? That's my first question.

My second question is dealing with Africa. Just recently a report came out from the Senate, under the leadership of Hugh Segal. It was quite critical of CIDA's role in Africa. It also had some very constructive changes that your department should be dealing with as it's trying to deal with the African situation. We made a commitment in Kananaskis a few years ago that the Canadian government was going to really make some constructive changes in Africa. We don't see it mentioned in the budget. When you look at the budget numbers, there's very little left over for us in Africa. We were supposed to double our commitment in Africa over five years, and the budget doesn't seem to reflect that.

Those are my two questions, Minister. Maybe you can answer the first one on Afghanistan, and the second one is the role we would like to see in Africa.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Eyking.

Go ahead, Madam Minister.

[Josée Verner, Conservative, Louis-Saint-Laurent, QC]

I thank you for the question.

As I indicated in my presentation, progress has been made in the province of Kandahar, particularly with the election of a community development council. The National Solidarity Program was also highly successful. The province of Kandahar faces a particular situation with regard to security. As we stabilize some of the areas in the province, we can carry out development work and assist local populations. In those areas where we cannot conduct development work, we at least provide humanitarian assistance.

Our government is investing in Africa. At the G8 Summit last July, the Prime Minister announced that Canada would increase its spending on educational programs in Africa from $100 million to $150 million and invest $450 million by 2016 to, among other things, consolidate health systems.

One of the highlights of the latest budget was the 8% increase in international assistance. The money is there. We will most certainly spend it in the manner announced by Minister Flaherty, by targeting our resources and ensuring that the assistance is provided more effectively.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Madam Minister.

Go ahead, Mr. Eyking. Then Mr. Patry has a question as well.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

I have one more question.

Minister, you didn't really describe enough about the Segal report and the criticisms of your department in the Segal report, especially dealing with the lack of CIDA workers on the ground in Africa and the concentration maybe here in the capital. There were some very constructive criticisms and also ideas on how we should approach Africa differently. You didn't allude too much to that in that answer.

[Josée Verner, Conservative, Louis-Saint-Laurent, QC]

Absolutely. We are studying the report on Africa produced by the Senate. I want to point out that all was not bad in Africa, on the contrary. Among other things, we have seen that Africa has improved its democratic governance and basic health care. There has also been a decline in armed conflicts, an increase in the number of children attending schools, and, according to our figures, growth in the overall economy reaching an average of 5% a year.

Nevertheless, Mr. Chairman, we will review that report. We have already announced that we would work more efficiently and ensure a greater concentration of our resources. It is in that context that we are reviewing the Senate report.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Minister.

Monsieur Patry.

[Bernard Patry, Liberal, Pierrefonds—Dollard, QC]

Thank you very much, Mr. Chairman.

Thank you, Madam Minister, for being with us this morning.

The 2007 budget includes measures to increase the accountability of Canadian international assistance programs. It states, and I quote:

Specifically, this government will examine options to ensure the independent evaluation of our aid program, providing parliamentarians and Canadians with an objective assessment of the results we achieve with our international assistance. […] This government will provide Canadians with reporting on a more frequent basis that is easier to understand, including report cards on our effectiveness in individual countries.

Madam Minister, could you explain how the government intends to conduct an independent evaluation of Canadian international aid? What are the evaluation criteria, tools and methods that will be used to determine the effectiveness of Canadian assistance in recipient countries?

[Josée Verner, Conservative, Louis-Saint-Laurent, QC]

CIDA is already being assessed by external peers, including the OECD. That organization is currently assessing CIDA's performance. This is a periodic review that is done every five years and which was scheduled for 2007. We will also examine how other donor countries operate, in order to be accountable and better measure our performance. We will also consider a number of scenarios. CIDA is already calling on external consultants, for such things as project or program assessment, and we will continue along those lines.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Madam Minister.

We'll move to Madam St-Hilaire.

[Caroline St-Hilaire, Bloc, Longueuil—Pierre-Boucher, QC]

Thank you, Mr. Chairman.

Thank you, Madam Minister, for being with us this morning.

You touched on an issue. In the budget, the Minister of Finance suggested that we better focus on donor countries. What criteria will be used to choose the countries we target?

[Josée Verner, Conservative, Louis-Saint-Laurent, QC]

We will establish a number of criteria. We most certainly want to focus on democratic governance. We want to make sure that Canadian assistance achieves concrete results in such predetermined sectors as, for example, democratic governance and gender equality. We will look at how countries perform. We aim to be among the five largest donor countries.

[Caroline St-Hilaire, Bloc, Longueuil—Pierre-Boucher, QC]

I would like us to look at the budget estimates. It is a bit tedious, but I do have specific questions. I hope someone will be able to assist me.

We often hear about the implementation of programs to fight hunger, malnutrition and disease. I will pass over that because there are many lines. In the 2007-2008 budget, I have noticed that there are substantial cutbacks. For example, grants will be reduced from $10 million to $200,000. Such cutbacks can be seen in a number of areas within the same program.

Are these cutbacks, or has the money been transferred to other programs?

[Josée Verner, Conservative, Louis-Saint-Laurent, QC]

Indeed, we have changed the way the numbers are presented this year. I will let Ms. Vincent answer that.

[Diane Vincent, Executive Vice-President, Canadian International Development Agency]

As the minister has just said, we have, this year, changed the way in which our expenditures are expressed. The layout highlights those who benefit from our contributions, namely, the partner countries, by concentration and category, countries in crisis, regions, multilateral institutions and Canadian partners. This is a transition year which makes it difficult to establish a connection. This new structure will provide us with a better indication of results as they apply to the development aid recipients.

You indicated that there appear to be major changes to certain categories. There are two reasons to explain that. First, this year's budget provides less direct emergency food aid but more humanitarian aid. The amounts are lower in some categories, while they are higher in others.

The second reason is that, with Bill C-48, we can make investments in some areas, including the Global Fund to Fight Aids, turberculosis and malaria. These investments represent $125 million taken from the end-of-year budgets. Since these amounts had already been provided for in Bill C-48, we were able to transfer expenditures to other categories in our regular budget.

This helped to reduce our regular budget. In other words, we had already invested these amounts at the end of the fiscal year, as per Bill C-48. If you would like more details, I could ask our—

[Caroline St-Hilaire, Bloc, Longueuil—Pierre-Boucher, QC]

I know that, through C-48, small amounts could be provided for these programs. However, these are not small amounts, and there is more than one entry: from $93 million to $2 million, and $167 million cut from $227 million. Moreover, it does not always apply to the same type of program. I don't understand.

[Gregory Graham, Vice-President, Human Resources and Corporate Services Branch, Canadian International Development Agency]

The estimates indicate that our planned spending for programming against hunger, malnutrition, and disease is actually declining by approximately $181 million across the various program activities through which that program is administered.

As Madame Vincent mentioned a moment ago, Bill C-48 allowed us to spend about $125 million last October, an amount that was paid to the Global Fund to Fight AIDS, Tuberculosis and Malaria. That $125 million payment was expected originally to be dispersed in fiscal year 2007-08. Now that the payment has already been made, we can reallocate money from that particular program and reinvest it in other programs.

I think the level of effort over a period of a couple of years will be steady, and again, we've been able to reallocate funds to meet other pressing financial priorities confronting the agency.

[Caroline St-Hilaire, Bloc, Longueuil—Pierre-Boucher, QC]

Thank you.

When you refer to encouraging private enterprises, is that through grants or loans?

[Gregory Graham]

You are asking about the incentives. That particular program is a program of contributions and grants, primarily a program of contributions. In principle, as with all government contributions, there is a repayable aspect to the contributions, although frankly, with respect to our contributions, a very small percentage of the contributions is actually repaid.

I'd note that there's roughly a $4.6 million reduction in that program overall, across all the various program activities through which that program is administered. The reduction really reflects the drop in demand for that program. This is a responsive program; we receive applications from private sector firms, and in the past few years we've seen a decline in the number of applications received and a general decline in spending for that program, so again, we have reallocated a bit less than 10% of the budget of that program to meet other priorities in the agency.

[Caroline St-Hilaire, Bloc, Longueuil—Pierre-Boucher, QC]

Minister, you said earlier—and I'm not sure if it was in response to a question—that you would have more employees in the field than in Ottawa. It is true that CIDA is often criticized for having fewer people in the field than they have in their offices, even though those people work very hard, of course.

I would like to know how you intend to meet this very laudable objective.

[Josée Verner, Conservative, Louis-Saint-Laurent, QC]

That was one of the recommendations in the Senate report. A colleague mentioned that earlier.

I can tell you that in Afghanistan, for example, our resources have increased since last year and we are intending to add even more staff there. We will take a close look at the situation and assess the resources required in each country, and we will transfer some branches. Some transfers were made last year to ensure that we have more people in the field. We must also include the locally-hired staff. These people can be of assistance to us.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Madam Minister.

We'll go to the government side. Mr. Goldring is first, and then Mr. Kahn.