Thank you very much, Chairman Allison.
It's a pleasure to be back in front of this committee. As you know, we represent the broad base of Canadian business, with over 175,000 members.
It is a pleasure to appear before this committee again on Bill C-300. We have resubmitted the presentation that was given by our president and CEO last November. I will not take you through all of that again. Rather, my presentation today will outline the key reasons why our views on this bill have not changed since we last appeared. In fact, we feel more strongly than ever about the harm this bill would cause while at the end of day giving no more protection to people in developing countries where Canadian extractive companies operate.
Bill C-300 would cut off companies from government resources when they are alleged--not proven, but alleged--to have behaved badly and when they most need help. Bill C-300 would leave the situation unresolved. It would leave the alleged parties no better off--and potentially worse off. It would leave the company in no position to take any measures to make things right if that were proven to be necessary. It would leave in tatters the reputation of Canada, the Canadian government, and one of our most important industries and economic contributors.
Also, we cannot ignore the impact of reducing the activities of our large extractive companies on the hundreds of smaller firms that serve them, including some companies that reside in your ridings. With the projects of larger companies curtailed, the spillover impacts on Canada will soon be felt.
Canada is a world leader in the extractive sector, and the Toronto Stock Exchange is the world’s largest mining sector capital market. Bill C-300 would change that. It would drive Canadian extractive companies, the vast majority of which do behave responsibly and are considered to be globally responsible leaders, to move their base of operations outside of Canada.
Their motivation would be not to escape the punitive measures of Bill C-300, but to allow themselves to operate on a level playing field with their international competitors. On this, they know they can compete. On an unlevel playing field, they know they cannot. Competitors will not have to be constantly looking over their shoulders to see where the next accusation is coming from.
Mining is similar to building a new highway across the middle of your hometown. No matter how much it's needed, and no matter how diligent you are in your preparations, there will be a group that will remain bitterly unhappy. And there are anti-mining groups who make hearsay accusations without the needed due diligence.
This bill provides a taxpayer-funded platform for organizations whose existence depends on their ability to make accusations against extractive companies and for those that wish to do mischief to Canadian companies. Our extractive sector companies’ international competitors could use the Bill C-300 process to damage the reputation of our companies and tie up their financing arrangements, as well as delay their entry into new projects and the takeover of existing ones.
Also, if Bill C-300 were passed, many Canadian companies would not take the risk of pursuing new ventures in countries with weak governance. This could be devastating to countries that depend heavily upon the economic contribution of Canada’s extractive companies.
In Africa, for example, Canadian mining companies had more than $19 billion in assets in 2008. These companies contribute many, many, many times more than the Canadian government does. The impact upon this region of the closing down of projects, or even their curtailment, would be hard and swift for the world's most vulnerable.
Canadian companies would also shy away from taking over operations where companies are behaving inappropriately and then bringing them up to international standards. Why would they do so when the prospect of penalties and reputation damage lies before them? And who would lose most? The very people that the bill means to protect.
Sanctions proposed in this bill could be very serious and potentially devastating for Canadian extractive companies and for their employees, both at home and abroad. It would also harm the projects and the people in the developing countries. To be cut off from EDC financing and political risk insurance, as well as being blacklisted for Canada Pension Plan investment, would mean the cancelling of projects and the cutting of jobs.
It is the view of the Canadian Chamber that Canada shows true leadership by working with companies to give them the tools to prevent getting into difficulties and, even more importantly, to continue working with them to help remedy the situation and preserve Canada’s reputation if they do. Cutting and running is not the answer.
Some have alleged that Canadian extractive companies want to cling to the status quo. This is not the case. Canadian extractive companies know the competitive advantage afforded to those with solid reputations for responsible conduct. What this is about is measuring companies internationally by the same existing high performance standards and not putting Canadian companies at a competitive disadvantage.
The standards that were cited by some of the other speakers are good standards. They were developed on an international basis and applied across all companies operating in those countries. They don't target companies from one specific country.
It's also about the reputational and economic harm of the process that invites allegations against Canadian companies without any risk to those who make them.
Bill C-300 is a classic example of a well-intentioned bill that causes massive unintended consequences. Because this bill was written by those who do not understand the extractive sector, it also will not achieve its purpose.
It is our recommendation that you take a step back and look at what should be done. This committee can meaningfully contribute to improving socially responsible behaviour. You can better understand the industry. My understanding is that this committee has not visited even one Canadian mining site in a developing country. You should go to see them. You should find out what's going on.
You could understand and contribute to international CSR guidance tools, such as the updating of the OECD guidelines for multinational enterprises that is under way today. You can review and support more CIDA projects to help build good governance in areas where Canada has mining interests. This would be a significant contribution. You can make sure that the CSR counsellor that was put in place--in part because this bill was tabled and the government responded by putting in place more than what they had originally intended--and the report that's given annually is important, by giving it your priority review each and every year and not forgetting it when you move on to the next thing, and by ensuring that the department provides adequate resources to that office. These measures will make a difference.
As we have said, while it is well-intentioned, Bill C-300 cannot live up to those intentions. It would cause significant harm to Canada's world-leading extractive companies, the broader business community, and Canada's overall reputation and economic competitiveness.
The Canadian Chamber of Commerce asks each of you to vote against this bill.
Thank you.
I would be pleased to answer any of your questions.