Evidence of meeting #17 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 countries.
A recording is available from Parliament.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
Are you talking about the African countries? It's important.
Palmer Chair, Public Policy, School of Policy Studies, University of Calgary, As an Individual
They understand that, and that would be true working in any country. I'm not talking about working in Canada, but Canadian companies working in other countries.
This is why I go back to the importance of having the right public policies in place, and the right public policies are not having zero taxes and zero royalties on these extractive resource projects; that's the wrong policy. In fact, it's important that the government get its share of the revenues, and of course with that comes a lot of potential community development if the government handles the money right, as opposed to other things that might happen, which are less happy, let's say, for a country. That's one example.
The regulatory side is also critical, because you can also set up a more transparent system where it's very clear when you do have something that goes wrong and those who are responsible for it have to pay a penalty for their actions, but also the regulatory system can encourage better behaviour by the various actors, the companies that operate in a jurisdiction.
This is the sort of thing we already do in Canada and many industrialized countries, and I think it's very important that developing countries have those kinds of institutions in place as well. The difficulty, of course, is whether they put them in place and how they handle it themselves and the transparency they will put in place. So I think they do have a significant responsibility in doing that, but where we can help is where those countries are willing to try to improve their own public policy capacity, that we try to help along with that, including....
I have a friend who's worked in Pakistan, and he feels that building up think tanks in Pakistan is a good idea because that puts some pressure on the government itself. It goes back to the point of view of transparency in terms of having some third-party evaluation of what a government is doing. I'm not sure how much success he's had yet in Pakistan, but I think that's the sort of concept of public policy capacity that's really important.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
Should we be treating different countries differently in Africa and the countries that one of the members mentioned here today? You have certain countries China's getting into. Of the 50-odd countries that are in Africa, they're all different to a certain extent, but let's zero in on a country like the Congo.
Right now it is dealing with the election, but overall the Congo has vast resources we could tap into and use for our industries. But how do we deal with a country like that, where we would like to invest, but you have the rebels there and you have all this disruption and the terrible things that are happening to females in that country? So how do we go in there as a government? We've already been criticized that we didn't bring enough people there for the elections, but the minister informed me that's all we were invited for. With the private sector and government working together, with a place like Congo, how do we get in there and make money and help them make money but also help them with their structures? Should we be dealing with that country differently from others?
Palmer Chair, Public Policy, School of Policy Studies, University of Calgary, As an Individual
It's hard if you're not going to get reception from the country. I have to admit that of the 18 countries—and that's why I gave you a couple of examples of Guyana and Bulgaria—in some cases the governments are very motivated. They really want to do much better and they're very receptive to start making changes. I think that's where you're going to get the most change occurring.
In those countries where there are other things that are factors that are influencing the way governments behave, it's a much more difficult hill to climb in that situation, because you're not going to get the sort of government that—
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
So you're almost alluding to saying let's work with the countries that are moving forward and maybe that will spill over to the other countries and then kind of—
Palmer Chair, Public Policy, School of Policy Studies, University of Calgary, As an Individual
That's a bit like the tough love approach: if you're not going to be receptive, then we're not going to have much success with our aid and our programs, so we have to be pragmatic and see what's going to work best.
To give you another example, I worked in Egypt at one point, and there the government was not well motivated to make changes, although later on I found out they adopted a number of the recommendations in my report, which absolutely shocked me. It was a very difficult process there because they were not receptive. Especially the finance department was not receptive to anyone coming in and looking at things. They wouldn't give data. Talk about a lack of transparency: they wouldn't even give data. And I wasn't the only one who ever had that experience; several of my colleagues had similar experiences.
The main point is that if a country is not receptive, it's really hard to get over that. The only thing you can do is through leverage. That's why I'm saying if we work in countries, especially where Canada has a significant role, then I think that helps with leverage to a certain extent.
Liberal
Palmer Chair, Public Policy, School of Policy Studies, University of Calgary, As an Individual
Oh, absolutely; it's amazing. My French is imperfect, so I'm not very good in it, but they were often looking for Canadians to work in various French-speaking countries particularly, because there are not that many countries, outside of France, that you can get to work there.
Conservative
The Chair Conservative Dean Allison
Thank you very much.
We're going to start our second round. We will probably get through at least one and a half turns of questioners.
Mr. Wallace, you're up for five minutes, please.
Conservative
Mike Wallace Conservative Burlington, ON
Thank you, Mr. Chair.
I'm going to be sharing my time with my colleague, Ms. Brown. I really have just one question.
The study being undertaken in this committee is the role of the private sector in achieving Canada's international development interests. Since you're a tax expert, professor, let me ask what the Canadian tax system does to support companies that want to be in the development-assistance business. Are there changes that should be made? Do you have any recommendations? Have you given it any thought?
Palmer Chair, Public Policy, School of Policy Studies, University of Calgary, As an Individual
Actually, it's an area I've dealt with a lot in the past.
Canada has a pretty good system for outbound investment in terms of not creating an obstacle for companies trying to make outbound investments. We have many tax treaties, which is important. We also have now tax information exchange treaties that allow companies to avail themselves of the exemption system—for some developing countries or resource-rich countries, those treaties may not exist—so that when any dividends come back from those countries, they will be subject to tax with a tax credit given for any corporate income taxes paid in that jurisdiction.
At this point, from the point of view of trying to make investments abroad, I don't see the tax system being an obstacle at all to doing that. I don't think it's an issue, frankly.
December 13th, 2011 / 9:15 a.m.
Conservative
Conservative
Lois Brown Conservative Newmarket—Aurora, ON
Thank you, Mr. Chairman.
Thank you very much, Mr. Mintz, for being here with us today.
I have a lot of questions, but I'm going to try to condense them.
I'm very interested in your discussion on capacity-building within the countries in which we are trying to see changes take place. I also have been in Ghana, like Mr. Van Kesteren. I know that Ghana has had five elections now in which there has been a transition of administration peacefully. I think those are the kinds of places where we can work and start to see some real changes.
Interestingly enough, I was at a meeting earlier this morning. It was about the will to intervene, with Mr. Dallaire, and included discussion about genocides that take place in countries where there are no capacities. In my view, it's those kinds of things—the lack of capacity-building—that ends with these terrible situations that we see, particularly in Africa.
My question really is, since we can't do everything at once, are there institutions that you think are more important than others that need to be built, whereby Canada could contribute expertise, could contribute the know-how and some of our aid money to see those things happen?
When I was in Ghana, and this is how my question comes about, one of the things they told us was that in Accra they are only just starting to develop a system of addresses; that they really have no ability to send out anything such as a tax bill, because they don't know where people live. And of course people in Benin and Burkino Faso have no capability of building an electoral list, because they have no birth registry and they have no idea who's who. They don't register children before the age of five because they don't know, quite frankly, whether they're going to survive that long.
Do you have any suggestions on what institutions are the foundational institutions on which Canada can have an impact?
Palmer Chair, Public Policy, School of Policy Studies, University of Calgary, As an Individual
It's a great question. In fact, in some ways I'd like to think a little bit more about it and come back with a more fulsome answer. Just thinking off the top of my head, I can think of a number of areas; for example, the quality of the court system, but even statistical agencies and the development of data. Some countries are better than others in doing that, but it's important to have it. There's always a challenge in some countries in trying to work with, let's say, a population that you cannot register, or when you cannot impose, let's say, a personal income tax.
A Belgian friend of mine worked in Côte d'Ivoire. He asked how many taxpayers they had under the personal income tax system, and the minister of finance said he would get that answer in four days, and they showed him a room in which all the files were piled up. This is the idea that computerization just hadn't quite gotten there yet.
That is what I mean by capacity-building. There are very simple things that we take for granted in terms of what we do very well. But they can be built up; that requires a longer-term relationship with a country. That's why I encourage you to think about focus. You're not going to solve every problem in every part of the world, but the zone in which we can really deal with the issues is where we have a presence.
I'd like to see CIDA itself become more like the U.K. agency—I forget its name now—and the Norwegians' and others. They don't just give money; they get some teams themselves to participate and work with certain countries, if they don't go through the World Bank. I think we could pick a few countries that we might like to sponsor ourselves so that it's our brand that's working in those countries.
Conservative
The Chair Conservative Dean Allison
Thank you very much.
I think we may have time for a quick question from Mr. Chisholm. Welcome to the committee.
NDP
Robert Chisholm NDP Dartmouth—Cole Harbour, NS
Thank you very much, Mr. Chairman. I don't know that I've ever asked a quick question.
I am curious about the context of how you and other private sector experts become involved in a country. As you mentioned, the IMF carries a big stick and doesn't hesitate to use it. I'd like to know your experience, in representing Canada or going into countries on behalf of Canada, as to how it happens. Do you know who else is in the country? Do you know whether there is an overall purpose or context? Do you have goals and objectives other than those of your particular project?
Could you comment on that?
Palmer Chair, Public Policy, School of Policy Studies, University of Calgary, As an Individual
It depends on who I'm working with and whatever. If it's a typical mission, there's usually an important conditional loan involved for the country. The IMF or the World Bank works out certain areas in which they would undertake reforms and then they bring in teams to work on the particular things, whether trade reforms, tax reforms, regulatory reforms.... There are various things they would they look at. Then, of course, they try to get teams to come in and work with the country.
The difficulty I always find with these things is that you come in for two weeks, then you leave as an individual, although the IMF and the World Bank itself will have staff or people who work continuously with the country over time, so that they're not just going in and out, unlike the individuals they might bring in.
The other thing is that it's a World Bank and IMF mission, so I go in as a Canadian expert. Usually Canadians are well liked, because we don't presume what the country should be doing. We listen to them, while some experts from other countries tend to just think of their own country and say “you should do what we do”, which is a little different. I think it's very important to understand what the problems are in a country and to think about the appropriate way to move in a certain direction.
That's why I think there is some value for Canada to thinking, when working with some select countries, about how we can actively work in a country, have our own people with our brand as Canadians working in that country, and help strengthen that country. I think there is a role for Canada to do more of that.
And it would be very good for us, in terms of showing our ability to work with many countries. We have the expertise. We have wonderful people who can contribute to the strength of many countries around the world. that is something we should think of in terms of how we can brand it as Canadian, rather than being part of something else that's occurring.
Palmer Chair, Public Policy, School of Policy Studies, University of Calgary, As an Individual
It doesn't, as far as I'm aware.
NDP
Robert Chisholm NDP Dartmouth—Cole Harbour, NS
That is where I'm going; this makes so much sense to me. We have trade offices around the world. To target certain countries would make so much sense.
Palmer Chair, Public Policy, School of Policy Studies, University of Calgary, As an Individual
We have some organizations that go over and they do their things, but I'm not aware of a real concerted Canadian effort, for example, that we're going to help Mongolia develop better policies, better capacity, and everything else, to handle the immense extractive resource sector they now have available to them.
Conservative
The Chair Conservative Dean Allison
Thank you very much. That's all the time we have.
Dr. Mintz, thank you very much for being here today.
Once again, if there are any other things you may have or you may think of and you'd like to send them through to the committee, we'd appreciate that as well. If you send that to the clerk, it will be distributed to the members.
We're going to suspend for a minute. Did you have a quick question?
Conservative
Lois Brown Conservative Newmarket—Aurora, ON
I have a point of order, Mr. Chair. If I may, I would like to put on the record that Canada does focus its aid. We have chosen 20 countries of focus right now that we're working in—