Foreign Affairs Committee on March 12th, 2012

[The Chair, Conservative, Dean Allison]

I know I have your vote.

[Some hon. members]

Agreed.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Everybody at this table has voted for themselves.

[The Chair, Conservative, Dean Allison]

You have seven minutes, and then we'll wrap up.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Thank you, Mr. Chair.

Thank you very much for your presentation, and frankly, for the work your bank does around the world. Mr. Williamson and I are Maritimers. Certainly when I travel and see the Scotiabank sign, it makes me smile. I wish you still called it the Bank of Nova Scotia. It sounded better than Scotiabank. You've spent too much time in Toronto. You keep wanting to drop off the “Nova Scotia” part of it.

[Wendy Hannam]

I'm from the east coast too.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

There you go.

In all seriousness, you have done and continue to do admirable work and you should be congratulated for that.

You didn't have a chance to elaborate on the answer that you would have given the University of Ottawa students. When they ask you what microfinance or microcredit is, what's the four-sentence explanation? What are the thresholds? I'm curious to hear how you would define that to a group of university students.

[Wendy Hannam]

The segmentation for us is loans under $2,000 and revenues under $100,000 Canadian.

Practically, what it means is it's a way for very unsophisticated business owners to provide for their families. As I mentioned, they don't have financial statements in almost all cases. When you move up into small business, you start to get a little more sophistication, a little more reporting.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Perhaps I can pick up on a question that Mr. Dechert began with. He was absolutely correct on Haiti, that one of the challenges is that there is no viable land registry system. So if somebody is borrowing money and three people show up with what they pretend to be a deed to the same piece of property, it certainly is not reassuring for some banker.

But other than the obvious property rights or land registry systems or personal property security or some kind of enforceable collateral provision, what are the other challenges you're having in terms of legal structures, for example, judicial corruption? I was in a country some years ago where the judges hadn't been paid for two years. They were living off tips, like workers in the service and hospitality sector. So that is a problem, surely, if one is trying to set up any kind of financial system.

What other challenges have you had, other than property rights?

[Wendy Hannam]

Not specific to Haiti? I think you're—

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Right, generally, in any of your operations?

[Wendy Hannam]

We always joke that we had a branch in Jamaica long before we had one in Toronto. We started as a bank that was financing trade between the east coast and the Caribbean. That's our history. That's our route. We have 120-plus years of experience in developing markets.

Then about 30 years ago we had an opportunity to enter the Mexican market, and some visionary CEOs looked at doing that.

We do a lot of homework and a lot of due diligence before we enter a market. Obviously we are looking at stability of political systems, level of corruption. All those kinds of things have to meet our criteria or we don't enter a market.

After that, if we decide to enter a market, usually it's by acquisition. Then we look at the quality and culture of the company and whether it fits with our culture. If we don't end up with the same values and culture, regardless of whether the company is profitable or not, it's not going to be a good fit.

There's an awful lot of due diligence that's done before we think about entering a market. In our case we've built an expertise in Latin America. There's been a long history in the Caribbean, and now we have a history in Latin America—from Mexico to Peru to Chile, to Colombia last year, Brazil, and Uruguay.

We have a core competency in Spanish now. All of us in head office are learning Spanish as well. Over half of Scotiabank's employees speak Spanish as their first and usually only language, and we have some core competency in Latin American culture.

I was asked at the university why we aren't in Africa, and it's that it takes a massive amount of time, energy, and management attention to learn a market and a culture. For us, it's been Latin America, the Caribbean, and Asia, outside of Canada.

Sorry. That was a long answer to your question.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

That's interesting.

We were told that you're looking at expanding some of the microfinance activities of the bank. I would assume that you'd be looking at those criteria—political stability, etc.—but also a regional context.

[Wendy Hannam]

Yes, exactly. It's the markets that we know. We wouldn't start a business in a new market, just because of all the things I've said.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

I have a final question.

We were told, I think it was ten years ago, that there was a partnership or an effort—I think CIDA was a partner at that time, in Jamaica—around giving women entrepreneurs access to microcredit or microfinance.

Is that something you're trying to pursue?

In developing countries, financial literacy, as you said, is obviously a critical element. But if there are women entrepreneurs, or women who are interested either in their own family context or community context in developing some sort of business operation, surely that would be a pretty important thing to try to encourage.

Are there other activities you're doing with CIDA or other partners, particularly around women entrepreneurs?

[Wendy Hannam]

Not right now.

The one in Jamaica that you mentioned...actually in working with CIDA last year we converted the four branches we had opened in that program into our traditional business model, which I think speaks to the success of the program.

We don't target microfinance programs specifically for women. We target microfinance programs for the general public. A lot of business start-ups and micro-businesses are being started by women. We want to provide financing to anyone who wants to start up a business, which includes over 60% of the cases being women.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

That's interesting.

So over 60% of the microfinance initiatives that you would be undertaking or initiating would be with women as applicants or partners.

[Wendy Hannam]

Yes.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

That's interesting.

Thank you, Mr. Chair.

[The Chair, Conservative, Dean Allison]

Ms. Hannam, thank you very much for taking the time. We apologize for cutting you a little bit short today.

For the members, you have just over 20 minutes.

I'll suspend the meeting and then we'll get back here for the minister right after we're done with the votes.

Thank you once again for being here.

[The Chair, Conservative, Dean Allison]

Pursuant to Standing Order 84(1), the committee is examining the main estimates for 2012-13, as well as a study of the expenditure plans for the department for the fiscal year 2011-12.

I want to welcome Mr. Patel, who is the assistant deputy minister and chief financial officer. Welcome, sir.

We also have the deputy minister, Mr. Rosenberg. Thank you for being here, sir.

We have Minister Baird and we have Minister Diane Ablonczy. Welcome.

Mr. Baird, why don't I turn the floor over to you? I understand you have some opening remarks. Then we'll hear from Minister Ablonczy, and then we'll go through our questions.

Welcome, sir. The floor is yours.

[John Baird, Conservative, Minister of Foreign Affairs]

Thank you very much.

I want to thank you for the opportunity to be with you this afternoon. I will keep my comments short and I will be pleased to answer any questions you may have after.

It has now been almost a year since I took on my new responsibilities as foreign minister.

I last appeared before you in December, and since then many situations around the world have changed, and changed dramatically.

The situation in Syria is of great concern to us all. Canada acted swiftly in condemning the Assad regime's violent attacks against the Syrian people. We imposed a series of sanctions directed at Syria's rulers and their funding sources.

We have also activated a voluntary evacuation of Canadians in Syria, where we have facilitated the departure of literally hundreds of Canadians. During that time, in the month or so to follow, our ambassador stayed in place while the staff was scaled down. The safety of our embassy staff was paramount in our decision to continue operations. Last week we felt the security situation had escalated to a point where we could no longer be comfortable with keeping our staff in Damascus.

The international community continues to stand united with the Syrian people, and while a select few countries chose to obstruct substantial progress in international forums, the Friends of the Syrian People group will be a key forum to delve into the situation even further.

I hope to be travelling to the second of these meetings very shortly.

Make no mistake about it, those who chose to obstruct a resolution on Syria will have the blood of the Syrian people on their hands, and history will be their judge.

In that general neighbourhood, Iran continues to pose a significant threat to not just the region but indeed to the entire planet. I can quell the concerns of the committee by unequivocally stating it is our fundamental belief that every peaceful, diplomatic measure must be taken in this affair.

Sanctions are beginning to have a real effect in the country, and the international community needs to redouble its efforts in this regard.

Our responsibility as parliamentarians and my role as Minister of Foreign Affairs is to represent Canada's fundamental values of freedom, democracy, human rights and the rule of law. We keep these values in mind when judging all situations we are faced with. That will always be the case.

For those who balk at sanctions as a weak tool of change, I can only point to my latest travels. The transformations in Burma are something about which we are all cautiously optimistic. Though we await further reforms by the Burmese government as well as the results of byelections in April, we can't help but be struck by what we are seeing. I urge Burma's president to continue on this course and continue that dialogue with his foreign minister, but I'm also pleased to say that I brought several books detailing our parliamentary democracy at the request of Burma's Speaker.

I am proud to have had the opportunity to be the first Canadian foreign minister to visit Burma, and I must give this committee my assessment of Aung San Suu Kyi. This may be one of the most impressive individuals who I have met in my 15 years in public life. Her commitment to the Burmese people is unwavering and her determination to make a more inclusive, free society is relentless. I am very proud to have presented her with her honorary Canadian citizenship on behalf of the House of Commons and the Government of Canada, which voted unanimously to grant it to her, so thank you.

In closing, I remember my committee appearance last December when I told the committee that Foreign Affairs is becoming more and more an economic portfolio.

As minister, I consider the situation in light of our values but also of our economic interests. We have noticed that these interests are favourably regarded worldwide. The Prime Minister accomplished great things in China, all over the ASEAN area and in Latin America. Canadians can be proud of these accomplishments.

Trade diversification is crucial to our future prosperity. Laying the foundation for these economic programs is largely about the relationships we build. That is fundamental, and that is what I have been striving to achieve.

Laying the foundation for this economic progress is largely about the relationships we build. That is fundamental, and that is what I have been striving to achieve.

Let me finish by saying that almost everyone around this committee table has taken me up on my previous offer for briefings from Foreign Affairs officials. I continue to extend that invitation, now and on an ongoing basis.

I continue to look forward to our solid working relationship. I think we give Canadians hope when they see us working together on this important policy area. My door is always open.

With that, I'm happy to turn it over to my colleague.

[The Chair, Conservative, Dean Allison]

Go ahead, Minister.

[Diane Ablonczy, Conservative, Minister of State of Foreign Affairs (Americas and Consular Affairs)]

Thank you, Mr. Chairman. It is good to be here.

I was in opposition for thirteen years, so I know what that's like. One of the things about being in this position is that I do miss being on committees and interfacing with all of our colleagues from all parties. It's good to be here and to have an opportunity to do that today.

Minister Baird has asked me to support him in two areas: the Americas and consular affairs. I'll begin with a brief overview of our engagement in the Americas.

You're aware, I'm sure, that Prime Minister Harper made the Americas a foreign policy priority in 2007. Four years later I believe we are dynamically engaged and dedicated to a more prosperous, secure, and democratic hemisphere. There have been more than 150 high-level Canadian visits to the region throughout the past four years, including Prime Minister Harper's most recent visit this August. We have more free trade agreements in the Americas than in any other region in the world.

Increasing economic opportunity, though, requires peace and stability. Security and governance challenges in the region pose a direct and indirect threat, not only to residents of the area but to Canada and Canadian interests. We've invested nearly $2 billion in the last three years to improve security and strengthen democratic institutions in the region, through international assistance, multilateral contributions, and security-focused programming.

I think it's important to emphasize, because we're just starting to realize this in the broader Canadian public, that the Americas present tremendous opportunities for Canadians. Our renewed engagement focuses on expanding our commercial and investment ties, as Minister Baird said, with the world, and, in the Americas case, with Brazil especially, and with our existing FTA partners. We want to ensure that Canadian companies benefit from the agreements that have been put together with our partners in the Americas.

We are also planning to build on our multilateral hemispheric efforts to combat transnational organized crime. Our government will continue to support our neighbours to strengthen institutions and build capacity for stability and growth, while sharing our best practices and promoting Canadian values.

I can say from travelling around, and I know Minister Baird will say the same, that the respect for Canada is unbelievable. It's very striking. One of the highlights of this portfolio is to see how well regarded Canada is in the Americas, and I believe around the world.

Colleagues, we're very committed to the Organization of American States. It is the primary multilateral organization in the hemisphere, and it's the only one of which Canada is a member. Our contributions to the Americas come from across government—a whole host of departments, agencies, and crown corporations.

My other mandate is consular affairs. You may know that our government was the very first government to explicitly designate a minister responsible for this area.

Canadians love to travel. In 2010, Canadians made more than 56 million trips out of the country. The vast majority of these trips go off without a hitch, but even with the best preparations, some Canadians do encounter difficulties.

Last year alone, in 2011, more than 228,000 consular cases were opened. Of these, more than 6,700 were distress-related cases. Those included arrest, detentions, deaths, and medical emergencies.

Some consular cases garner considerable public attention, and some of you have been assisted in that, shall we say. But these actually represent less than 1% of the cases that are handled by consular officials across the world.

I should also point out that the past 18 months have really tested our capacity to help our fellow Canadians. There have been some 50 international crises, in 36 countries, in the last year and a half alone. These include crises in Egypt, Libya, and Japan, as well as our voluntary evacuation in Syria, to which Minister Baird just referred.

There is something very helpful that has occurred with respect to these, and that is the recent opening of the Emergency Watch and Response Centre at the Foreign Affairs building here in Ottawa.

Mr. Chairman, your committee might want to take the opportunity to tour this facility. It's state-of-the-art. Before, people who were dealing with evacuations and crises were in the basement, all crammed together. This allows a state-of-the-art facility, which is very impressive.

The centre provides a platform for a coordinated whole-of-government response to emergencies abroad. It's equipped to host not only emergency workers from DFAIT but other federal partner organizations, such as Citizenship and Immigration.

Mr. Chairman, colleagues have conducted outreach activities across Canada and will continue to do that. The purpose of this is to raise awareness of consular services. We want to better ensure that Canadians have the knowledge they need to make informed and responsible decisions before going abroad. At the end of the day, no one else can keep you safe. It's really up to you and the decisions you make.

We have held discussions with stakeholders in the travel industry and with academic institutions. I believe we're building very helpful partnerships that will assist us in providing useful information and advice to travellers and promote a message of prevention.

More than three million Canadians go to Mexico, Cuba, and the Dominican Republic each and every year. We have met with those countries' top government officials on people-to-people issues that are important to Canadian travellers. We feel that building these relationships will help to address systemic consular irritants. It has already proven to contribute to resolution of specific cases.

This type of international engagement has been the first ever preventative citizen-focused outreach, providing a tangible demonstration that the Canadian government does care and is very interested in the safety of Canadians travelling abroad.

Again, I thank you for the opportunity to be here today. Many of you have spoken to me or my office about cases of particular concern to you.

We welcome your questions at this time.

[The Chair, Conservative, Dean Allison]

Thank you, Minister Ablonczy and Mr. Baird.

We're now going to start with the opposition.

Madam Laverdière, seven minutes, please.