Foreign Affairs Committee on May 21st, 2013

[Jim Cornelius]

To us, you limit the risk by having a clear mandate for poverty reduction in terms of the aid program, and therefore that becomes a screen through which all sorts of interventions can be assessed.

[The Chair, Conservative, Dean Allison]

Thank you very much. Thanks for keeping that short.

We're going to start our second round, which will be five minutes for questions. I think we can get the full round in.

We're going to start with Mr. Van Kesteren for five minutes, please.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Chair.

Thank you for being here.

Somebody mentioned South Sudan. The chair and I travelled to South Sudan. I love South Sudan. I get pumped when I see South Sudan. It's the poorest country in the world, but I get pumped about these people. I think they have the potential to do incredibly great things, and I'll tell you why.

I see people there who are just biting at the bit to get into business, to go to work. There's just this frenzy of activity, but it is such a wretch. They've been fighting for 40 years. They have no infrastructure. There are no lines. If you want electricity, you have to get yourself a generator.

We travelled to a farm, and that's the reason we went, actually, to visit a group of Canadian philanthropists who are trying to introduce modern farming techniques. They import all their food, and yet they have the ability to not only feed themselves but probably feed that whole region. It's incredibly rich.

I'm not telling you anything you don't know, Mr. Cornelius.

When I look at that and I see that incredible opportunity, I get frustrated at the status quo.

I'll tell you why I get frustrated. When we went to Juba, there were lots of cars driving around, but they're all NGOs. The UN had all their trucks flying by, and everything. The government is completely hamstrung because they can't do anything. If they're going to get any money, they have to listen to what these fellows are saying. Yet these people are literally sitting on a gold mine. “There's gold in them thar hills”, and there's copper, but there are no roads and there's no infrastructure.

Maybe I'm a little bit naive, but here's the way I see it. As Canadians, we could help those people. We could help them get into those copper mines and those gold mines. We could introduce them to companies. Here's where international trade comes in. We're going to introduce you to a company, Goldcorp, or something like that. By the way, these fellows are not here for the same reason. They're not here because of humanitarian aid. They're here for profit. But there's going to be a spinoff, and the unguided hand is going to go to work like you would never believe. We could see an infusion of wealth into that country.

Like that NDP farmer and that Reform farmer, I understand there are two opinions here. But doggone it all, we have tried the other method. I haven't travelled as extensively as you have, but I've been to Ghana, for instance, and I've seen projects that don't work and I've seen projects that do work, but inevitably, the private sector has to get involved.

I'm going to tell you one other story, because we're tying this thing all into Foreign Affairs. Turkey is a Muslim country. It's a moderate Muslim country. I think it's the gateway to the Muslim world, and they're involved in aid work, too. They're really successful with other countries. They're not really successful with Christian countries like South Sudan, but they're working within North Sudan. I shouldn't call it North Sudan—Sudan. What an opportunity we could have, as soft powers, if we started to work with Turkey. They have enough oil up there. I think it's the third-largest reserve in the world, and it's just sitting there. The poor people in the north, they have no money because it won't flow that way, and the south....

But if we could work with Canada and Turkey, and get these two countries together, now, see, we're working with CIDA, we're working with International Trade, and we're working with Foreign Affairs. Doesn't that just make a whole lot of sense?

This is one example where we could set the world on fire in a place like Sudan, and I believe we could ultimately change that whole area of Africa. The people are ready and they have everything they need right there at their doorstep, but nobody's exploiting it.

Are we wrong to suggest that, or even to dream that kind of a dream?

[Jim Cornelius]

You're not wrong to dream it. The potential of South Sudan is enormous, both in terms of its agricultural land and its resources. It's critical. The key thing that we've learned over many years, of course, is that the governance structure has to be put in place and the infrastructure has to be put in place. We can give you as many examples of places where there's good land and good resources and lots of companies are involved, and poverty is not reduced because of the governance structure and who captures that wealth. Unless there's good governance put in place to ensure that the benefits go to the whole population—

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Pardon me for interrupting, but if we have some control, if we're going to say, “Listen, we're going to help you, and we're going to help you develop this country. We're going to help you get along with your neighbours...the end goal, but there are going to be strings attached. If this money starts flowing into government coffers, then we're going to stop this thing. And not only are we going to stop this, we're going to stop the development, we're going to stop the...”, doesn't that make sense? If we do this, on the one hand—

[The Chair, Conservative, Dean Allison]

Mr. Van Kesteren, I have to call you on time. That's all the time you have there, sir.

We're going to turn it back over to Madame Laverdière for five minutes, please.

[Hélène Laverdière, NDP, Laurier—Sainte-Marie, QC]

Thank you very much.

As I said during the first hour of the meeting, we firmly believe that this measure would have been worthy of a separate study, instead of being included in an omnibus bill.

To come back to public-private partnerships, something that strikes me very often is that we talk about private companies. When we're talking about private companies, for a lot of people, and notably the government, it seems to be exclusively big Canadian companies.

If we look at the U.S. models for public-private partnerships—and I think the U.S. is a model in the world—they work not only with their national companies but they work with Canadian companies, Australian companies. They don't need to work specifically with Canadian companies.

Also, some aspects we seem to be forgetting or we see as just a kind of spinoff are small and medium-size enterprises in developing countries, which are very often the main motor for growth, far more than a mining company, for example, that comes for a few years and then leaves.

Do you think that working not only with Canadian companies but with companies from around the world, including developing countries—and I'm coming back to your two farmers—would make a difference for the two farmers?

Thank you very much.

[Prof. Lauchlan Munro]

There are a couple of things.

Yes, working with the private sector doesn't necessarily mean working with large multinational corporations. It can mean working with small and medium-size enterprises. It can mean working with co-ops, mutual associations, caisses populaires. That kind of private sector enterprise has deep roots in many parts of this country. Coming from Saskatchewan, I recognize the importance of the co-op movement.

To go back to the previous question from the government side, I think it is largely a question of institutions and governance. It's one thing to allow a mining company into a place, but what happens to the revenue? Are there good financial controls in place in the authority collecting the revenue? Are there regular audits? Is there public scrutiny, through the media, of the accounts? Those sorts of things.

The record of resource-based development is actually a lot less optimistic, sir, than you might think. There's a large amount of literature on a thing called the resource curse. You get too much wealth too fast, and you don't have good ways of spending it, and the money gets stolen or wasted. That's a story we've seen many times before.

I think it's important to do the homework of building institutions and building governance structures in places like South Sudan and elsewhere, so that there's a fighting chance that, whatever revenue comes in, whether it's from mining or anything else, will have a chance of being used well.

As we promote the private sector, big, middle, large, for-profit, cooperative, or whatever, we must also bear in mind those same sorts of lessons. In fact, I would suggest that small-scale agriculture is a very viable way forward for South Sudan, in large part because it creates a lot more jobs than mining ever will.

[Paul Dewar, NDP, Ottawa Centre, ON]

I just want a quick question, Mr. Munro.

You mentioned earlier what you would ask of our committee, so I'm going to turn the table on you and ask a question on the relationship between International Trade and CIDA as we look forward to what's going to happen when things amalgamate.

You were referencing CSR and how that relationship or interplay between CIDA and International Trade could happen. Do you want to just elaborate on that?

[Prof. Lauchlan Munro]

I think I've said my piece on that. The devil is in the details. It can be made to work, especially if it can be made to work in a way that supports poverty reduction, supports sustainable development, promotes Canadian values of the rule of law, democracy, and human rights, which I hope everyone in this room supports. Then I'm sure that clever public servants can design the appropriate bureaucratic mechanisms.

[Paul Dewar, NDP, Ottawa Centre, ON]

I believe you're saying the outcomes would affect our friends at the trade department as much as they would affect everyone else.

[Prof. Lauchlan Munro]

Absolutely.

[The Chair, Conservative, Dean Allison]

Thanks, Paul.

We'll finish up with Ms. Brown.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Thank you very much, Mr. Chair.

I'd like to clarify for people who may be reading these things in the blues and for some of our visitors here that CIDA does indeed work with many organizations, but our money goes to NGOs. I use the example of WUSC who are working in Burkina Faso with Barrick Gold, where WUSC is responsible for providing the programming to ensure that the people who are engaged with WUSC are developing real skills that will be useful in the greater economy.

One of the things that we've talked about today is the long run. I look at this in the long run, and I would suggest that the objective of any development dollar ought to be that we want to work ourselves out of business. That ought to be what we are looking for in the long run. The long run may take two decades. You talked about the curse of resources. What we need to do is to really help these countries take care of these resources in the most efficient way for their own economy.

I was listening to the six o'clock BBC news this morning, and they had a commentary on the Asian tigers who are losing their shine in light of the African lions that are emerging. When you see what these countries are becoming, there is such great opportunity for them. It means for us that working ourselves out of business will really be something we can achieve in our lifetime, and that ought to be our objective.

I had the opportunity to speak two weeks ago at the Canada-Nigeria investment conference at the Royal York Hotel in Toronto. There were over 400 people from Nigeria who were here to look at opportunities for investment from Canada, and there were Canadian companies present at that conference looking for opportunities to invest in Nigeria. So it's going both ways. Development is very different today than it was in the 1950s, when many of these humanitarian organizations were set up, so we have the opportunity to make some changes.

A week ago Friday, both the Chair and I were fortunate to have the opportunity to speak at the North-South Institute, which is looking at new development opportunities for companies in both Canada and Africa to see these economies grow and emerge. I simply think there's great hope there, I really do.

When we look at what we are doing to merge our development dollars with our foreign affairs policy.... I guess, Mr. Munro, the first thing I would ask you is whether you think in the long run that Canadian values are going to change. We've talked about freedom, democracy, human rights, and the rule of law. Do you think those values are going to change, and do you see there is the potential within another government administration to change those values and what we're trying to do in development, in the long run?

[Prof. Lauchlan Munro]

I would like to be able to agree with you that those are Canadian values, but the only legislated definition of Canadian values that I know of is in the Official Development Assistance Accountability Act, section 3:

“Canadian values” means, amongst others, values of global citizenship, equity and environmental sustainability.

Ironically enough, that definition of Canadian values was provided as an amendment by the Bloc Québécois. I was present when that definition was moved.

[Some voices]

Oh!

[Lois Brown, Conservative, Newmarket—Aurora, ON]

But if we are signatory to that piece of legislation—

[Prof. Lauchlan Munro]

Well, Parliament has adopted that piece of legislation. That's the only legislated definition of Canadian values that I know of. But I would agree with you that democracy, human rights, justice, and the rule of law are fundamental Canadian values that I hope everyone in this room agrees on, and that they would be relatively enduring.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

In other words, these two pieces of legislation work in tandem, because we already agree to the development part of that.

[Prof. Lauchlan Munro]

As I said before, I'm not entirely convinced they work so well together. Certainly, this government talks about democracy, freedom, human rights, rule of law—and I see opposition heads nodding in agreement—but that's not what's in the legislation.

[The Chair, Conservative, Dean Allison]

That's all the time we have.

To our witnesses, thank you very much for the discussion today. We appreciate it.

With that, I'm going to adjourn the meeting.

Thank you.