Foreign Affairs Committee on May 5th, 2016

[The Chair (Hon. Robert Nault (Kenora, Lib.)), Liberal, Bob Nault]

Colleagues, I'd like to bring this meeting to order.

Pursuant to Standing Order 81(4), we have the main estimates for 2016-17. You have in front of you the whole description of the rationale for our meeting.

To start off, dealing with the estimates, we've invited both Minister Bibeau and Minister Dion to be our guests and our witnesses. The objective of the exercise this afternoon is to have a discussion about the estimates. We'll have opening statements by the ministers, followed by questions from members of the committee.

Without further ado, I want to turn the floor over to Mr. Dion. After his presentation, we'll go right to Ms. Bibeau, and then to questions.

Mr. Dion.

[Stéphane Dion, Liberal, Minister of Foreign Affairs]

Thank you, Mr. Chair.

Thank you for inviting me to here with my colleague, Marie-Claude Bibeau, to discuss the 2016-17 main estimates.

We are accompanied by key senior officials, Peter M. Boehm, deputy minister of international development, and Arun Thangaraj, who has the impressive title of assistant deputy minister and chief financial officer for corporate planning, finance and information technology. In other words, if there is anyone here who knows everything, it's him.

Also with us is Daniel Jean, who will stay on as deputy minister of Foreign Affairs for a bit longer. I am not surprised that the Prime Minister took him away from me to have him closer to him. I look forward with great interest to the work I will do with the next deputy minister assigned to me. I am told he is excellent. His current minister says he is a very talented senior public servant. We will really need him given the wonderful work Mr. Jean did under the previous and the current government.

The exercise we are about to conduct is important. Ms. Bibeau and I will try not to speak for too long so we have the time to consider the budget document, which is essential to the quality of our parliamentary democracy and the transparency we deserve. It is difficult to be transparent in the sense that the document is fairly technical. There are some essential points that I have to clarify and that will facilitate our work, I am sure.

The main estimates represent the department's projected expenditures for the current fiscal year, but I should note here, for the committee, that given the timeline for preparing and tabling the main estimates each year and the proximity of this to the budget speech, most budget announcements will instead flow in the supplementary estimates rather than the main estimates.

We will have plenty of opportunities throughout the year to exercise parliamentary oversight of these expenditures. That said, there are a few key areas I would like to highlight now before turning it over to Minister Bibeau.

The department had a net decrease of its budget of $11.3 million, if you look at these estimates, over the last year's main estimates. That's $11.3 million out of a budget of roughly $1.5 billion. How can this decrease be explained? This is what I will do now.

The decrease is mainly due to the program renewal schedules for both the stabilization and reconstruction task force, START, and the global peace and security fund. These sunsetting programs appear as a drop of $130 million in these main estimates, but new funding was announced in budget 2016. This new funding of $450 million over the next three years to renew the fund will be brought before Parliament as part of the supplementary estimates process. I hope you follow me.

There are also a few other smaller items that account for the differences between this year and last year. These include initiatives related to sunsetting funding for security upgrades and real property projects, as well as other technical adjustments that are contained in these main estimates.

Also, our operations at home and missions abroad, like so many other sectors across our economy, have not been immune to currency fluctuations. As a result, there is an increase of $62 million in the cost of payments made from Canada in foreign currencies and around $40 million for fluctuations affecting payments by our missions abroad.

Taken together, these account for the vast majority of the variance you see in the estimates before you. When looking at the main estimates by program, you will note that there has been a decrease in international security, democratic development, and international development. For the former, this reflects the sunsetting of funding of the START program I just mentioned.

As I mentioned, new funding was announced in budget 2016 and will be sought through the supplementary estimates process. The variance with respect to the international development program reflects the increased demand for humanitarian assistance, and you can see the resulting shift from this program to the humanitarian assistance program.

Madam Bibeau will have more to say about that.

I hope I have anticipated some of your questions and made the document clearer.

Thank you, Mr. Chair.

[The Chair, Liberal, Bob Nault]

Thank you, Mr. Dion.

We'll go to Madam Bibeau.

[Marie-Claude Bibeau, Liberal, Minister of International Development and La Francophonie]

Thank you, Mr. Chair and members of the committee. It is a pleasure to be here today to talk about the main estimates.

I would like to recall that this budget, as Mr. Dion just stated, is always prepared in November. So it does not include the supplementary estimates or new commitments made by our government.

The main estimates include $3.8 billion in grants and contributions, $2.8 billion of which is earmarked for international development and humanitarian assistance programs. These amounts are disbursed through our multilateral and bilateral agreements, and in partnership with well-known and experienced Canadian organizations. A sum of $1 billion is set aside for payments to international organizations.

It should be noted that these main estimates also include all administrative expenditures. That being the case, they do not allow us to focus on what probably interests you the most, namely, official development assistance or the funding envelope for international assistance.

As in the past several years, the main estimates provide initial funding of $5 billion for international assistance. In accordance with our government's priorities, this amount is increased through the course of the year through the supplementary estimates. By way of example and based on interim results, budget 2015 was increased by $270 million. Excluding this additional funding which is still available, budget 2016 provides an additional amount of $256 million over two years.

Moreover, as you know, we are currently reviewing our policies and fiscal framework. Budget 2016 already increases funding for international development starting in 2017, further to the tabling of our five-year plan.

Officially, the budget available for humanitarian assistance is approximately $320 million. Given the global context, however, large amounts are transferred each year from the development assistance budget to the humanitarian assistance budget. In 2015, $480 million was transferred, for a total of $800 million allocated to humanitarian assistance. The review of the fiscal framework will formalize this situation.

There is also the emergency fund. It is an envelope of $200 million, in addition to the residual amount carried over from the previous year, that is set aside to deal with extraordinary humanitarian crises.

It should also be noted that development assistance projects are carried out through various channels and partners. Consider for example the contributions made to major banks and international funds, the calls for proposals to directly address our intervention strategies in targeted countries, and the local initiatives funds administered by our missions abroad.

I would like to provide a brief description of some of the definitions we refer to.

The international assistance envelope, or IAE, is the main planning instrument for international development and humanitarian assistance at the federal government level. It includes expenditures from Global Affairs Canada, the International Development Research Centre, and the international assistance programmed from Finance Canada. It also includes official development assistance, ODA, both eligible and non-ODA-eligible programming—for example, security programs.

The official development assistance, ODA, is a measure and guideline for capturing spending on international development and humanitarian assistance as established by OECD's development assistance committee. It includes expenditures funded from outside the IAE, such as expenditures by the Department of National Defence; Public Health Agency of Canada; Environment and Climate Change Canada; and Immigration, Refugees and Citizenship Canada, as well as funding from Canadian provinces and municipalities.

Based on provisional data, in 2015 Canada ranked eighth of 28 in terms of ODA volume, and fourteenth out of 28 in terms of ODA/GNI ratio, at 0.28%. In 2014 Canada ranked tenth out of 28 in terms of ODA volume, and sixteenth out of 28 in terms of ODA/GNI ratio.

That is an outline of some of the cold numbers and some of the key definitions.

I would like now to very briefly outline some of the development challenges they are addressing and the way in which this connects to my mandate on refocusing our international assistance to support the poorest and the most vulnerable, including the fragile states.

While major gains have been made in reducing extreme poverty around the world in the last two decades, today there still remain over 700 million people who live below the international poverty line of $1.90 a day. Conflicts are becoming more complex and difficult to resolve and are driving levels of forced migration not seen since the Second World War. Worldwide, one in every 122 persons is now either a refugee, internally displaced, or seeking asylum. The humanitarian response system is straining under tremendous pressure.

In the last five years alone, the number of people needing basic life-saving humanitarian assistance has risen from 53 million to over 87 million. Canada is the top humanitarian donor and we remain committed to meeting the needs of those affected by humanitarian crises. Last year Canada provided $800 million in humanitarian assistance. Canada responded to communities affected by conflicts and acute food insecurity in 52 countries, and by natural disasters in 23 countries.

Our government strategy for engagement in Iraq, Syria, Jordan, and Lebanon includes $1.1 billion over three years, of which $840 million is for humanitarian and development assistance. This is the first time Canada is providing multi-year humanitarian assistance. Our recent announcement of $100 million for humanitarian projects in Syria and neighbouring countries is a further testament to this commitment.

When we last met, I outlined at length my priorities for you, as well as speaking about the policy review, which I will be officially announcing next week. I will simply restate my overarching focus on empowering women and girls globally and protecting their rights. As you know, this is not only a goal on its own but is essential for achieving all other goals. Our decisions will be evidence-based. We will focus on effective indicators and sound monitoring so that we can accurately track results, and we will use innovative approaches to make our dollars go further. This includes working with new partners, exploring different funding mechanisms, and ensuring that successful results are replicated and scaled up where appropriate.

Finally, in addressing international development and humanitarian assistance issues, no one political party has a moratorium on good ideas. There is a great deal of experience around this table and I look forward to working with all of you, either as a committee or on an individual basis, on these important issues.

Thank you for your time.

[The Chair, Liberal, Bob Nault]

Thank you very much, Madam Bibeau.

Colleagues, we'll go right to the questions, starting with Mr. Clement for six minutes.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Thank you.

Thank you very much, ministers, for being here, and deputies as well.

What is the status of the consolidation of office presence in Paris?

[Stéphane Dion, Liberal, Saint-Laurent, QC]

I will ask Mr. Thangaraj to provide that information.

[Arun Thangaraj, Assistant Deputy Minister and Chief Financial Officer, Corporate Planning, Finance and Information Technology, Department of Foreign Affairs, Trade and Development]

The Paris project is under way. Considerable design work was done last year. We are using an innovative public-private partnership approach to deliver that project, and the design work is well under way. We've secured approvals from the city on that. To this point it looks as though that will be completed on time and will be successful.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

So it's full steam ahead then.

[Arun Thangaraj]

Yes.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I notice under my list as table 140 there's a significant decrease in the North Atlantic Treaty Organization civil administration budget of about $14 million. Can someone explain that?

[Arun Thangaraj]

That's the assessed contribution for NATO. Those assessments are based on the bills that we anticipate each of those international organizations will provide us at the beginning of the year. Again, that's our initial estimate of NATO's budget. If it gets revised or adjusted because of currency fluctuations, those funds will be sought through the supplementary estimates.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

There's no cutback in services, or anything in that regard.

Minister Dion, you spoke openly and proudly of re-engaging with Iran and reopening, at some point down the line, the embassy in Tehran. Has there been a cost on this endeavour, in terms of costs to Canadian taxpayers, or added costs in terms of protecting our diplomatic personnel in Tehran? Is that included in the increase of the $24 million to implement security projects on missions abroad, or would that be over and above that amount?

[Stéphane Dion, Liberal, Saint-Laurent, QC]

Yes, it would be.

We did not cost it yet, colleague, because we aren't there in our plan to re-engage in Iran.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

There would be supplementary estimates or some other fashion of reporting to Parliament on that.

Madam Minister, one of signature projects of the Conservative government, prior to you, was the initiative on maternal, newborn, and child health. That was designed to accelerate progress on women's and children's health in developing countries. I'm wondering, although you're going through a review of all the projects, is the budget the same for that until the review is done?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

Yes, absolutely. We want to build on the previous MNCH program. I have already explained, the other time, that we want to enlarge it, but women and girls will remain a priority.

You engaged $3.5 million to this whole program. When I came into office, around $3.1 million was already engaged. I've just informed these partners we might have discussions without changing anything, but have a discussion about the range of services they are offering.

This is something we want to build on, improve, and put more focus on.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I appreciate that. Thank you very much.

I have one final question for this round and I ask the ministers this question because I'm not quite sure which budget it is part of.

Your government pledged an additional $2.65 billion by 2020 on a cash basis to address climate change in developing countries. I'm wondering what measures were in place to assess whether the money goes to its intended purpose, so we avoid any corruption issues in some countries. What are the terms and conditions attached to the distributions of these funds?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

We are working in collaboration with the Department of Environment and Climate Change, with Minister McKenna, to design more precisely where we are going to invest this amount of money. Part of it will be through different loans, and another part will be for grants and contributions.

I come back to one of my priorities, which is building on the previous sustainable economic growth. I call it, for now, sustainable and green economic growth, because the idea is to focus on everything related to helping different communities to be more resilient in the face of climate change. It will be focusing on agriculture and the energy sector, for example.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Yes, of course it is very important to report on each project in this process.

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

Yes.

We do go through due diligence before, during, and after each and every project we finance. It's already well established. It's still very important to us, but we are not at that stage for now. We are looking at how we are going to invest this amount of money.

We are still committed to due diligence.

[The Chair, Liberal, Bob Nault]

Thank you, Mr. Clement.

We'll now go to Mr. Sidhu.

[Jati Sidhu, Liberal, Mission—Matsqui—Fraser Canyon, BC]

Thank you Minister Bibeau and Minister Dion, for being here today.

We have Canadians all over the world working as staff in our embassies. Our mission is not to support only our staff, but all Canadians abroad, in their work and travels. These Canadians represent our Canadian perspective in their good work. I understand the security of our people is of the utmost importance to you and your department. I can see some changes in the estimates accordingly.

Can you talk a bit more about the steps that are taken in these estimates to ensure security of our embassies and other Canadians working abroad?

[Stéphane Dion, Liberal, Saint-Laurent, QC]

That is a very crucial issue that you raised. If there is something that may stop my deputy and me from sleeping at night, in addition to the consular cases that you know, it is the security of our men and women who are working for Canada abroad in many difficult conditions. They are very courageous, and we need to do everything to support them.

Mr. Clement mentioned that there is $24 million in the budget plan, new money that is earmarked to implement new security projects and upgrades to our missions abroad. Budget 2010 allocated $450.2 million over seven years, so it will be over in 2017. That means that during the current year, with the Minister of Finance, we need to look at that very carefully, because it is a big concern that we may have.

For now, we are doing a lot. We are doing everything we can. We will see if there is room for improvement; certainly there is. We are investing $152.7 million for the security of the mission security teams, $247.5 million for upgrading the infrastructure, and $49 million for equipment and systems. We will review these measures, information systems, and properties through vigorous risk assessment analysis so that the security of Canada's diplomats is not compromised. That is a top priority.

[Jati Sidhu, Liberal, Mission—Matsqui—Fraser Canyon, BC]

Thank you so much.

Minister Bibeau, you mentioned that there is going to be more funding coming through these estimates. Is there any timeline? When are you coming back with those changes?

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

We are going through the review first to prioritize, to make our choices.

Would you be more precise in your question?