Foreign Affairs Committee on May 30th, 2019

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

There has been one in the past, so I'm just wondering what is the most recent annual report of export and import permits that's been tabled in the House.

[Mark Gwozdecky]

I'd be happy to provide that answer to you.

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

Thank you very much.

Could you give me an idea of the annual value of our export of military goods?

[Mark Gwozdecky]

I'll also have to provide that answer to you later.

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

Perfect. That would be fantastic.

With that, could you tell me the number, approximately, of permits that are applied for every year?

[Mark Gwozdecky]

We'll certainly provide that to you later on.

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

Then, could you also give me an idea of the number that are approved and the average time frame for approval?

[Mark Gwozdecky]

Yes.

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

The reason I asked that is because obviously our defence industry is critical to our sovereignty and our security. Being a small country of 37 million, our defence industry has about 80% of its revenue driven from exports, not from sales specifically to the Canadian government and in support of the Canadian Forces. So export permits, obviously, are fundamentally important to that revenue, and the numbers from 2016 were that it's over a billion dollars annually.

What I understand is that there has been a significant increase in approval times for export permits, even to those countries that are on the automatic firearms country control list and are even NATO allies. Our defence industry is suffering at the moment because of this increase in the time frame it takes to have these export permits approved.

I'm wondering if you could give me an idea of why there is an increase, and if there has been any kind of policy or delegation of authority approval change in the process in the last three or four years.

[Mark Gwozdecky]

I'm not aware of any change in the approval process or any delegated authority that is different from previous years, but I'd be very happy to provide additional detail later.

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

That would be really fantastic if you could.

My understanding is that the practice within the ministry is that many of those routine export permits could be approved at the public servant level for the countries that are on the AFCCL. However, now it appears that for NATO countries, and even for countries on that AFCCL, it needs to go personally to have the minister sign off on it. That could perhaps be a result, then, in terms of the delay.

Can you comment on that?

[Mark Gwozdecky]

I don't believe there's been any change in that practice.

The vast majority of all decisions are taken at the officials level when they adhere to our policy. A very, very small number go to ministers. However, I will validate that statement for you. I do not believe there's been any change in that practice.

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

All right.

That's critically important, and if you could provide that information....

Obviously, we would like to understand the result of this additional time frame delay, even the fact that it's jeopardizing certain contracts and these companies' ability to deliver on these contracts that they've entered into. It's also what we can perhaps advise companies to do to mitigate that risk, but also what we, as elected officials, can advocate for to support the department in terms of being able to process these permits more quickly.

Could you give us any idea of what perhaps could be some of the challenges, and some of the things we might be able to help you with?

[Mark Gwozdecky]

As I say, I believe that the practice remains the same as it has been in many years.

The only difference that we are now engaged with is our adherence to the Arms Trade Treaty, which will embed the criteria of this international treaty in our decision-making processes. However, the fact that we are and will adhere to the Arms Trade Treaty doesn't mean that we will suddenly start not issuing export permits.

We will provide you with data on exactly what the state of play is on that, but as I say, there has been no change, to my knowledge, in the practice of how decisions are made.

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

I would appreciate it if we could have data over a five- or six-year period, so we can see the change in that.

Thank you very much.

[The Chair, Liberal, Michael Levitt]

I thank colleagues for providing me with some time in the last question to focus on an area that's a particular interest of mine, and I know of all members of this committee: Canada's Arctic sovereignty. Challenges are emerging in the Arctic, and in the north, in part as a result of climate change and shifting geopolitics. Our committee had the opportunity to visit four communities in the Arctic, in October of last year.

The main estimates include a vote of $6.13 million, related to enhancing Canada's global Arctic leadership. Measures under the new funding initiative include enhancing indigenous and northern peoples' participation in international Arctic initiatives. Our recent report on Canada's Arctic sovereignty focused on recommendations that the Government of Canada should provide stable and long-term funding to the Canadian permanent participants in the Arctic Council.

What other Arctic funding is included in the estimates? How do these initiatives respond to the issues raised in the committee's recent report on the Arctic, which expressed a dual vision of nation-building at home, as well as remaining vigilant, in terms of the geopolitical issues emerging up there?

[Troy Lulashnyk]

Thanks very much. I'll take the question, and my colleagues can jump in as required.

As you very rightly point out, the Arctic is an area of critical importance to us, and extraordinarily vulnerable as well. I think it's a very positive development that the budget did provide additional funding to fulfill a number of those areas where we needed to work. Sustainable development was one of them. You mentioned ensuring the permanent participation of the indigenous organizations, so that we have a very inclusive process as we go forward in developing our approach and strategy.

Part of the money will go to a permanent secretariat for the sustainable development working group. We also have money to engage and support youth in the region, so that's a big step, and will help us. There's also money to engage UArctic, which is a sort of consortium of universities and institutes that will really help us build structure and intellectual foundations, as we go forward.

I'd also mention that we're renewing the Arctic policy framework. This is all with a view to an inclusive process where we engage northerners first, indigenous groups and all levels of government in order to militate toward a really sound basis for our strategy. As you said, climate change is presenting a very real threat to us in that region, which is disproportionately affected by what is happening. All of these efforts are meant to buttress and support how we can move securely into the future.

[The Chair, Liberal, Michael Levitt]

Mr. Gwozdecky, do you have anything to add on the broader vision? Okay.

MP Sidhu, you're up next. There are about two and a half minutes left, if you would like to finish up.

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

Thank you, Mr. Chair. I'll share my time if there's any left.

I have a general question on the budget—on the operating expenditure. The budget is around six figures, and the expenditures around $2 billion. How do you come up with that? Is it based on the previous year's expenditures?

I'm asking the question because World Vision and Red Cross spend about 80% of their budget on their management fees, and people have that concern. I'm concerned about $2 billion. I'm not challenging it, but I need to know the procedure.

[Arun Thangaraj]

Our operating budget is based on a number of factors. One, we're unique in federal departments because we're in 110 or 111 countries. We have 174 missions. You have, in that operating budget, a very significant percentage of operating costs that are very much fixed, and determined by leases, utility bills and all those things. Those are essentially just the fixed operating costs of the organization.

In terms of how we arrive at the remaining budget, it really is based on a program analysis. We look, program by program, at what the cost is to deliver that, whether it be a development program or a diplomacy program. We look at the level of IT support required, and if there are specific IT applications there. We also look at the human resources required for that.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

There's that famous expression, “Give a man a fish, he could eat for a day. Teach a man to fish, he can eat for a lifetime”.

I'm wondering if any one of you could comment on the capacity-building that's done in different countries when Canada invests.

[The Chair, Liberal, Michael Levitt]

It's going to have to be a very brief answer because we're right at the end of time. I know it's a big question.

[Mark Gwozdecky]

We certainly adhere to that concept of training and capacity-building. This is why we are a government that no longer engages in any significant amount of infrastructure building, for example, because that would not be focused on building up the capabilities. We have any number of programs across the department that address capacity and training needs. The vast majority of the things we do are aimed in that direction.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

[The Chair, Liberal, Michael Levitt]

I want to thank our officials for being here this morning, providing answers. A couple of items were requested for follow up, so please submit them to the clerk.

With that that we now have to call the votes required to complete the committee's consideration of the main estimates.

DEPARTMENT OF FOREIGN AFFAIRS, TRADE AND DEVELOPMENT

Vote 1—Operating expenditures..........$1,743,383,063

Vote 5—Capital expenditures..........$103,090,143

Vote 10—Grants and contributions..........$4,191,984,964

Vote 15—Payments, in respect of pension, insurance and social security programs or other arrangements for employees locally engaged outside of Canada, or in respect of the administration of such programs or arrangements..........$68,874,000

Vote 30—Administration of new free trade agreement measures and steel safeguards..........$11,446,936

Vote 35—Protecting Canada’s National Security..........$1,252,387

Vote 40—Protecting Democracy..........$716,099

Vote 45—Renewing Canada's Middle East Strategy..........$250,000,000

Vote 50—Enhancing Canada's Global Arctic Leadership..........$6,133,109

(Votes 1, 5, 10, 15, 30, 35, 40, 45, and 50 agreed to on division)

INTERNATIONAL DEVELOPMENT RESEARCH CENTRE

Vote 1—Payments to the Centre..........$142,907,117

(Vote 1 agreed to on division)

INTERNATIONAL JOINT COMMISSION (CANADIAN SECTION)

Vote 1—Program expenditures..........$9,726,454

(Vote 1 agreed to on division)

Shall I report the votes on the main estimates, less the amounts voted in interim supply, to the House?