Thank you very much for the kind introduction.
My thanks, as well, go to the honourable members for the opportunity to speak with you about the proposal for a Canadian development finance institution.
I am very pleased to have this conversation with you today.
It is I think a terrific mark of the openness of this government that it has decided to reconfirm the proposal for the Canadian development finance institution that was brought forward in the 2015 budget under the previous government, and which has been, as you know, a topic of discussion for some 40 years in development circles in Ottawa. I salute both the government and its predecessor for bringing forward what I believe is a proposition that should receive support from all sides of the political spectrum.
In doing so, I should note that I am speaking in a personal capacity here, rather than on behalf of Scotiabank. The development finance institution proposal is one that I wrote on long before joining Scotiabank six months ago, and one that I will continue to engage on, and I hope to support your process as you go forward in pinning down design considerations on the DFI.
Really, design considerations will be the focus of my remarks today, given that the logic of private-public partnership in development assistance has probably already been well discussed by members of this committee and by members of all parties in the lead-up to this discussion.
I also want to say at the outset that I see the discussion of the Canadian DFI as one that needs to be grounded in a precursor understanding that it is additional to existing official development assistance. ODA is not a substitute, nor is the DFI a substitute for ODA. In fact, we should see them as complements, and, really, the creation of a Canadian DFI should be brought forward in the context of and in conjunction with a scaling up of Canada's development assistance.
At our current ODA levels, trying to do more with less is really a recipe for failing to meet our global obligations. Aid and market financing really do different things. There are some public goods that only aid and public resources can provide, and market financing, either alone or in conjunction with public support, complements those public goods rather than replaces them.
I should also note that the logic of engaging in a public-private partnership for development is driven by some very clear math. That math says that overseas or official development assistance will not be enough. Even if all OECD countries were to meet the 0.7% target of GDP articulated by Lester B. Pearson, total ODA would amount to about $350 billion to $375 billion U.S. per year, when at the same time, good estimates of what is required to reach the sustainable development goals, at a minimum, are around $500 billion additional in financing per year and go upward to around $3 trillion in additional dollars per year, depending on the extent to which you include things such as climate change mitigation and adaptation in your figures.
The need to bring private sector financing into the development process is ineluctable. There is no way to avoid it. ODA cannot be enough. I think the things we need to focus on today are about how we design a potential Canadian development finance institution to be as effective, as complementary, and as additional as possible to the existing work being done by other development finance institutions, and under bilateral and multilateral aid budgets.
Here, I think one of the key things we need to focus on is the need to help direct finance into places where it is currently not going. About 40 to 50 countries in the world receive almost no direct financing in the form of capital or investment from abroad, outside of their resource sectors, so the first objective of a Canadian DFI really is to be focused on catalyzing investment and capital flows into the places where such flows currently don't happen.