Thank you for having us, first of all.
ODI is very pleased to be here. I am Simon Maxwell. I am formerly lots of things, including director of this institute and, until the election, specialist adviser to a counterpart committee of yours in the British Parliament, the House of Commons international development select committee.
We are really excited about the opportunities this DFI presents for Canada.
ODI has a lot of work on two things which are relevant. The first is what the developing countries want in terms of finance, a program called “The age of choice”, which demonstrates that they are not put off by having multiple offers from different people and that clearly there is a need for capital in developing countries. Another is the future development agencies program, which is also relevant to this, because the question we always ask development agencies is why they are doing what they are doing, and what their comparative advantage is in doing it.
It would be very easy not to have a DFI for Canada. I sometimes think that having a DFI is a kind of virtue-signalling operation by countries, a bit like a computer game where you have to collect a sword, an invisibility cloak, and the elixir of life—and we'll throw in a DFI at the same time. Form has to follow function.
It's been very interesting to read the mandate letter that was sent to Minister Freeland by your Prime Minister when she was appointed, and then to read the new development strategy. It is clear that all the virtues we associate with Canada—your commitment to multilateralism and a rules-based international order, and the huge depth of development expertise you have in Global Affairs Canada but also in IDRC and in the research and NGO communities in Canada—provide you with the basis for having a unique and distinctive voice in the world. That is reflected in the new development strategy: the themes of gender, human dignity, growth, environment, governance, and peace.
If you have that kind of mission, then it is really helpful to have the opportunity of a development finance institute that complements the bilateral program. Being mission-driven, in other words, is really important in thinking about the role of this new institution, even with a relatively small amount of money, $350 million Canadian, and with some constraints around what it can do, because it doesn't look as though it is going to offer very much in the way of concessional finance. However, that combination of loans, loan guarantees, and equity gives you the opportunity to pursue the objectives.
A question we have asked ourselves, and I'm sure you as a committee will ask, is why not just give all the money to the other multilateral institutions. Why not give it especially to the International Finance Corporation of the World Bank, which provides very similar kinds of services? The answer has to be that by using this money you can leverage additional money from your own aid budget and leverage the Canadian private sector.
I think we are on the verge of a new industrial revolution, driven by climate action, by automation, and by the response we have to the crisis of globalization, all of which are going to need a complete rethinking of the way the world economy works, and great investments. The new DFI in Canada helps to leverage Canada's assets in that sphere, and that can only be a good thing. I have more to say about some of the detail, which I'll save for later.
You'll surely know that the U.K. government has made a huge new commitment to Diana Noble's organization, raising its lending ceiling to £6 billion, with the possibility of going even further to £12 billion, therefore on a very different scale from Canada's. It has done that because our development strategy in the U.K. has overlapping priorities with yours but puts growth and jobs absolutely at the centre.
If you read the new aid strategy from the end of 2015 and then through to the bilateral development review that was published at the end of last year, you will see that the British government is really keen on growth and jobs, and therefore the investment in CDC is designed to support that.
Having a clear narrative about why you need this DFI is part of the contribution your committee can make to the future debate in Canada.
Paddy, go ahead.