Thank you, Mr. Chair.
It is my pleasure to join you today to discuss the Development Finance Institution, DFI.
As we all know, in 2015, the international community adopted a new set of global sustainable development goals, or SDGs, to continue to address poverty and inequality. It is always really important to keep in mind that the goal of our new feminist policy, as in the case of sustainable development goals, is to fight poverty.
Those new objectives are based on the idea that all parties and resources related to development must be mobilized. We know that official development assistance has helped generate significant gains over the past few decades. However, it is clear that public sector resources alone will not enable us to reach the sustainable development goals by 2030.
That is where the private sector comes in. It is widely recognized, including in the Addis Ababa Action Agenda, which was developed in 2015, that the private sector is a driver of economic growth. Economic growth also provides greater stability and security in developing countries. The private sector's involvement is key to achieving development results in order to end poverty and inequality.
This is where Canada's new Development Finance Institution can play a key role. G7 countries and many other OECD countries have had DFIs for a number of years to support businesses that want to invest in developing countries. They provide businesses with the funding needed to set up shop and develop commercial activities. That funding is not available from traditional financial service providers.
It has been shown that DFIs, in addition to supporting economic growth in developing countries, could successfully support our international development priorities. In Canada, the consultations we have held on international assistance have indicated that Canadians stakeholders were favourable to more opportunities being available in the country in terms of development finance.
Canada's new Feminist International Assistance Policy also reflects our commitment to working more closely with the private sector.
On May 5 of this year, I joined Prime Minister Trudeau to announce the establishment of Canada's own development finance institute, which will be headquartered in Montreal and operate as a subsidiary of Export Development Canada.
My officials are working closely with EDC to launch the DFl's operations by January 2018. With an initial capitalization of $300 million, the DFI aligns with our new feminist international assistance policy. It will be an important tool to reduce poverty, advance women's empowerment, and foster green, inclusive economic development.
This approach is unique and will distinguish us from other development finance institutions in the world. Its success will be measured by its ability to generate long-term development results while becoming financially self-sustaining over time.
The board of directors will have the experience and expertise needed to help the new DFI deliver on its mandate. The DFI will also be supported by an advisory council that possesses expertise in international development and finance. Moreover, day-to-day operations will be led by a managing director with development financing expertise.
It will draw on a full range of instruments, such as debt, equity, and guarantees. To achieve financial sustainability in a reasonable time frame, it will build a diversified portfolio that balances both risks and returns, to have the greatest impact in the field while ensuring its sustainability.
The DFI will also develop a decision-making framework guided by the government's clear direction to focus its work on high-impact sectors to maximize development opportunities. The DFl's framework will ensure that its impacts are real and measurable.
To do this, we are emphasizing the need to work with small and medium-sized enterprises to reach the poorest and most vulnerable in countries eligible for ODA.
The new institution will prioritize activities in areas such as action on climate change, clean energy, agrifood and infrastructure, including infrastructure related to water management and treatment. Financial services and businesses run by women and young people will also be a priority.
Finally, since the impact of investment on development depends on the success of our projects, the institute will consider the potential for long-term success of every initiative it will support. In some cases, Global Affairs Canada could provide complementary technical assistance to optimize the positive effects on development, especially when it comes to outcomes related to gender equality.
To accelerate its implementation and support business growth, the institute will take advantage of Canada's national networks, including the Canadian Trade Commissioner Service and Export Development Canada's networks.
The last element, but not the least, is that the institute will also adopt a corporate social responsibility framework that will reflect the best practices of other DFIs.
In closing, it's true that the DFI will be a powerful complement to our traditional development efforts, but ODA will continue to be critical to building inclusive and sustainable growth in developing countries. As minister, I want to use Canada's leadership and all other levers at my disposal to leverage more resources for development.
Thank you. Now I am open to questions.
