Foreign Affairs Committee on Jan. 27th, 2026

[Lori Kerr]

About 7% of the African exposure is in the Francophonie.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

You say that 7% of your portfolio is in francophone countries.

No, that is not the case.

You say that 7% of assistance to Africa is committed to francophone issues.

[The Chair, Liberal, Ahmed Hussen]

Give a brief response, please.

[Lori Kerr]

It's not a target, it's what our portfolio looks like. It's the results of it.

[The Chair, Liberal, Ahmed Hussen]

Thank you very much.

Next, we go to MP Rood. You have five minutes.

[Lianne Rood, Conservative, Middlesex—London, ON]

Thank you very much.

Traditional lenders often pose a problem as a source of capital to the most underdeveloped nations due to how they cannot meet risk criteria. Does FinDev's risk tolerance differ, and how so?

[Lori Kerr]

As a development finance institution, indeed, we have a higher appetite for risk than traditional capital, so we're able to share additional risks with the private sector. Again, as I mentioned, we're looking to provide that bridge. We're looking to show that there are viable investment opportunities on the continent and in the other markets we serve as a demonstration effect to private capital.

[Lianne Rood, Conservative, Middlesex—London, ON]

Has adopting a higher risk tolerance increased opportunities and return, or has it come at a cost?

[Lori Kerr]

Thank you for your question. It's an interesting one.

I don't think it's come at a cost, because this is the business we're in. We're generating income to cover our administrative costs, and there are lots of opportunities. It's a matter of demonstrating, which goes back to one of the underlying questions I think I heard another gentleman talk about in terms of risk perception versus real risks on the continent.

[Lianne Rood, Conservative, Middlesex—London, ON]

Okay. Thank you very much for that clarification.

According to budget 2025, Canada's international assistance budget will be reduced by $2.7 billion over four years. In a section of the budget detailing the comprehensive expenditure review savings for each department, the document indicates that:

As part of these adjustments, there will be reductions in development funding to global health programming, where Canada's contribution has grown disproportionately relative to other similar economies, and to some international [finance] institutions, which receive significant support through other sources, and where Canada's contributions can be leveraged further. Some bilateral development programs will also be refined and adjusted. These changes are expected to re-baseline the International Assistance Envelope to pre-COVID levels.

How, if at all, will FinDev Canada be affected by budget reductions?

[Lori Kerr]

Right now, we're not receiving additional resources on an annual go-forward basis from the government, other than the capital contributions that have been promised before. We get our capital contributions traditionally through the retained earnings of our parent company, Export Development Canada.

Right now, we're living the spirit of the austerity that the government has put forward in our corporate plan.

[Lianne Rood, Conservative, Middlesex—London, ON]

What are the largest revenue-generating projects that FinDev has financed in Africa in the last five years? What cash returns and jobs did they produce on the ground?

[Lori Kerr]

I don't have that data right at my fingertips, but I'd be very happy to provide that afterwards.

[Lianne Rood, Conservative, Middlesex—London, ON]

It would be great if you could provide that. Thank you so much.

Where has FinDev money ended up replacing private lenders or local banks instead of pulling them in? Has there been discussion on changing terms to attract private capital and not crowd it out?

[Lori Kerr]

As we go through our evaluation process to make a loan or an equity investment, we go through a process to make sure that we're not crowding out the private sector because, exactly as you said, we're supposed to be mobilizing them.

We either look to mobilize investment that wouldn't be there without the participation of a development finance institution or we go to where private capital is too leery to go right now. We take that point of crowding out private capital very seriously in the rigorous review process that we go through.

I would say that we're not crowding out.

[Lianne Rood, Conservative, Middlesex—London, ON]

Could you answer how many projects in critical minerals, energy or transport are ready to go? What's the average time to close? What could be done to improve that timeline?

[Lori Kerr]

I don't have the information right at my fingertips. Again, I'd be happy to follow up on that.

Perhaps I'll give just one clarification. At the moment, FinDev Canada doesn't work in the critical minerals sector directly.

[Lianne Rood, Conservative, Middlesex—London, ON]

I'll cede the rest of my time to Mr. Aboultaif.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

I have a quick question.

Do you compete with the private sector or do you work with the private sector? How's the relationship with the private sector as far as FinDev?

[Lori Kerr]

No, we don't compete. Our role is really to facilitate investment, to provide the demonstration effect and to crowd in private investment with the work that we do on our balance sheet as well as with blended finance solutions.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

As part of your mandate, are you meant to make profit or to generate activities?

[Lori Kerr]

It's a dual mandate. We are here to have a measurable, demonstrable development impact in the markets we serve, as well as to be financially self-sustaining.

[The Chair, Liberal, Ahmed Hussen]

We're out of time.

We'll go next to MP Steven Guilbeault.

You have five minutes.

[Steven Guilbeault, Liberal, Laurier—Sainte-Marie, QC]

Mr. Chair, allow me a degree of familiarity, because I had the pleasure to work with Lori Kerr a number of times when I was a minister.

I think it's important for members of the committee to really understand your role. You're not a competitor to the private sector; you're a catalyst. You're a facilitator for investment.

One interesting example you could share with the committee is the initiative that was announced in 2024. One of the things we're hearing from the developing world is about having access to more concessional financing for things that would be otherwise more difficult to finance.

One other thing we hear from developing countries—least-developed countries and small island states—is that as smaller nations, they have more difficulty accessing capital than some of the larger countries in the south, including in Africa.

The initiative you launched in 2024 was a clear response to many of these things. I'm wondering if you could share with us that initiative.

[Lori Kerr]

I can, with pleasure.

The platform you're referring to is called the GAIA climate loan fund. The GAIA fund is a $1.5-billion blended finance platform. FinDev Canada participated. It's the first transaction under the $700-million concessional facility that I had mentioned. We're also working with the Green Climate Fund.

We developed and architected this with a large global bank. Again, it's $1.5 billion. It's to support climate mitigation and adaptation. What's unique about this is that it's 70% focused on adaptation in 20 emerging markets, including 20% in least-developed countries and small island developing states. It's being very intentional around adaptation and resilience and it's being very intentional around the more challenging markets.