Mr. Speaker, I am pleased to speak on Bill C-31, an act to amend the Export Development Act. The bill would change a few things. It would change the name of the corporation. It would enable the board to delegate its powers and duties to committees it may establish other than the executive committee. It would require some environmental reviews and an environmental process for projects. Also apparently the auditor general would have the ability to audit the design and implementation of the directive established by the board, at least once every five years.
I will examine these issues in more detail. First, in regard to the name I do not think there is anything too serious there. Basically the modification would mean that the corporation would have the same acronym in both English and French. The new name would be Export Development Canada, which I do not think is too earth shattering.
Let us move on to something more substantive, and that is the Canada Account. The Export Development Corporation assists corporations across the country to secure opportunities and orders abroad. Generally those who apply for loan assistance through Export Development Canada need to meet certain financial tests to ensure that they have the ability to repay it, if it is a loan, et cetera.
However, the Canada Account is a political account. Sometimes those applying do not quite meet the test or there are other reasons. I understand the necessity for it because I do believe there is a purpose for it, however, all decisions on the Canada Account are based purely on politics. They are cabinet decisions and are not made by industry or financial experts or at arm's length. None of this is dealt with in the bill. That is something that I think the government should look at. I understand that it is seldom used, primarily for risky ventures. To give an example, the Candu nuclear reactors were under the Canada Account.
However the account has been receiving unfavourable attention in recent years. Two years ago the Canada Account was judged to be illegal by the World Trade Organization. Nonetheless the government says the account has been amended to satisfy the WTO concerns. It has been referred to as a secret slush fund.
The Export Development Corporation makes deals to the tune of $4.5 billion worth of exports each year. It is a significant amount of money. I suggest that we could remove political decision making from the Canada Account and bring back a more accountable process. Of course that is not dealt with in the bill.
Let us move on to the next area. One of the suggested government amendments would enable the board of directors to delegate its powers and duties to committees that it may establish, other than the executive committee. Right now 13 of the 15 board members are appointed by the Minister for International Trade and the other two, the chairman and president, are appointed by the Prime Minister. This appointed board currently formulates EDC policies and practices and I find that somewhat questionable. It is an unelected board, with all 15 appointments made either by the Prime Minister or the Minister for International Trade, and it now wants to delegate its powers and duties to more appointments, to its committees. The EDC board already has incredible power and influence and it now wants to delegate that down even further, so there are some questions that need to be answered.
Patrick Lavelle, the chairman of the EDC, called for more independence for crown corporations and agencies such as the EDC, stating that the objective of naming directors should be to “get the best people, no matter where they come from”. Mr. Lavelle suggested that EDC move toward privatization, noting that there is a culture of secrecy in government bureaucracies. He stated that there is “an inherent believability in federal Crowns that information is power and increasing its release will just generate unwarranted criticism”.
That puts it in a nutshell. This is the chairman of the EDC who is calling for this. Furthermore he is recommending that Prime Minister create a cabinet post that would make one minister responsible for overseeing all crown corporations, with a parliamentary committee established to provide oversight. What it comes down to on these appointments and committees is that the government is proposing legislation to have the board of the EDC, with its 15 appointees, able to appoint other committees, as opposed to actually bringing back more power to parliament. Right now it is very politicized. I think we could do a much better job.
Again, the EDC is a $45 billion a year operation and one of the big issues is the whole issue that seems to surround the EDC: its secrecy, its transparency, its accountability. If there were ever a time that the Export Development Corporation needed to be there it is right now in the current situation where the economy is fragile at best. If there were ever a time when we needed sound, solid management there for Canadian companies and when we needed to make sure that the EDC is not based on politics and that it continues to help the Canadian economy grow, it is now.
That brings me to my next area and that is accountability. There has to be more accountability in this crown corporation, something that is evidently lacking at present. The government agrees that the EDC should “publicly demonstrate its accountability by reflecting the full range of public policy concerns and its activities and should introduce appropriate transparency measures concerning its activities”.
One suggestion that the government has come up with is to propose that the auditor general audit the design and implementation of the directive established by the board, at least once every five years. I believe that accountability has to happen a lot more often than once every five years. Such audits have to happen annually or at the very least every two years. Given the deplorable misuse of taxpayers' money by HRDC, which is still fresh in Canadians' minds, five years is a heck of a long time between audits and things can go askew. I think audits need to happen a lot more often to ensure that we do not have a repeat of that type of activity.
Furthermore, the Export Development Corporation is not covered by the Access to Information Act. That is a huge bone of contention. In the past the corporation has been accused of keeping billions of dollars in loans secret in foreign countries. In its defence, and I understand this, the EDC says it is restricted by business confidentiality but that it encourages its sponsors to release information about its projects. I understand that.
Businesses do want certain aspects of things kept confidential, but in turn these businesses are asking for public money, public assistance. I think that is where we can draw the line. If a company has business practices about which it needs to be that secretive, then maybe it should be looking at other avenues. I think when a business is using taxpayers' money it has to be completely transparent.
A recent study for the federal government found that crown corporations, including the EDC, should be subject to the Access to Information Act, since access laws encourage organizations to be “demonstrably worthy of public trust”.
The study notes that the reasons for crown corporations such as the EDC being excluded from the law are unclear and that an agency should be subject to the law if the government appoints more than half the governing body. The government appoints them all in this case. We are getting the message.
Another big part of the legislation would be to have full environmental assessments on projects to make sure they meet certain standards. The Minister for International Trade insists that:
This Bill will allow Canada to position itself at the forefront of environmental review policy for export credit agencies around the world.
If we are committed to ensuring the environment is protected while carrying out projects in Canada, should the same not hold true when entering into transactions abroad? EDC has had to defend its environmental assessment framework as recently as April 2000 when it was accused of assisting in some of the world's most environmentally damaging projects. In any event, the government's bringing forward of an assessment review is a positive aspect of the legislation.
The real issue for me is accountability and transparency. In May of this year a report of the auditor general gave a failing grade to 24 of 26 projects backed by the Export Development Corporation. To add insult to injury, Export Development Corporation decided it would not make public details of three of the projects judged to have been improperly assessed under the corporation's environmental review process.
A spokesman for the EDC explained that three clients that objected to releasing details of the projects have “good legitimate reasons”. We will never know the details of projects that received failing grades. We will not know even basic information such as the type of product, the cost or which country was involved.
I will be recommending to members of the Progressive Conservative/Democratic Representative caucus that on balance we oppose Bill C-31 because it does not address the issues of accountability and transparency, issues which should be paramount and at the forefront.
We do see a need for Export Development Canada and its projects, even more so at a time like this. However the fact that it is excluded from access to information and is delegating its powers to committees as opposed to bringing them into parliament are real concerns.
The government missed an opportunity to address these important issues. Major concerns about the crown corporation have been out there for years, but the government has chosen merely to change the name and do some tinkering. I give the government credit on environmental assessment, but the fact that it missed the boat on these issues means the bill is not something we can support at this time.