Mr. Speaker, I am pleased to speak today to Bill C-31, the amendments to the Export Development Act. As the parliamentary secretary laid out, I do recognize that this has been a lengthy process. The process of review, consultation, surveys and other research that has gone into the background leading up to these amendments has certainly been a longer process than many of us have been involved in before. I have only been involved in this portfolio since June of this year so there is a lot to catch up to.
What I can say is that very clearly a consensus was developed on some of the needs that required addressing and they deal primarily with the issue of transparency and environmental and social standards. It is important to recognize what is the mandate of the Export Development Corporation. It is a commercial financial institution, the mandate of which is to support and develop directly or indirectly Canada's export trade and Canadian capacity to engage in that trade and to respond to international business opportunities. That public policy mandate is what makes EDC different from our commercial financial institutions.
As a result of all the consultations and input from various parties, we now have what is called an environmental review framework, which is built in as part of the mandate of the Export Development Corporation. It is to review on a timely basis the best available environmental information on projects for which EDC support is sought.
One thing that is clear is that EDC borrowed significantly from the World Bank group in regard to this. There is some background on this from the standpoint that very clearly the World Bank screens projects for their risk and impact and then categorizes them for their level of potential impact. It then provides reasonable public transparency for those projects that pose the greatest potential for environmental impact. The environmental review framework for EDC resembles that kind of background.
On the basis of looking at it historically over a 12 year period, I found it very interesting that something in the order of 13% of World Bank projects fall into category A, which requires a full environmental assessment. Thirty-five per cent fit into category B. The bulk of the World Bank's portfolio, just over 50%, was deemed to have no environmental impact and therefore required no environmental analysis. This is the proper way to direct ourselves because obviously every project or every finance opportunity does not lead to the same degree of environmental concern. It will be interesting to track the EDC experience over time and see how close it comes to reflecting what has happened over the last 12 years with the World Bank group.
There are ongoing discussions at the Organisation for Economic Co-operation and Development. It is likely to strengthen environmental considerations in its risk assessment practices for export development and export credit agencies and would like to pursue a multilateral approach. This is all very beneficial.
There is a very high degree of desire from the people who have appeared for consultations that the Export Development Corporation demonstrate responsible behaviour. In a sense it is a representative of the Canadian government and Canadian social and environmental practices, policies and values. One of the things that became very clear is that we have had no environmental mandate for EDC up to now. Although there has been some recognition within EDC and it has changed its behaviour, there really were some quite inappropriate measures or financing packages. Interestingly a lot of them seem to revolve around our financing of dams around the world. They involve not just environmental impacts but huge social impacts, having to do with indigenous people or long term communities sometimes being uprooted, and a lot of other untoward circumstances.
The government has argued at times that EDC was only a minor player and therefore whether it entered into those packages or not was not all that significant, but it was significant. I think it is important to recognize that in the same way Canada has some moral high ground in terms of its participation in the United Nations peacekeeping operations, often being the first to be asked because once it commits that is the catalyst for others to commit, the same argument could be used for EDC on some of these environmental issues. It is important that we have an environmental conscience, an environmental strategy, and that it is part of the decision making process.
The other thing that became very clear in the consultations and the responses to the proposed legislation is that people retain a residual concern, which is that there is nothing to prevent the Export Development Corporation under this legislation from revising its environmental review framework if it deems circumstances to be such that this is the appropriate thing to do. Many people wanted it to be more binding than that.
The Export Development Corporation's argument is, of course, that it needs flexibility and there are industry participants and stakeholders as well who are obviously concerned about any insecurity of arrangements that might result if something could be an impediment to making a binding arrangement.
All of those things require a degree of balance that leads me to think that although we have an environmental review framework right now that is considered to be progressive, we will see further changes. There will be pressure for further changes and it remains to be seen whether this will be workable without having it more binding in terms of the statutory requirement to have environmental assessments where appropriate.
I find it highly ironic that these amendments were tabled on September 20, during our first week back in this fall session, when just three weeks earlier on August 30, just before the long weekend, a very good time to announce something if we do not really want people paying attention to it, the minister appointed professional Liberal Bernard Boudreau to the Export Development Corporation.
I said at the time that we have a crown corporation attempting to operate at arm's length from government, and that is the stated objective of its mandate and the stated objective of government, yet appointed to head it is a long favoured friend of the government, appointed previously by the Minister of Finance to the Bank of Canada in 1998, appointed by the Prime Minister to the Senate in 1999 and appointed by the Prime Minister as the Minister of State for ACOA in 1999. This individual then resigned from the Senate in 2000 to run for the House of Commons and was defeated in November 2000. My point is that the independence of our crown corporations is made a mockery of by the moves of their political masters on the Liberal side.
In discussions with officials from EDC, I know how to read between the lines. This is not good for morale. It is embarrassing for professional employees of our crown corporations when these things happen. The only justification that has ever been offered is that because they are at arm's length and the government wants to retain some influence, the only way it can see to do so is through appointments of its people.
I find this completely unacceptable. I think the professionals who operate within this environment find it unacceptable but are compromised in their ability to say so. It is time for this type of behaviour to stop.
We have a living example with Canada Post. It is portrayed by the government as an independent crown corporation. It has the most blatant political patronage when it comes to filling the post of head of Canada Post, a very lucrative position and one which would be well sought after by very qualified people from the private sector. Yet we get political appointments in that very visible, high profile position as well.
We need to change that. It does not make Canada look good in the international community. Basically it is saying that the government wants it both ways. It lessens our stature domestically and internationally.
Another aspect to the Export Development Corporation which I would like to refer to is that there are two accounts within the Export Development Corporation. There is the EDC corporate account where admittedly the vast majority of EDC's business is conducted and there is this thing called the Canada account. Reading EDC's own information from its corporate communications department, it states:
Canada account is used to support export transactions that are determined to be in the national interest. They are negotiated, executed and administered by EDC but the risks are assumed by the federal government.
Negotiated, executed and administered by EDC is the operative statement. I wish I could witness that this were true but we have all seen very clearly that the Canada account has become a slush fund for Liberal ministers. It gets disbursed under the cloak of being arm's length business of the EDC and it simply is not in many instances.
This year for example EDC provided $3.7 billion in loans to two U.S. airlines to buy Bombardier jets. In the first instance the Minister of Industry made the announcement, basically barging in on the Minister for International Trade's territory. At the time he said it was a one time deal. Then just months later the Minister for International Trade followed up with a second announcement.
The first one I believe was Northwest Air and the second was Air Wisconsin. The first deal was $2.6 billion and the second was $1.7 billion. These loan guarantees were to offset competition from Embraer from Brazil.
We said at the time that this was inappropriate, that there were other mechanisms, other avenues open to us. We had a four year fight at WTO. We won the subsidy argument and we had $344 million worth of tariffs that we could apply as a penalty against Brazilian imports on this corporate jet subsidy argument. Rather than strengthening WTO and following its judgments, we basically taunted WTO by going in direct competition with further subsidies. This puts our taxpayers at risk, both on the loan and because we are running the risk that WTO will find that to be unacceptable behaviour.
This is all at a time when Canada has a strong vested interest in rules based trade. We have one of the strongest requirements of any country for strengthening WTO, not weakening it. As a small country with a large dependency on trade--