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House of Commons Hansard #105 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was edc.

Topics

Export Development ActGovernment Orders

4:10 p.m.

Mississauga South Ontario

Liberal

Paul Szabo LiberalParliamentary Secretary to the Minister of Public Works and Government Services

Mr. Speaker, I am astounded. The member included a lot of platitudes about secretive transparency, no access, arrogance, et cetera. What she did not say, other than that the taxpayer is footing the bill, is that the Export Development Corporation does not cost the Government of Canada anything. In fact it is making money for the taxpayers of Canada. It is making a substantial amount of money after having been set up.

If the member would check www.gc.ca and under government departments look at Export Development Corporation, she would see the financial statements. In fact she would also see EDC's annual report, which I commend to the member to give her some information which she obviously does not have.

Let me list some of the services provided. Under credit insurance there is global comprehensive insurance; export credit insurance; documentary credit insurance; specific transaction insurance. Under financing there is direct loan operations; line of credit operations; note purchase; purchase receivables; leasing; equity project financing; master accounts receivable guarantee; small exporter guarantee framework; North Star Trade Finance Inc.; the Scotia Americas capital equipment program. Under contracting bonding, which I know the member knows all about, there is bid security guarantees; performance security guarantees; bid security insurance; performance security insurance; surety bond reinsurance; direct surety bond support; political risk insurance.

I went out to the lobby and in two minutes I got this information off the web.

Export Development Corporation is a vibrant financial institution that is helping Canadian companies and companies abroad to do export business which creates jobs in Canada. This is not simply a bunch of people who were arbitrarily politically appointed, which the member summarily reduces the entire EDC to. These are financial professionals who are working on behalf of Canada.

Perhaps the member would like to retract or rethink her view of EDC and the platitudes she has put out and put some specifics on the table as to why she has to condemn this thing. Is it just a matter of her sheer ignorance of EDC or is she simply playing politics?

Export Development ActGovernment Orders

4:15 p.m.

Canadian Alliance

Val Meredith Canadian Alliance South Surrey—White Rock—Langley, BC

Mr. Speaker, it is quite interesting that the member had to run out and get some information on it. He has been sitting as a member of parliament for the last however many years and he was not aware of what the EDC is. It is not transparent. It is not open.

If EDC is as successful as the hon. member is saying it is and makes so much money, why is it not in direct competition with the banks? Why is the private sector not doing the job that this government crown corporation is interfering with? The government has stepped out of line once more I would suggest.

The member thinks the Canadian taxpayers should be pleased that honourable people are being appointed. I am not doubting that honourable people are being appointed; I am saying there is a direct correlation with the government of the day, the Prime Minister and the Minister for International Trade by appointing this board. That is not transparent. I would suggest it is not what the Canadian taxpayers want to support.

Let the banks in Canada fund these agencies and companies if it is such a good investment. If they make so much money, let the banks make that money. Let private investors make that money.

I would suggest that if his information is correct, the hon. member has given a reason for the government to get out of the business completely.

Export Development ActGovernment Orders

4:15 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I do know a lot about the EDC because the minister responsible came to my riding and we had a business forum on this. It was one of the most successful export forums that we have had.

I should also point out that the EDC was voted one of the top 100 companies to work for because of its success. The member seems to think if the federal government is successful with the EDC that it has to get out of the business. I do not understand the false logic.

Export Development ActGovernment Orders

4:15 p.m.

Canadian Alliance

Val Meredith Canadian Alliance South Surrey—White Rock—Langley, BC

Mr. Speaker, it does not surprise me that the Liberal member across the way does not understand the logic that sometimes government does not belong in the marketplace competing with the private sector. Perhaps this is just one more case where the government should be handing it over completely to the private sector to finance corporations for external trade. If it is such a good investment, the private sector should be more than willing to make that investment. It does not need the government to be doing it.

Export Development ActGovernment Orders

4:20 p.m.

The Deputy Speaker

Order, please. It is my duty pursuant to Standing Order 38 to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Ottawa—Vanier, Library of Parliament.

Business of the HouseGovernment Orders

October 30th, 2001 / 4:20 p.m.

Liberal

Marlene Catterall Liberal Ottawa West—Nepean, ON

Mr. Speaker, given the likelihood that the debate on this bill may possibly finish before 5.30 p.m., I believe you would find consent for the following motion. I move:

That the recorded divisions scheduled for today at the end of government orders be taken today at 5.30 p.m.

That allows us, if this debate should finish, to proceed to private members' business and then to come to the vote at the time that everybody anticipates.

Business of the HouseGovernment Orders

4:20 p.m.

The Deputy Speaker

Does the House give the chief government whip unanimous consent to propose the motion?

Business of the HouseGovernment Orders

4:20 p.m.

Some hon. members

Agreed.

Business of the HouseGovernment Orders

4:20 p.m.

The Deputy Speaker

Is it the pleasure of the House to adopt the motion?

Business of the HouseGovernment Orders

4:20 p.m.

Some hon. members

Agreed.

(Motion agreed to)

The House resumed consideration of the motion that Bill C-31, an act to amend the Export Development Act and to make consequential amendments to other acts, be read the third time and passed.

Export Development ActGovernment Orders

4:20 p.m.

Bloc

Bernard Bigras Bloc Rosemont—Petite-Patrie, QC

Mr. Speaker, I am pleased to rise today to speak to Bill C-31. As its title indicates, this is a bill to amend the Export Development Act and to make consequential amendments to other acts.

Obviously we can assume that from the moment this bill becomes law it will probably be the last time we discuss what went under the name of Export Development Corporation for many years. This bill proposes a new name, export development Canada.

As my colleagues, the members for Mercier and Joliette, clearly indicated, we will oppose the bill for reasons that are becoming more and more obvious as the debate progresses.

I should remind members that the Bloc Quebecois proposed in committee a number of amendments which, unfortunately, were defeated. We would have liked to see the bill improved or at least to see a number of environmental protection measures included in this bill. We would also have liked the bill to provide for more transparency with regard to the disclosure of information.

Parliamentarians study the way the corporation has had to work and develop in recent years but we are not alone. A number of NGOs, those belonging to the NGO working group on the Export Development Corporation, repeatedly looked at the work the corporation had done in recent years to expand exports and the extent to which funds and aid were given to projects carried out in developing countries.

I can list some of the organizations involved. They include the Canadian Lawyers Association for International Human Rights, the Social Justice Commission of Montreal, the Canadian Council on International Co-operation, the Canadian Labour Congress, Democracy Watch, Development and Peace, Falls Brook Centre, Canadian Friends of Burma, Mining Watch Canada. Many others also considered the potential impact of this bill on aspects of our lives today.

We could debate a number of aspects of the bill, the whole issue of disclosure of information, the place of democracy and human rights, which certain specific organizations in the working group and the standing committee on foreign affairs and human rights considered.

However, my intervention will focus primarily on the environmental framework of the EDC and its involvement, on support for certain projects which the EDC set up or supported in the past, but which also—no point hiding it—violate to some extent a number of environmental parameters Canada and Quebec have debated frequently. These debates naturally concern the funding of projects in developing countries, some aspects of which should have been included in the bill.

The bill is, to say the least, vague, soft and lacking in environmental terms. It is vague as concerns its environmental framework, which, in many ways, is nebulous and inadequate with respect to the need for disclosure of information. I think this should be pointed out.

As for EDC's environmental framework, the objective is far from clear. It is to “implement a simple, clear, and efficient process for reviewing on a timely basis the best available environmental information on projects for which the Corporation's support is sought”.

Through this objective, the EDC is not saying that the purpose of an environmental assessment is to ensure that the projects approved respect the environment and encourage sustainable development. The EDC prefers to qualify its approach in order to give itself some leeway.

Furthermore, the framework is based on two guiding principles. The first is that environmental reviews undertaken by financial institutions to mitigate project risk can help encourage sustainable development by promoting consideration of the environmental benefits and costs of projects in host country jurisdictions.

The end of my sentence, which is included in the bill, is important.

The meaning of this guiding principle from the framework is that consideration will be given to the context in which a project would be carried out and therefore also to the context in which the project is funded.

In certain developing countries, the corporation could be called upon to fund projects which did not respect all the laws, the environmental consensuses, the rules, regulations and environmental values which Canadians and Quebecers have decided are important.

In this regard, I would like to mention one project, although several come to mind. I am thinking of a project funded by the Export Development Corporation. It was criticized for funding and giving $135 million U.S. in support to a mine in Peru. In this particular case, the compensation to the communities affected was clearly inadequate.

The Candu reactors are another very eloquent example. Is it right that while environmentally based social consensuses must be enforced within Canada's borders and prove acceptable, they would not be enforced for certain other projects which, because of less stringent environmental rules, could be implemented?

One must be consistent in politics. A project that would be unacceptable in Canada for environmental reasons should not be acceptable in some developing countries because their environmental rules are not as strict as ours. That is why we, as well as several environmental groups in Canada, have asked that these projects be assessed under the Canadian Environmental Assessment Act. If that were the case, the values and principles that are agreed upon in Canada could be applied to those projects and not only to Canadian projects.

We must realize that the framework used is not the Canadian framework but could be that of a country where environmental rules are not as strict.

The other aspect, which is the second guiding principle, is that the EDC should decline support for projects which, after taking into account the implementation of mitigation measures, are in its opinion likely to cause significant adverse environmental effects that cannot be justified in the circumstances.

We think the first guiding principle clearly illustrates a watering down of the environmental standards that the EDC intends to apply. As I was saying earlier, why is it necessary to specify that it has to be done in the context of the host country? Several EDC projects are in developing countries where environmental standards are not as strict as they are in Quebec and in Canada.

Moreover, need I remind members of this rather eloquent report from the Auditor General of Canada, a special report dealing with its evaluation of the Export Development Corporation, which pointed out that the EDC did not respect its own environmental framework. According to an evaluation by the Auditor General of Canada, and not by opposition members in this House, the environmental effects had not been assessed properly or not at all in 23 out of 25 projects funded by the EDC. The situation is clear. In some cases, the environmental framework is respected but, in other cases, it is not respected at all. I think we must act quickly to correct this problem.

It is wrong to say that the bill we are looking at will remedy the situation. It creates, in a way, a kind of loophole for the government, a dispensation from even having to respect the environmental consensus that has been reached in Canada.

There is another important aspect: the whole matter of preselecting projects. How does the EDC environmental assessment operate?

The first step is to select the projects that will undergo environmental analysis. Right at the start, the corporation eliminates two-thirds of these projects because it does not submit the short term assurance aspect to any type of environmental review whatsoever. This includes short term client account insurance. It protects exporters from any risk of non-payment by purchasers.

For us it is clear that environmental viability is not related to whether or not a project is carried out on the short or the long term.

Then the project is linked to a risk sector. Whether the mining sector, hydroelectric energy, oil or gas, forestry or pulp and paper, the EDC does an influence test. With it, it determines whether it can bring any influence to bear in order to reduce the risks posed by a project. It carries out a detailed environmental review of a project only when it determines that risk and influence constitute factors.

It can be seen that the Export Development Corporation, soon to become export development Canada, possesses by virtue of what I have just stated, a certain discretionary power in determining whether risk and influence constitute factors to be considered. Rather than subjecting every project to the Canadian Environmental Assessment Act, the corporation gives itself the power to conduct this screening.

The decision ought instead to be based solely on potential environmental risk. A number of other institutions classify their environmental assessment requirements according to potential impact on the environment. This is the case in particular with the world export and corporation bank in Australia. The greater the repercussions, the more stringent the examination.

I said that this bill leaves much to be desired. It is vague as regards its environmental framework and inadequate as regards its screening and self-assessment processes.

If the EDC feels that it has some influence, it carries out an environmental assessment based on the promoter's information. A guiding principle of the corporation's frame of reference provides that it will not support a project if it feels that the anticipated positive effects do not justify the potential harmful risks to the environment, in spite of the implementation of mitigation measures.

In her May report, the Auditor General of Canada found that there is no methodology to determine if adverse environmental risks can be justified. This means that a project that would have a negative environmental impact could be approved, based on the interpretation of the assessor and on the information provided by the promoter.

No scientific criteria are used. Therefore, it is no surprise that the auditor general found that, for 23 out of 25 projects that were funded by the EDC, the assessment of the impact on the environment had either not been done properly or not been done at all.

We would have liked to see amendments adopted by the committee. We would have liked to see improvements to this bill, including to subsection 10.1(2), which leaves the corporation totally free to determine its own environmental criteria. This clause says that “The Board shall issue a directive respecting the determination referred to in subsection (1)”.

As we can see, these projects are not governed by Canadian laws. How could we accept that the arguments, proposals and representations of some promoters be taken into consideration and that a kind of discretionary power be granted to the board of directors of a corporation such as the Export Development Corporation, when the Canadian Environmental Assessment Act is, to some extent, a requirement under other bills?

In conclusion, we would have liked to see major changes to this legislation. We would have liked to see some amendments accepted. This would have prevented giving a discretionary power to the EDC's board of directors and letting it determine what is good, what environmental guidelines and what frame of reference are acceptable. We would have liked to see the provisions of the Canadian Environmental Assessment Act implemented.

We deeply regret the fact that even though amendments were presented in committee, the government refused to accept them. Again, I want to thank the NGOs working group on the Export Development Corporation, which I thanked earlier.

Export Development ActGovernment Orders

4:40 p.m.

Liberal

Jim Karygiannis Liberal Scarborough—Agincourt, ON

Mr. Speaker, Canada is a country built on immigrants who have brought with them a wealth of knowledge of business. In my riding, one of the most ethnically diverse ridings in Canada, there are many such people who are engaged in trades.

EDC serves not only people in my riding but all Canadians who require its much needed support. This support must be enhanced. Bill C-31 is long overdue. In addition to Canadians travelling the globe enhancing and promoting Canadian trade there exist many organizations engaged in international trade that make money and employ Canadians. Trade is the engine which makes our country competitive and keeps it a leader in the global economy.

One such individual whom I have known for many years is Mr. Angelo Rapanos, an individual who has travelled the globe on business and has excellent trade credentials worldwide. Mr. Rapanos has done multinational trade deals for Canada worth many millions of dollars. He has created many jobs with the everlasting assistance of EDC.

EDC changes are needed and they are needed now. Which part of the bill does my hon. colleague across the way disagree with? Which part of us wanting to do business and engage our people across the globe does he disagree with?

Export Development ActGovernment Orders

4:40 p.m.

Bloc

Bernard Bigras Bloc Rosemont—Petite-Patrie, QC

Mr. Speaker, I am inclined to think that my colleague opposite did not listen to my speech, as eloquent as it was.

I believe this is one of the most important aspects of this bill. My colleague made a passionate statement that had absolutely nothing to do with my speech.

Is it normal that a Canadian economic development project would be subject to the Canadian Environmental Assessment Act, whereas an export development project outside Canada would not be subject to the CEAA?

That is what is important. We are not against helping small and medium size businesses find new export markets, but we are saying that these projects must comply with the laws that we have passed here in the House.

Export Development ActGovernment Orders

4:40 p.m.

The Deputy Speaker

Is the House ready for the question?

Export Development ActGovernment Orders

4:40 p.m.

Some hon. members

Question

Export Development ActGovernment Orders

4:40 p.m.

The Deputy Speaker

The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?

Export Development ActGovernment Orders

4:45 p.m.

Some hon. members

Agreed.

Export Development ActGovernment Orders

4:45 p.m.

Some hon. members

No.

Export Development ActGovernment Orders

4:45 p.m.

The Deputy Speaker

All those in favour of the motion will please say yea.

Export Development ActGovernment Orders

4:45 p.m.

Some hon. members

Yea.

Export Development ActGovernment Orders

4:45 p.m.

The Deputy Speaker

All those opposed will please say nay.

Export Development ActGovernment Orders

4:45 p.m.

Some hon. members

Nay.

Export Development ActGovernment Orders

4:45 p.m.

The Deputy Speaker

In my opinion the nays have it.

And more than five members having risen:

Export Development ActGovernment Orders

4:45 p.m.

The Deputy Speaker

Accordingly the vote is deferred until 5.30 p.m. today.