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.


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11:30 a.m.


Peter Stoffer NDP Sackville—Musquodoboit Valley—Eastern Shore, NS

Mr. Speaker, I do not want to rain on anyone's parade but we do have a serious concern in Labrador with the Indian people at Davis Inlet. I know the minister is listening.

Will the member reflect upon what we can do as a parliament to improve the lives of the Indian people in Labrador, to increase their standards especially in regard to the economy and to becoming more of a player in the politics of Newfoundland and Labrador?

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11:30 a.m.

Progressive Conservative

Loyola Hearn Progressive Conservative St. John's West, NL

Mr. Speaker, that is an extremely important question. Two great races, the Innu and the Inuit, cover most of Labrador. They are in Davis Inlet and many other areas.

One of the things we have tried to do with a lot of these people is to show them how to do it our way. We should be asking them how they would like to live their lives with their own leadership, under their own direction and with some help and encouragement rather than trying to force our way of life upon them.

If we set the example then perhaps we would see changes in attitudes. They could make a good living for themselves rather than try to depend upon the directions we set. The potential is there. Leadership is what we need. It is something that has always been lacking in all of us.

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The Deputy Speaker

Is the House ready for the question?

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11:35 a.m.

Some hon. members


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11:35 a.m.

The Deputy Speaker

The question is on the motion. Is it the pleasure of the House to adopt the motion?

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11:35 a.m.

Some hon. members


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11:35 a.m.

Some hon. members


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The Deputy Speaker

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

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Some hon. members


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The Deputy Speaker

All those opposed will please say nay.

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Some hon. members


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The Deputy Speaker

In my opinion the yeas have it.

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Some hon. members

On division.

(Motion agreed to)

The House proceeded to the consideration of Bill C-31, an act to amend the Export Development Act and to make consequential amendments to other acts, as reported (without amendment) from the committee.

Export Development ActGovernment Orders

October 30th, 2001 / 11:40 a.m.

Winnipeg North—St. Paul Manitoba


Rey D. Pagtakhan Liberalfor the Minister for International Trade

moved that the bill be concurred in.

(Motion agreed to)

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11:40 a.m.

Winnipeg North—St. Paul Manitoba


Rey D. Pagtakhan Liberalfor the Minister for International Trade

moved that the bill be read the third time and passed.

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11:40 a.m.

London—Fanshawe Ontario


Pat O'Brien LiberalParliamentary Secretary to the Minister for International Trade

Mr. Speaker, I am very pleased to have the opportunity to speak on third reading of this very important and timely bill, an act to amend the Export Development Act. Bill C-31 is the outcome of a legislative review process that was mandated in 1993. In that year a number of amendments were made to the Export Development Act.

The purpose of the amendments was to improve the EDC's ability to serve Canadian exporters. Canada's trade was expanding rapidly and certain aspects of EDC's operations needed streamlining. If the debates that surrounded the 1993 amendments were reviewed, we would find a strong consensus that EDC is a key player in Canada's international trade.

The expansion of the corporation's powers was supported by all parties. I do not have to tell the House how important Canada's exports are to our national prosperity. Forty-three per cent of our GDP and one out of four Canadian jobs are directly tied to exports. At the present time, EDC supports nearly 10% of this trade. This is a remarkable role for a single firm and underlines the corporation's importance to Canada.

Since the 1993 amendments took effect, EDC's business has grown almost fourfold, reaching $45 billion last year. It is clear that the 1993 changes have borne fruit, but at that time they were seen as a bold step. As a result parliament also decided to monitor the corporation's future performance. It imposed a requirement for a thorough review of EDC's mandate in five years' time.

That review began in 1998 with a report by the law firm Gowling, Strathy & Henderson. This was the so-called Gowlings report which was the starting point for studies by the Standing Committee on Foreign Affairs and International Trade in the fall of 1999. That committee's report was presented to the House in December 1999 and was the subject of a government response tabled in parliament by the Minister for International Trade in May 2000. On the whole, the government endorsed the findings of the standing committee.

Before moving to the substance of this bill and how it responds to the many issues that were raised during the legislative review, I will note a few things about the conduct of the review itself.

First, the terms of reference were extremely broad, touching all aspects of EDC's operations and mandate: how were its current programs operating; what were its customers views; EDC served a large number of Canadian exporters, but what about those who did not use its services; and what did its competitors think of it? All of these viewpoints were sought.

Second, the review surveyed the dynamics of international trade itself and the challenges facing Canadian exporters. Could EDC's current services to them be improved? Was there untapped capacity in the Canadian financial system that EDC might help deliver to exporters?

Third, a lot of stress was placed on non-commercial issues like the environment and human rights. Was the corporation upholding Canadian values in its activities? What effect did Canadian trade have on economic and social development in other countries?

Finally, the review included very extensive public consultations. If we look at the list of witnesses and written submissions that were received during the review, we will see that scores of individuals, companies and organizations were heard. There were additional consultations on individuals' issues as well.

The review was conducted with great publicity. However, this did not always make for easy decisions. There was a wide range of opinion on the issues. Much of it was valid on its own terms but difficult to reconcile. We did ensure that all voices were heard and that we were well informed concerning where Canadians stood. There was strong consensus on some points. I have already noted how Canada's economic well-being depends on international trade.

The review demonstrated EDC's significant contribution to this trade. It is a well managed organization, highly valued by its clients and respected by its competitors.

I would digress from my text to note that a major exporting firm in my riding of London--Fanshawe, namely General Motors, diesel and defense, has told me repeatedly how valuable the assistance of EDC has been in helping it win very important export contracts.

EDC is innovative in its development of programs and an important contributor to multilateral dialogue on trade issues.

Whatever changes we propose, we should preserve EDC's flexibility to deliver its services and protect those programs that are operating well. At the same time, there is also consensus that EDC could do more to ensure adherence to those values that Canadians expect of an agency of government. This is particularly true with regard to environmental and human rights issues.

EDC is Canada's emissary in many important respects. In some measure, it is Canada's reputation as well. All Canadians have a stake in this.

The standing committee, in its report to the House, summarized these views. EDC should meet reasonable environmental and social standards in conducting its business. Its environmental review framework should be given a firm basis in law. To promote greater transparency and rigour in the framework, the auditor general should oversee its operation on a regular and public basis.

EDC's development of a disclosure policy is welcomed, but it should be subject to public consultations, independent review and the corporation should consider using an ombudsman to help administer the policy.

Finally, EDC should be required, by law, to pay due regard to benefits to Canada and Canada's international commitments, particularly those bearing on human rights and labour standards.

The challenge to do these things is not just for EDC or other trade finance institutions. It is a challenge that confronts any firm doing business on a certain scale. We are seeing very focused responses to it, on the part of both individual firms and multilateral bodies, like the organization for economic co-operation and development, where relevant codes of business conduct are being developed.

The OECD guidelines for multinational enterprises are a leading example of this. They outline principles and standards in areas as diverse as employment and industrial relations, human rights and the environment, disclosure and transparency and competition and tax. They are voluntary but carry great political and moral weight.

Canada is a signatory to the guidelines and we have agreed to encourage multinational enterprises to implement them.

However, there are no easy precedents to follow in taking initiatives like these. At the most practical level, we are talking about revising the due diligence that is practised by corporations on a regular, daily basis.

New systems always have an impact on costs, on client expectations and on accepted ways of doing business. Naturally, there is some resistance. The work requires time, resources and real commitment. The Government of Canada believes that our crown corporations have both the means and the duty to take a leadership role in this work.

I would like to turn now to Bill C-31 and describe how it responds to the concerns raised during the legislative review.

EDC served nearly 6,000 Canadian exporters last year. The corporation is always working to expand this customer base. To do this, Canada's small and medium-sized enterprises need easy access to EDC's services. Part of this work involves service innovations like online credit insurance, and EDC is taking steps to implement such systems. Part of it involves simple publicity, and some members will have seen EDC's recent television advertisements.

Both here and abroad, the corporation is known by the popular acronym EDC. Bill C-31 would amend the corporation's name to Export Development Canada in English and Exportation et développement Canada en français.

This would allow use of the well known brand name EDC in both of Canada's official languages. It would strengthen the corporation's identity as a Canadian institution and it would facilitate EDC's outreach marketing, especially to small exporters throughout Canada.

In a subtle way then, the amendment serves an important objective which I am sure we can all support.

Bill C-31 also contains two amendments to the powers of its board of directors. The first would permit delegation of board powers to subcommittees composed of directors with special abilities in some area of corporate concern. This is a standard modern business practice. It permits a corporate board to refer issues to those who are best qualified to deal with them. It does not absolve the board of ultimate responsibility for the final decisions taken in respect of such questions.

A related amendment would enable EDC's board to make bylaws for the administration of a recently established pension plan. The new plan took effect in April 2000. It was established with appropriate authorizations and is consistent with treasury board policy that crown corporations should establish pension plans independent of the government.

I would like to turn now to the amendments that are probably of most interest to the House. Bill C-31 would establish a legal requirement for EDC to conduct environmental reviews of the projects it is asked to support. EDC already does this but the amendment would make it a binding legal obligation. A related amendment would require the auditor general to conduct regular examinations of EDC's environmental review framework. These examinations would cover both the design of the framework and EDC's performance in applying it. The examinations would occur at least once every five years and would be reported to parliament.

A related amendment would prevent duplicate requirements arising under the Canadian Environmental Assessment Act. Certain ministerial or cabinet actions can trigger that act, for example when ministerial authorizations are required for a transaction. Bill C-31 would require environmental reviews under the Export Development Act but there would still be a risk of a duplicate obligation arising under the Canadian Environmental Assessment Act. The amendment simply would prevent such duplication from occurring.

Critics of Bill C-31 have suggested that EDC should be regulated under the Canadian Environmental Assessment Act. This view was expressed repeatedly throughout the legislative review but neither Gowlings nor the standing committee took up the suggestion. In fact Gowlings stated that legislating specific environmental requirements for EDC might not be practical. Instead they recommended an approach similar to that of the United States export credit agency Eximbank.

Eximbank has had an environmental requirement in its governing legislation for almost 10 years. Eximbank's practices are often held up as a model for other agencies. In this approach, a general mandate to conduct environmental reviews is set by law but Eximbank's board of directors is responsible for developing specific guidelines and procedures in consultation with stakeholders.

This is precisely what Bill C-31 would do, establish a general environmental mandate while leaving its implementation to EDC's board of directors.

EDC recently completed public consultations on revising its environmental review framework. It employed both the auditor general's recommendations and specific government guidance in undertaking these consultations. It has sought out and taken account of the views of industry and NGOs. It has also engaged a leading environmental consultant to assist with the consultations and prepare detailed recommendations for the framework's revision. No other export credit agency in the world has had its environmental procedures subjected to such meticulous and exhaustive review.

The possibility of regulating EDC under the Canadian Environmental Assessment Act was given careful consideration before the present course was chosen. In taking its decision, the government applied such criteria as ensuring environmentally sound projects, protecting competitiveness, respecting foreign sovereignty and preserving flexibility to operate in the fast paced international environment.

The approach we have chosen is consistent with the emerging practice in the international community and with our work on this issue in the OECD. It would provide a uniform process for EDC's projects and permit rapid adaptation to changing competitive and technical circumstances. To ensure that its procedures and standards are sound, the auditor general will continue to oversee both its design and operation.

The Standing Committee on Foreign Affairs and International Trade has also recommended that EDC's mandate should include a legal requirement to pay due regard to benefits to Canada and Canada's international commitments, particularly those that concern human rights and core labour standards.

EDC's mandate is trade promotion, to the benefit of Canadian exporters and our common prosperity. Furthermore, as an agent of the crown, EDC is already bound to adhere to Canada's international commitments. However it was recognized that a general statutory mandate of this kind could raise legal risks for the corporation without clarifying the specific requirements that must be met in a given case. Unlike the environmental mandate, there is no pre-existing framework to help ground such an obligation in concrete operational measures.

Nonetheless, the government acknowledges the serious concern that underlines the recommendation and is committed to ensuring that economic benefits in international obligations are taken account of in EDC's decision making. The government has decided to address this issue through two interconnected mechanisms.

In the first place, EDC will be required by its corporate plan to consider economic benefits to Canada and Canada's international commitments in the areas of human rights and core labour standards. Preparation of a corporate plan for crown corporations is required by the Financial Administrative Act. A corporate plan sets out and limits the range of a crown corporation's activities. It must be approved by ministers and tabled in summary form in parliament. A crown corporation cannot act outside the parameters set down in its corporate plan and must undertake to fulfill its requirements. EDC's corporate plan will now include these requirements and the House will have the ability to review its performance and assess whether the requirements have indeed been met.

However general commitments to human rights mean little unless we take concrete steps to ensure their respect in specific cases. At a practical level, the Department of Foreign Affairs and International Trade is working with EDC to refine our information sharing on human rights concerns in specific countries. This will operate at the level of general or sectoral conditions as well as individual projects. The objective is to ensure that EDC's decisions take full account of both the facts of the situation and how that may impact on Canada's international commitments. Once again, we recognize this is an issue that is important to all Canadians.

In bringing Bill C-31 to parliament, my colleague, the Minister for International Trade, took a very balanced approach to policy reform at EDC. On the one hand, the bill would leave significant responsibility in EDC's hands for the development of environmental and social policies. On the other hand, both government oversight and public accountability would be brought to these policies through regular consultations and the Office of the Auditor General.

When we last amended the Export Development Act in 1993, we hoped the changes would benefit Canada's trade and promote our common prosperity, and the intervening years have borne this out. Today we are again taking bold steps to keep the Export Development Corporation at the forefront of international trade practice.

I want to note that the legislation is very important and would make EDC more transparent and accountable, but what is most important is to have a proactive minister who will take it upon himself or herself, whoever has the position at any given time, to ensure that the full weight of the act is carried through.

I want to acknowledge the proactive efforts of the Minister for International Trade who said that he wants to see a report on the activities of EDC within two years, not the five years for which the legislation calls or even the three years which I believe the auditor general proposed. The minister took the initiative in wanting a full audit in two years time.

That is the kind of commitment the Minister for International Trade and the government has to making sure EDC performs effectively but in the most transparent way that is consistent with Canadian values.

I ask all members of the House to endorse the objectives of the bill and I look forward to their support for it.

Export Development ActGovernment Orders


Canadian Alliance

John Duncan Canadian Alliance Vancouver Island North, BC

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--

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12:20 p.m.

Canadian Alliance

John Williams Canadian Alliance St. Albert, AB

Madam Speaker, I rise on a point of order. I think if you were to seek it you would find there is unanimous consent of the House to adopt Motion No. P-5.

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12:20 p.m.

The Acting Speaker (Ms. Bakopanos)

The House has heard the member's request. Is there unanimous consent?

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Some hon. members


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Some hon. members


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Canadian Alliance

John Duncan Canadian Alliance Vancouver Island North, BC

Madam Speaker, we are a small country population-wise and a large country geographically, obviously. We are very dependent on our exports.

We have a major dispute on lumber. We have steel disputes. We have some agricultural disputes going on. We are reliant on WTO in the long run supporting the fact that we are fair traders and free traders. All of this, under the guise of some financing from the Export Development Corporation under the Canada account which I am calling a Liberal minister slush fund, is actually hurting us. It goes to the very core of what is important for us as a national strategy. We simply cannot play both ends on this kind of arrangement.

I am very critical of the Canada account. We do not need it. It is undermining WTO. It is also undermining EDC. EDC needs to focus on depoliticized finance arrangements, not on something like this. This has been foisted on it and it does not have the ability to fend it off unfortunately. It is a very unfortunate trend. I hope we can sort that out internally without waiting for WTO or someone else to embarrass us to the point where we have no choice but to remove it. We should be much more proactive than that.

There are two further statements from the EDC website which I will make reference to. The first one states:

As a crown corporation, we operate at arm's length from government and according to commercial principles.

I would put that in the category of a wish list. That is not actually what happens, as I have just described. The second statement is:

Governance policies and practices are determined by our board of directors. The board has 15 directors, drawn mainly from the private sector.

We know that is a wish list too, from the standpoint that the board of directors does not entirely make all the decisions on practices. Increasingly we are finding that the directors may be drawn from political appointments as opposed to from the private sector.

In summary, the EDC needs to be independent of government and it is not. I have given some rationale as to why, for example, political appointments and the Canada account. The Canada account is a Liberal minister slush fund. Mixed messages from the Minister of Industry and the Minister for International Trade are hurting us at the WTO and in the international community.

We are major beneficiaries of rules based trade and we cannot have it both ways. In other words, we cannot be free traders when it is convenient and protectionists when it is convenient. We have to have a level of consistency on the free trade ledger.

We have to keep this clean. It is too important for Canada to do it any other way. Today for example we are expecting the anti-dumping ruling from the protectionist side and instincts of the U.S. lumber lobby as exhibited by the U.S. department of commerce on Canadian imports of lumber. In order to keep the lumber file clean, we have to keep our other files clean. Softwood lumber is a huge issue for us.

A portion of the EDC mandate is politicized. These amendments do not clean that up. As a consequence, Canadian interests are not fully served, nor are the interests of the Export Development Corporation fully served.

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12:25 p.m.


Pierre Paquette Bloc Joliette, QC

Madam Speaker, we are now studying Bill C-31, an act to amend the Export Development Act.

Before anything else, I would remind the House what the key elements of this legislation are. The bill would enshrines in law the fact that before entering into a financing transaction the Export Development Corporation, whose name it changes incidentally, must take environmental considerations into consideration.

The bill leaves it up to the Export Development Corporation to establish its own environmental criteria and to determine the exceptions to the rules. It is rare to see a corporation be made both judge and defendant, when that corporation already does not comply with its own directives.

We will see that in detail later on. In her May 2001 report, the auditor general stated that, out of the 25 projects audited under the terms of reference determined by the corporation itself, she found 23 to be in violation of those terms of reference. I am referring to the Export Development Corporation.

The present bill adds nothing to the requirement for accountability on the part of that corporation. There is nothing in the bill about the disclosure of information or about public consultation.

As I said, the frame of reference is what the corporation assigns to itself, and there is really nothing in the bill to ensure that this framework is adequate to properly assess the environmental effects of projects submitted to it.

Moreover, the bill gives the rather strange discretionary power to the Minister of Finance and the Minister for International Trade to exempt a project from environmental assessment. The bill, in principle, gives exclusion from any of the requirements of the Canadian Environmental Assessment Act.

I must admit that we are totally mystified by this choice. We pass environmental assessment legislation and then exempt the corporation from it, at the very time that it is being asked to put more effort into its environmental assessments.

Finally, this bill makes absolutely no mention of human rights.

As hon. members can see, this bill might appear ambitious, in light of the criticism there has been of the EDC in recent years. Once read, however, it can be seen to be a pretty lightweight piece of legislation.

I would take this opportunity to remind the House that the EDC was established in 1944, as the Export Credits Insurance Corporation, with a mandate to support and develop Canada's export trade. It was given the responsibility of providing credit insurance and guarantees to Canadian exporters. In 1969 it became a crown corporation and acquired the additional powers of being able to make direct loans to foreign borrowers, and to borrow against the government's credit to finance its activities.

The last change, made in 1993, now enables it to invest in capital stock, to lease assets to users outside Canada, to constitute subsidiaries, and to take part in joint ventures.

It is noteworthy that the EDC is self-funding, in that it receives no parliamentary votes for its activities. It derives its operating revenue from fees, premiums and loan interest.

In the year 2000, for instance, it reported net profits of $194 million, a 9.7% return on shareholder assets. Its assets would therefore be some $2.8 billion. That same year, hon. members will recall, the corporation estimated that it had supported exports and foreign investments to the tune of some $45 billion.

Finally, let us not forget that this crown corporation enjoys special status. It is not subject to the Access to Information Act. It is not subject to the Environmental Assessment Act. It is not regulated by the Office of the Superintendent of Financial Institutions, as is the case for all private enterprises. It does not pay income tax. It does not have to pay dividends. It can borrow money at favourable rates, thanks to the credit extended to the Government of Canada.

I think it must also be said that the Export Development Corporation has a highly developed secrecy policy: it hardly gives out any information about its activities.

In the evidence we heard at the Standing Committee on External Affairs and International Trade, most of the groups that appeared before the committee, particularly the international co-operation groups, reminded us of the difficulty they had in getting information.

For example, Warren Allmand, a former Liberal member and minister, who is now president of Rights and Democracy, presented a document that was obtained by his organization through the Access to Information Act. The document was completely blank. This shows that a secrecy policy, a lack of transparency, seems to be a feature of this corporation.

Coming back specifically to the environmental issue, since it is the only new element in this bill, we see that the corporation will set up an environmental framework to apply environmental criteria to its financing decisions.

As I already mentioned, in response to many criticisms, the auditor general was asked to assess the appropriateness of the Export Development Corporation's environmental review framework. She concluded that the framework contains, and I quote “most elements of a suitably designed environmental review process”. However, it would appear that the framework has never been properly applied.

As I mentioned at the outset, and I think the Canadian and Quebec public have to know it, out of the 25 projects she studied, 23 had not been properly reviewed for environmental risks, or not reviewed at all, in accordance with the framework the corporation had defined.

Of course, this was not the only thing she criticized. I will repeat some of her criticisms, as set out in her May 2001 report.

The auditor general pointed out that there are major shortcomings in terms of public consultation and disclosure at the Export Development Corporation, there are significant differences between the environmental review framework's design and its operation, the framework's statement of objectives is not clear, the framework's environmental standards are not specified, there are flaws at each stage of the environmental review process, screening tools are not applied adequately to identify potential environmental risk, and there is no methodology to determine if adverse environmental risks can justify a decision or not.

It is not the only report we can refer to in order to have an idea of the major shortcomings in the current management approach taken by the Export Development Corporation. Members will recall that in 1999, the Gowlings report pointed out much the same shortcomings with regard to transparency, environmental review and human rights. In December 1999, the Standing Committee on Foreign Affairs and International Trade tabled its report, in which we find basically the same criticisms.

So we are dealing with a corporation that has gotten some pretty bad press from most groups, including parliamentarians. In my opinion, this should have elicited a much stronger response from the federal government than that which was given with Bill C-31.

In December 1999, the Bloc Quebecois published a dissenting opinion to the report of the Standing Committee on Foreign Affairs and International Trade; it was already clear to us then that there was disagreement that could be boiled down to three elements: transparency, human rights and the environment.

I will recap the main elements that we highlighted in December 1999. Regarding transparency, we noted that there was an obvious and marked lack of transparency in the Export Development Corporation's operations; that access to information was sorely lacking; and that given the context of a lack of transparency, it was highly likely that the Export Development Corporation's activities could be used for inappropriate purposes, which might even conflict with the purposes outlined in the statute.

Therefore, it seemed essential to us at that time that the Export Development Corporation be subject to the Access to Information Act.

As for human rights, the Bloc Quebecois expressed serious concern regarding the Export Development Corporation when it comes to respecting human rights. Among the risks that the corporation assumes, there are political factors. It provides political risk insurance. However, the Export Development Corporation does not take into consideration the human rights situation when it assesses political risks. When it comes to political risks, obviously there is a serious risk of political upheaval in the case of regimes that abuse human rights and do not respect fundamental labour law.

Before providing support for a business, the corporation should at the very least—this is what we thought then, and still think now—ensure that the company in question subscribes to the code of conduct established by the OECD, when it comes to human rights. Bill C-31 makes no mention of this fact, as I stated earlier.

As for environmental standards, they are briefly mentioned in Bill C-31. The Bloc Quebecois was and is still of the opinion that the committee's recommendations concerning the environmental responsibility of the Export Development Corporation—we refer here to the report of the Standing Committee on Foreign Affairs and International Trade—were nothing but a wish list. It was not enough to ensure that, in fact, the environment will now be included in the corporation's studies prior to any decision making process.

The Export Development Corporation's environmental responsibility must be more firmly anchored in order to better reflect the corporation's duty as regards environment, respect for the environment, and sustainable development.

In this regard, the Bloc Quebecois would have expected the Export Development Corporation to draw more from the operating framework of the World Bank or the European Bank for Reconstruction and Development, where for each reasonable project there is an environmental impact assessment, public hearings, and above all full transparency.

We cannot accept that the Export Development Corporation, even under its new name, should use public moneys to fund projects that could end up destroying the environment or violating human rights, and do so with impunity, as secrecy is one of the corporation's characteristics.

As I indicated, there were three very harsh reports. The May 2001 report of the auditor general, the report of the Standing Committee on Foreign Affairs and International Trade, complete with the Bloc Quebecois dissenting report, and the Gowlings report were all extremely critical.

In a way, Bill C-31 was presented as a response to this criticism, since that the Export Development Corporation had obviously not succeeded in regulating itself. One would have expected Bill C-31 to address this weakness, but there is nothing in this bill to do so.

The bill is too weak from an environmental point of view. It provides no guarantee for an effective environmental assessment and gives the EDC too much leeway in establishing the criteria. It is silent on disclosure. The bill does not include any punitive provisions should the EDC not respect its own environmental framework.

We have seen in the auditor general report that in 23 of the 25 projects examined, the framework had not been respected. In this regard, I shall point out that Quebec imposes fines and even jail terms on officials who are found guilty of negligence in environmental matters.

On the other hand, the bill is watering down environmental standards by not assuring Canadians that projects comply with more than just the standards of host countries, and that they respect the environmental review framework. This bill also excludes any possibility of making the EDC subject to the Canadian Environmental Assessment Act. Since the corporation has no credibility whatsoever, this bill does not represent a response to the criticisms made repeatedly over the last three years.

Finally, Bill C-31 completely sidesteps the issue of fundamental rights, human rights, labour rights, and this is totally unacceptable. For example, we know of this gold mine in Tanzania that belongs to a Canadian company which was granted a political risk insurance by the Export Development Corporation.

The mine was apparently put at the disposal of the Canadian company following a massive eviction of artisanal miners. There are even allegations by Tanzanian lawyers which were made public here in Canada to the effect that, as part of this massive eviction operation--and we are talking about hundreds of thousands of people--there were artisanal miners who were buried alive in their mine. These are allegations.

I take this opportunity to mention that the NDP leader asked a question in this House concerning this extremely disturbing case. In his reply, the Minister for International Trade referred to the fact that Amnesty International had investigated the matter, but had not found evidence supporting the allegations made by human rights lawyers, particularly Tanzanian lawyers.

However, in its annual report for the year 2000, Amnesty International says that, based on the documents provided to it by the Tanzanian police, it was not able to come to a conclusion regarding this issue, and it is asking for an independent, international investigation to shed light on these events.

Contrary to what the minister told us, probably in good faith, not only did Amnesty International not come to a conclusion regarding these extremely disturbing and dramatic facts, but it is also asking--as we are--for an independent, international investigation to shed light on all these events.

Be that as it may, the Export Development Corporation continues to proceed as if it were business as usual.

In order to correct this situation, I proposed a number of amendments in committee, which I will mention.

These amendments basically deal with clause 10.(1) and seek to correct a number of flaws relating to this clause and to make appropriate related changes. I will discuss clause 10.1

For example, absolutely no reference is made to the EDC's responsibility to take into account not only environmental effects, but also social effects and, more globally, human and other rights provided for in international agreements.

I therefore proposed that, to this clause, be added a point that would clarify the mandate of Export Development Corporation. The amendment read as follows:

The Corporation is established for the purposes of supporting and developing, directly or indirectly, Canada's export trade and Canadian capacity to engage in that trade and to respond to international business opportunities in keeping with Canada's international commitments.

It strikes me as perfectly normal that a crown corporation would honour commitments made by the government internationally, especially in the area of human rights and basic labour rights.

Believe it or not, the Liberal members of the committee rejected this amendment. It is difficult to understand how the federal government makes commitments on Canada's and Canadians' behalf, and indirectly still on behalf of Quebecers, and then does not want to require its own corporations to honour these commitments. We are indeed talking about international commitments, that is conventions, treaties and charters ratified by the Canadian government.

I have to say I was quite disillusioned about the scope of the work Canada can do internationally, if it is not prepared to have its crown corporations honour the commitments it itself makes. How is it going to get private firms and multinationals based in Canada to honour these commitments?

So my first disappointment was at the rejection of such an obvious amendment, which was later reformulated by the member for Burnaby--Douglas, in fact. Twice, we have tried to get this element, a simple matter of common sense, passed, and twice the Liberal members have rejected it. That was the first great disappointment.

As I said in my presentation, the environmental frame of reference that the Export Development Corporation has set for itself is inadequate. It fails to honour this environmental framework it set for itself. It is therefore incapable of self-regulation.

Paragraph (2) of the famous clause 10 reads as follows:

The Board shall issue a directive respecting the determination referred to in subsection (1)--

That is the assessment of environmental effects.

--, which directive may

(a) define the words and expressions that the Board considers necessary for the application of that subsection, including the words and expressions “transaction”, “project”, “adverse environmental effects” and “mitigation measures”;

(b) establish the criteria that the Corporation must apply in making the determination:

(c) establish exceptions specifically or by any class, as defined by the Board, to the Corporation's obligation to make the determination.

It is therefore not an obligation. The Export Development Corporation can define its own terms of reference. It beats me how there can be environmental terms of reference without some sort of minimal definition of words such as transaction, project, adverse environmental effects and mitigation measures.

I therefore proposed an amendment to Bill C-31 to define these various terms. People must know what they are talking about when they refer to impact on the environment. Without reading the amendment in its entirety, I will convey the gist of it by reading what strikes me as the most important term, environmental effects, because this has to do with a framework for assessing environmental effects. I suggested this definition to the committee:

environmental effects means any change that the project may cause in the environment, including any effect of any such change on health and socio-economic conditions--

It is very clear to me that when one refers to environmental effects, one is also referring to socio-economic effects:

on the current use of lands and resources by local communities, on any structure, site or thing that is of historical, archaeological...importance--

As the House can see, it is a very straightforward definition. The definitions are borrowed from the Canadian Environmental Assessment Act. We therefore did not rebuild the wheel; we used what was already available. I also borrowed the definition of environment, environmental assessment, mitigation and project.

Here again, I was astonished, because it is only common sense that if a crown corporation adopts environmental terms of reference, there should at least be agreement on the terminology used to make an assessment.

Once again, the Liberal members of the Standing Committee on Foreign Affairs and International Trade rejected this amendment. I am still wondering what logic they could have used, unless it was a form of anti-opposition sectarianism.

A second amendment was therefore rejected. Its purpose was merely to define the terms on which we must work and agree on so that when the auditor general and parliamentarians are called upon to assess the work of this crown corporation, they will know where we are coming from.

As I said, I believe definitions are necessary, but we ought to have at least been able to expect to find the bill stating that the corporation “must” define a certain number of criteria, and make these definitions public in order to open them up to public debate. It seems, however, that the government side of this House prefers to lend to this bill the same secrecy as reigns within this crown corporation, the EDC, at the present time.

As I said earlier, not only are definitions lacking, but the frame of reference for assessments is flawed as well.

All that is stated in clause 10.1 is the following:

10.1(1) Before entering, in the exercise of its powers under subsection 10(1.1), into a transaction that is related to a project, the Corporation must determine, in accordance with the directive referred to in subsection (2),

(a) whether the project is likely to have adverse environmental effects despite the implementation of mitigation measures; and

(b) if such is the case, whether the Corporation is justified in entering into the transaction.

Hon. members can see that this is far too weak a directive from the legislator. I therefore took the liberty of submitting to the committee a far clearer, and far more complete, environmental assessment procedure.

In connection with the first element of this procedure, what I proposed--not just what is stated here about looking to see whether there are likely to be adverse environmental effects--what I proposed was for the corporation to be required to carry out an environmental assessment before exercising its power to assess a project against a series of criteria, such as environmental assessment, or the development and implementation of a program for follow up. Then the environmental effects must be determined, along with the extent of these effects. Comments from the local population must be obtained. And are the mitigation measures technically and economically feasible?

Furthermore, the rationale behind the bill is important. There are the alternative solutions and the requirement for a follow up program. Those are all self-evident criteria for the evaluation of any project.

The corporation carries out the environmental assessment, prepares a report and sends it to the Minister for International Trade. On the basis of that report, the corporation takes one of the following measures, depending on the environmental assessment: it decides either to go ahead with the project or not to support the project because its environmental impact would be negative. In that case,however, what is EDC to do? It is not really clear; there is a grey area? Can the corporation be judge and defendant? I do not think so. It seems to me that in such a case the Minister for International Trade has a responsibility and a role to play.

I was suggesting that, whenever it is unclear whether the adverse environmental effects outweigh the value of a project, the corporation should ask the Minister for International Trade to decide. If the corporation considers that even after the implementation of appropriate mitigation measures, the project might have serious adverse environmental effects, it should refer the matter to the minister.

If a project is likely to have major adverse environmental effects despite the implementation of mitigation measures and if the previous clause does not apply, the EDC refers to the minister, provided the concerns of local populations justify such a measure.

This is an environmental frame of reference that leaves a lot of leeway to the Export Development Corporation, while defining rules that everyone would know and understand.

Under Bill C-31, the corporation will set for itself the rules that it wants. It will decide whether or not it will comply with these rules.

Finally, in the same amendment, I proposed including two small provisions whereby the corporation would have to disclose, in the 45 days prior to the conclusion of an agreement, information on the projects in which it is involved. This information was to include the name of the borrower, the host country of the project, the environmental and social concerns of local populations, the value of the project and the conditions relating to financial support.

If we want Canadians and Quebecers, international solidarity organizations and any interested party to be able to express their own views on the evaluations to be made before supporting a project, the public must be informed of the existence of the project.

Finally, we proposed that no provision in the Privacy Act or the Access to Information Act should have the effect of preventing or restricting the disclosure of the information mentioned in the previous paragraphs, to which I just referred. This is a fundamental flaw in Bill C-31. Nothing is done to give Canadians and Quebecers access to information on the management of the Export Development Corporation.

It will obviously be no surprise to anyone if I say that the Liberal members of the Standing Committee on Foreign Affairs and International Trade voted against this amendment, which, as I mentioned, was drawn from internationally known rules. More specifically, I drew on the rules of the World Bank. We were not starting a revolution in committee by proposing such amendments, but it was rejected. Once again, I have a hard time understanding the reasons.

Finally, in light of the criticism raised about the governance of the Export Development Corporation, I cited three or four damning reports, but the evidence of representatives of NGOs, groups and individuals before the standing committee should have been heard. They raised questions of considerable concern.

I think that, to wait until the auditor general looks into the EDC's operations every five years, is to give the corporation far too much latitude, especially with what is contained in the rest of Bill C-31. There is practically nothing there to really structure the work of this crown corporation. If an audit is done only every five years, the Export Development Corporation will have time to do a lot of damage.

Some guideline must be set in terms of time so that in the next two years, the auditor general will be able to report on management methods subsequent to the passage of this bill on the Export Development Corporation.

Did it make the changes the Canadian and Quebec public were expecting? Did it support projects consistent with our laws and concepts of sustainable development in environmental terms? Did it support projects that promoted fundamental rights or, conversely, did it help to further destroy our planet and further erode the rights of workers and people in countries in the southern hemisphere?

In my opinion, five years is too long a time. I therefore proposed an amendment to enable the auditor general to examine the governance of the Export Development Corporation.

Once again, no one will be surprised to hear me say that the Liberal members voted against this amendment, which makes good sense.

The legislation is therefore still hollow. Bill C-31 does not address any of the concerns repeatedly mentioned by committees, groups, individuals, and Canadians and Quebecers. The bill is nothing more than a surface attempt to give the impression that the federal government has listened to the criticisms and made the necessary changes.

It has not. Unfortunately, I do not have enough time to go through the whole bill but as soon as the surface is scratched, the bill's hollowness becomes apparent.

I think the criticisms of the Export Development Corporation in recent years will not end, even with a name change. On the contrary, they will increase. Why? Because for a few months, or weeks, now, the public, not just in Canada and Quebec, but in the entire western world, has understood that trade is not the only thing that matters when it comes to assessing support for corporations such as the Export Development Corporation, or for agreements and international treaties.

Human and environmental considerations, as well as considerations of democratic rights, are now vital. And this is not the first time. It was the same with the debate on the Canada--Costa Rica free trade agreement. The Canadian government had no suggestions to make regarding human rights, environmental rights or democratic rights.

Frankly, Bill C-31 is just like Bill C-32. The government is plowing ahead as though there had been no change in public opinion in Canada and Quebec, as though the economy is more important than the values of Canadians and Quebecers.

I was also surprised that the bill contained no proposal to create a position of ombudsman, although this was repeatedly recommended, both by government committees and by parliamentary committees.

There is therefore nothing in this bill that meets the expectations of the Bloc Quebecois or of Canadians or Quebecers. We will therefore have no choice but to vote against Bill C-31.

Export Development ActGovernment Orders

1 p.m.


Svend Robinson NDP Burnaby—Douglas, BC

Madam Speaker, first off I would like to thank the hon. member for Joliette and Bloc Quebecois critic for international trade for his comments. I would like to say, on behalf of my New Democratic colleagues, that we will also oppose Bill C-31. We will do so for the reasons expressed very eloquently by the member for Joliette, which I will try to explain in the few minutes of comment allowed me in connection with third reading of this bill.

As I said, we are opposing the bill at third reading. I want to make it clear how profoundly disturbing and disheartening the process was in committee with respect to the bill.

The committee took the time to hear many witnesses from civil society, the labour movement and the NGO working group on the Export Development Corporation. We heard witnesses from a Latin American human rights group, a researcher for KAIROS, witnesses from Développement et Paix and many others from the business community.

Following extensive hearings on the bill, when it came time to reflecting the concerns and the hopes of those witnesses in the legislation with respect to amendments, not a single amendment was accepted by the government members on the committee. Not a comma changed in the bill from its original presentation. Frankly this was contemptuous of the very thoughtful concerns that were expressed by the members of the committee and by the witnesses who appeared before the committee on its hearings.

I mentioned the NGO working group on the Export Development Corporation, the so-called Halifax initiative. I want to read out the names of the members of that initiative to give some sense to the House and to those Canadians who are watching this debate of the broad diversity of groups that made up this initiative and who were calling for significant changes to the legislation.

The Halifax initiative working group was made up of: the United Auto Workers Union, the Canadian Council for International Cooperation, the Canadian Friends of Burma, the Canadian Labour Congress, the Canadian Lawyers Association for International Human Rights, Democracy Watch, Development and Peace, East Timor Alert Network, the Falls Brook Centre, Rights and Democracy, Mining Watch Canada, Project Ploughshares, Results Canada, Sierra Club Nuclear Campaign, the Social Justice Commission of Montreal, the Steel Workers' Humanity Fund and the West Coast Environmental Law Association. This is a very impressive group of organizations from across the land that appeared before the committee and put together a comprehensive brief asking for some significant changes in the legislation.

In response to those suggestions, on behalf of my colleagues in the New Democratic Party, I proposed a number of amendments and each and every one was rejected.

My colleague from the Bloc Quebecois also tried to respond to the concerns and priorities of these witnesses. His amendments were also totally rejected by the committee.

I will now summarize the key areas of concern that were raised in the committee with respect to Bill C-31. First is the issue of disclosure and transparency.

The recommendations made to the committee were that the act be amended to require the disclosure of project related information in a timely and regular manner and that pre-approval disclosure of environmental and social information for projects with known or potential significant adverse impacts should have been included in Bill C-31.

The review made by Gowlings in June 1999 of the Export Development Act, by the foreign affairs committee in December 1999 and by the minister, all recommended that the EDC be required to disclose information related to transactions. When we look at Bill C-31 there is not a word about disclosure. There is not a single word about greater transparency.

In tabling the legislation and in refusing to implement the amendments and recommendations of witnesses, the government is ignoring not only the Gowlings report and the foreign affairs committee but the commitments that were made previously by the minister himself.

The EDC says that it has a disclosure policy that was implemented on October 1 of this year. It says that it has an internal compliance officer. The fact of the matter is there is nothing at all in the bill that requires the EDC to disclose any information whatsoever. Historically, back in the mid-1980s, the EDC actually decided that it would stop releasing any project related information to the public. It could do that tomorrow under the provisions of the legislation.

It is particularly important as well that the EDC be required to adopt pre-approval disclosure of environmental and social information for projects that may have a significant adverse environmental or social impact. If there is going to be any efficient environmental impact assessment process there has to be pre-approval disclosure. This is already part of the process under other international financial institutions such as the IFC and the European bank for reconstruction and development. In fact, the export credit agencies in the United States and Australia release such information 45 to 60 days prior to approval.

This is just good practice and it is a principle of the Canadian Environmental Assessment Act. If we look at Bill C-31 there is absolutely no requirement whatsoever for any kind of prior disclosure or pre-approval disclosure of environmental and social information for projects that could have very serious impacts on the environment. Although it was not possible to introduce an amendment to this effect because it was ruled to be beyond the scope of the bill, I would urge the government to bring in legislation to ensure the Export Development Corporation is fully subject to the Access to Information Act.

The Business Development Bank, which is another crown corporation in Canada, is already subject to the Access to Information Act. Both of the American export credit agencies are subject to similar United States legislation. It is totally unacceptable that a crucial question such as transparency should simply be left up to the entire discretion of the corporation. It should come under the umbrella of the access to information legislation.

With respect to the issue of environmental protection, clause 10.1 in Bill C-31 is a new clause that deals with environmental effects but it is full of loopholes. It gives the Export Development Corporation board total arbitrary discretion. I will read now from the section itself. It states:

(c) establish exceptions specifically or by any class, as defined by the Board, to the Corporation's obligation to make the determination.

That determination is with respect to adverse environmental impacts. It could exempt an entire category without any oversight whatsoever. This makes a mockery of any meaningful environmental assessment under the legislation.

Instead, we proposed, along with the many NGOs that appeared before the committee, that environmental criteria, including standards and processes, should have been included in the legislation and that a regulation on the environmental assessment process for the EDC should have been developed under the Canadian Environmental Assessment Act.

Once again, in December 1999, the foreign affairs committee made a similar recommendation that made it very clear that there should be far more openness to environmental criteria being included in the legislation. No such thing was done. There is not a single word about it in Bill C-31.

Even if the Export Development Corporation finds that a project does have, in the words of the section, adverse environmental effects despite the implementation of mitigation measures, the board can approve funding for the project in any event. Even if it accepts that there will be a significant adverse impact on the environment, it can fund a project despite that.

When we look at some of the projects that have been funded, such as some of the Candu reactor projects, including the Cernavoda project in Romania and in China, we have very serious concerns about those, just as we have concerns about the Three Gorges dam project in China and a number of other projects that the EDC has seen fit to fund despite very destructive environmental and social impacts. That is why we proposed those amendments.

I would note as well that the auditor general's report released in May was a damning indictment of the EDC's failure to implement its own environmental framework. It had an existing environmental framework in place but according to the auditor general's report it correctly implemented its own internal environmental framework in only 2 out of the 26 projects that were reviewed. That is why we as New Democrats have called for the Export Development Corporation to be placed under the framework of the Canadian Environmental Assessment Act. There is litigation currently underway challenging the decisions with respect to the Three Gorges dam. I for one hope that the litigation ultimately will be successful.

The final area of concern is with respect to human rights and core labour standards. We recommended in the committee, supported by the Bloc Quebecois which made a similar recommendation, that the purpose of the EDC be changed to include a requirement that it respond to international business opportunities in a manner consistent with Canada's international obligations.

Is it really such a revolutionary thing to ask that the Export Development Corporation, which is accountable to Canadian taxpayers and owned by the people of Canada, respect and honour the international commitments that Canada has undertaken, whether it be the international covenant on civil and political rights; the international covenant on economic, social and cultural rights; our international environmental commitments; or our ILO commitments on core labour standards?

When Warren Allmand, the director of rights and democracy, appeared before the committee, he pointed out the same thing and made the same recommendation, that we should be honouring and EDC should be required to honour in its operations those international obligations.

Here again was a recommendation of the foreign affairs committee, the same committee that studied the bill and recommended in its December 1999 report, of which I have a copy here, that we explicitly make reference in the legislation to our international commitments to human rights, core labour standards and other key areas, including the environment.

I have a copy of the press release that was issued by the Standing Committee on Foreign Affairs and International Trade on December 16, 1999. The committee stated the following:

The Committee recommends, as an overarching provision, adding to the Export Development Act clear Parliamentary guidelines for EDC supported activities and transactions so as to ensure that these both deliver benefits to Canadians and meet Canada’s international commitments and obligations, including those related to environmentally sustainable development and human rights.

What happened between December 1999 and October 2001? The same committee rejected an amendment proposé par le Bloc québécois, proposé par moi pour le NPD.

They rejected an amendment in the identical wording that we had accepted and unanimously recommended in December 1999. I say shame on the Liberal members of that committee for not being prepared to stand up for the original recommendation that was made by their own committee.

Once again the bill is profoundly flawed in that respect as well. There is no commitment whatsoever to honour those international obligations and no commitment whatsoever with respect to the important issue of establishing an ombudsperson within the EDC. For those reasons my colleagues and I oppose the legislation.

We want to raise a broader question today. What the EDC has said is that it is prepared to protect commercial interests. We have heard this same argument with respect to trade deals. We know that under NAFTA corporate interests are protected by chapter 11, the investor state provision. We know that under the WTO the interests of patent holders and multinational pharmaceutical companies are accepted under the so-called TRIPS agreement, even when that has an obvious detrimental and in some cases devastating impact on the availability of affordable drugs to fight HIV-AIDS and malaria in sub-Saharan Africa, Brazil, India and elsewhere.

Why is it that the Liberal government and its allies in the Canadian Alliance on this issue are prepared to defend the rights of multinational pharmaceutical drug companies but are not prepared to defend the basic rights of workers around the world? They are not prepared to defend the environment, to defend indigenous peoples, to defend human rights. Why the double standard?

I might just say parenthetically that many in developing countries are asking why the double standard with respect to patent rights. We have seen the spectacle of the Minister of Health recently being prepared to override patent rights of the Bayer corporation in a minute because of a possible threat of anthrax in Canada. Frankly we as New Democrats welcome that decision.

People in developing countries are asking if this is the same government that is prepared to defend the multinational pharmaceutical companies under the TRIPS agreement when they try to say they need the right to protect their patents on drugs to fight HIV and AIDS. What hypocrisy. What a double standard with respect to multinational pharmaceutical companies. If it is good enough for Canada, it is good enough for the poor in sub-Saharan Africa, Brazil, India and around the world.

In closing I want to point to one very real, powerful, human example as to why there has to be fundamental changes in the workings of the EDC and why Bill C-31 falls far short of what is acceptable.

In 1999 an indigenous Embera Katio leader from Colombia, Kimy Pernia, appeared before the foreign affairs committee. I was there when he gave evidence. At that time he provided testimony about the impact of the EDC supported Urra hydroelectric dam in northern Colombia. Kimy testified eloquently before a committee about how Embera land and crops were being flooded by the dam. Fish stocks upriver from the dam were eliminated, robbing the Embera of the mainstay of their diet. Vast areas of stagnant water were created, bringing mosquitoes and epidemics of malaria and dengue to Embera communities.

Kimy testified that this dam was built without ever consulting any of the indigenous communities living in the area that would be affected. This was a violation at the time of both the Colombian constitution and international human rights agreements. The EDC financed a portion of this dam. There was no consultation whatsoever with the indigenous peoples that were most directly affected.

Kimy also told our committee that day that speaking out about these things would put his life in danger in Colombia and that four other Embera leaders had already been killed by paramilitary forces for challenging the negative impacts of that dam.

Tragically Kimy's prediction proved to be accurate. On June 2 of this year Kimy Pernia was abducted by paramilitary gunman in Colombia. Since then we have no way of knowing where he is. There has been absolutely no news about his whereabouts. Since he has disappeared there have been other killings and continued threats against Embera communities.

It is clear that the dam, a project the EDC chose to invest in despite the opposition of the local indigenous communities, has exacerbated the violence that already existed there.

That is another reason we wanted to see included in the legislation a requirement that the EDC operate in a manner which would be consistent with our international obligations in areas such as the universal declaration of human rights, the UN covenants I mentioned, and the ILO declarations on core labour standards.

If that kind of assessment had been done in Colombia perhaps that terrible project would not have been funded. We oppose Bill C-31. We believe that in the key areas of transparency, environmental protection and respect for human rights core labour standards the bill falls far short. For that reason we will be voting against the bill at third reading.