EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, February 13, 1997

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[English]

The Chairman: I'd like to call this session to order, members. We don't want to giveMr. Strong the idea that while he's busily reforming the United Nations we're any less efficient than they are down in New York.

We may be starting late, Mr. Strong, but sometimes the committee operates a little bit on Winnipeg time. In honour of Mr. Hanson's presence, we're a little bit later.

I'd like to welcome our distinguished visitors this morning. We have with us Mr. Maurice Strong, who is accompanied by Mr. Bezanson from the IDRC; Mr. Hanson from Winnipeg, from the International Institute for Sustainable Development; Professor Gross Stein from the University of Toronto; and Mr. Culpeper from the North-South Institute. All of you, perhaps with the exclusion of Mr. Hanson, if my memory is right, have often appeared before this committee. Welcome back.

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Thank you very much for taking the time to come to share with us your opinions based on your report Connecting with the World, which has been distributed to the members. Some of us have had an opportunity to look at it. I would like to start by commending you for the work that's been done. I think it's a very important piece of work. It draws to Canadians the recognition of both the link between domestic and foreign policy and the need, as we go into the 21st century, to look at new operational techniques to make sure our society is developing at both a global and a local level in a way that is coordinated, coherent, and contributes to a better world for us all to live in. Since each and every one of you has played an important part in that development, we thank you for the work you did in preparing the report.

[Translation]

Without any further delay, I would ask Mr. Bezanson to present the topic and I will then give the floor to Mr. Strong and to Ms Gross Stein.

Mr. Keith Bezanson (President, International Research Development Centre): I am happy to be here. You pointed out that several of us have often appeared before this committee. This is my second appearance and as you know, Mr. Chairman, this is our last appearance here. So we are especially happy to be with you today.

[English]

I want to say a few words of introduction and background and give you an idea why this report came about. Its roots really go back about a year and a half to the 25th anniversary of IDRC as an international organization as well as a Canadian organization.

On the occasion of that quarter-century celebration, I asked our good friend, the Hon. Maurice Strong, if he would attend the celebratory session and share with us some thoughts about the future, knowing that the world of the 1990s and as we move to the 21st century is very different from the world against which IDRC was created by the Parliament of Canada in 1970.

I asked Maurice, as one of the architects of IDRC and one of the architects of Canadian internationalism, to address a very basic and profound question. If you had no baggage, if you did not have institutions that carry with them history, expectations, demands, and loyalties, what would you build today for the 21st century? What would you tell the IDRC, as an organization, in answering the challenge for building for the 21st century? It's a basic but very profound question.

In his address to the board and the assembled guests on that occasion, a year and a half ago, Maurice pointed to both the changed world and to the fact that we had to change ourselves dramatically and profoundly if we were to continue to be relevant to a vastly different world order that has emerged and is emerging. I'm not going to steal the thunder by going on and saying exactly what he said, but suffice it to say he issued us a challenge as an institution to move forward on a different agenda, but building on the strengths we had and on the accomplishments that I believe are well-known to this committee.

This was too important to allow it to stop there, so I returned to Maurice and asked him if he would take this further by inviting a small council of distinguished Canadians to examine this question further and share the results of their reflections with the board of IDRC. But this was so important to us and to others that as we discussed it our sister organizations, the North-South Institute and the International Institute for Sustainable Development, became very close partners with this. Indeed, as you know, they sponsored this report, Connecting with the World, along with IDRC.

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[Translation]

When we started to examine the question further on this council, which was presided over by Maurice, we thought about a council that could represent our board of directors. From the process, it was quite clear that the implications of these reflections were more important. So at some point, Mr. Axworthy was informed and decided to write the foreword to indicate his point of view, that the implications were much broader than those of the three organizations involved in sponsoring this report.

[English]

It also became clear, beyond even the minister, that there was great interest in what this committee was saying. We have been delighted, Mr. Chairman and colleagues, with the response from universities, from think-tanks, from international organizations, from The Globe and Mail, and from the Canadian public in general. We are honoured to have been associated with it.

With that as introduction and background, I would like to turn this over to Maurice Strong, Janice Gross Stein, and our colleagues. Thank you very much.

The Chairman: Thank you, Dr. Bezanson.

Perhaps I should have drawn to the attention of the members who may not know it that Dr. Bezanson is the chairman of the IDRC here in Ottawa but will be leaving that in two weeks to take up residence in London, England, where he will become the director of the Institute of Development Studies in the United Kingdom. He's the first non-United Kingdom citizen to have the honour to be named to that post. So we're going to lose him for the enrichment of the world community.

Maybe when you get out there you can keep corrupting it with those good Canadian ideas of yours, Mr. Bezanson.

Mr. Bezanson: You may keep a rope around my neck, Bill.

The Chairman: It will be a very thin string, I'm sure, but it will be nice to have some contact.

Mr. Strong, sir.

Mr. Maurice F. Strong (Chairman, International Development Research and Policy Task Force): Thank you very much, Mr. Chairman and distinguished members of this committee. I value the opportunity of joining you this morning to give you a few comments and to respond to your own questions and concerns about the substance of our report.

I will not go into the substance, obviously, except to the extent that any of you wish to raise questions concerning it, but I will underline a point that was one of our main premises. That is that what was good enough for the Canada of yesterday and for the world of yesterday is not going to be good enough for the future we face together. I think that is quite clear - there's nothing original in that - but the implications of it have not yet fully penetrated our action processes.

Knowledge, as we know, is not just another rhetorical term. It is the primary source of wealth, of added value, of competitive advantage, in our world community. Those who know how to develop, use, and deploy it are those who are going to be in the front ranks of the nations of the world of the 21st century.

Canada has a great many assets in this area, assets that have been quietly developed over a number of years and some of which are scarcely known, let alone appreciated, in our own country. We are in real danger, in the course of doing some very necessary cost-cutting, reduction of budgets and deficits.... I'm entirely in agreement with the need for that, but the danger that accompanies it is that those institutional structures that have not been visible, have not developed major constituencies, and are perhaps not fully appreciated, can in fact be the victims of this process.

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If we are going to develop the kind of knowledge-based set of relationships with our partners in the developing world and in other parts of the world that this report proposes, they are going to have to rest on the foundations of the institutions we have. The three sponsoring institutions here today are not alone in this institutional structure, but they are in the forefront.

Therefore, I submit, Mr. Chairman, that these are very precious assets. Together with the policy institutions and the knowledge institutions that exist in our university community and in our general public policy community, these are under-valued assets. We have built them up at great cost over many years and they have now become really our most precious ammunition in terms of ensuring that as Canada's role in the world diminishes in quantitative terms...I remind you that if the economists and the World Bank are right in their projections, Canada won't even be one of the fifteen leading economies in the world. By the year 2020, nine of the fifteen most important and largest economies in the world will be what we now call developing countries. Canada will not be amongst those top fifteen.

However, we need not despair. It is entirely feasible for us to win in new ways the role in the world that we won during World War II and its aftermath when Canadian leadership was widely accepted and applauded.

Mr. Chairman, as a Canadian internationalist who enjoys the benefit of being a Canadian - and there is a lot of benefit in international life to being a Canadian - let me say that the international bank account of credit that we earned over the post-war period is close to being overdrawn. We cannot live on that credit any longer.

We need new initiatives and we need the foundations for those new initiatives, and I will simply say that I would like to see this committee concentrate its attention not just on whether this report addresses the issues in a manner that commands your interest and support, but rather on giving strong support to the implementation.

Our report, Mr. Chairman and distinguished members, does not go into detail on implementation, but implementation is the key, and we do of course have thoughts on it.

I would like to see us now move into the phase of actually designing a knowledge network for development for Canada, linking Canadian institutions that are sources of knowledge - because some are sources - with those that have the capacity to use knowledge to produce policy and policy dialogue internally and with their external partners, and with the commercial-industrial community in Canada, which is not only a source of important knowledge, but a user of that knowledge, and which can be an extremely important partner in the development of that network.

Finally, Mr. Chairman, I want to remind you that we are not alone. The concept of knowledge as a prime mover in our society is not one that we alone acknowledge. There are many who do so.

Just let me tell you something that actually happened a little over a week ago in Davos, Switzerland, at the World Economic Forum. At a private meeting of government leaders at which some industry people were present, including Bill Gates, there was a discussion amongst some of the government people about how to regulate this information technology and how to actually keep abreast of it. They were talking about low-level satellites in particular. When they got through,Mr. Gates quietly said, ``Gentlemen, with great respect, let me say to you that while you are discussing how to regulate them, we'll have them up there.''

Today there are limits to powers that governments have traditionally held. They continue to try to exercise these powers, but can no longer do so effectively.

Canada is not a homogeneous country. We have often been mired down in a debilitating debate about that, but it is a fact. Important parts of our country - Quebec is the most important example - are clearly distinctive. That distinctiveness should not be seen as a liability, but as a great asset. The very diversity of Canada, the diversity of the sources of experience - not all of our experiences are the same from one part of Canada to the other, but all can contribute to the Canadian outreach and the interaction with others.

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We need not project a homogeneous culture, a homogeneous experience. The very diversity of our experience is one of the richest assets we have, and that diversity of experience needs to be integral to our response to the knowledge revolution.

Mr. Chairman, I will resist the temptation to go into the issues further. I do welcome this opportunity and very much appreciate the attention and interest shown by the members of your committee.

The Chairman: Thank you very much, Mr. Strong. Perhaps when we come to questions - I know you're primarily here to discuss your report, but you might entertain the odd question from the members about what's going on at the United Nations. We're led to believe by the press that you have some inside information. Thank you very much, sir, for coming today.

Professor Gross Stein.

[Translation]

Ms Janice Gross Stein (Member of the International Development and Policy Task Force; Professor of Conflict Management and Negotiation, University of Toronto): Unfortunately, this may not be the last time I have to appear before you.

The Chairman: Fortunately.

Ms Gross Stein: Unfortunately, but thank you for the invitation.

[English]

I don't want to take much of the time when we have Mr. Strong with us, but let me just make three or four points that elaborate what Mr. Strong has said, which I think can provide the basis for discussion and questions.

One of the questions that members of the task force have been asked is: give us some concrete examples of knowledge-based networks in which Canadians are engaged in the leadership. Members have brought with them detailed material on three, I think, which illustrate the strength of these networks - the networks on trade and sustainable development, which is one; the second one is the CGIAR, an international knowledge network, and that material is available for any member of the committee; and thirdly, the African Economic Research Consortium, in which Canadians have taken a lead role.

These are three but there are many others. We would welcome questions from members of the committee about concrete examples of how Canadians have played this kind of role.

Just as an aside, let me reinforce what Mr. Strong has made.... Many of us individually who work in these kinds of knowledge networks are highly regarded in large part because we are Canadians. We are, I think, living on borrowed capital, increasingly - this is what we hear. So we are at a critical moment in terms of restructuring our resources so that Canadians can continue to play this kind of leadership role.

Let me also say that this report, Connecting with the World, is part of a larger discussion that you're having. It very much relates to what we now call ``soft power''. I'm sure you have heard the argument, because we are not the first to bring it to you, that Canadians' advantage in the future will derive increasingly from soft power rather than hard power - military hardware and other kinds of hardware - and that this is a real advantage for this country, because in the post-war period we talked about, military assets were critically important, and we could not compete on that basis. But in a world where increasingly soft power is the most critical asset, Canadians, if we do it right, can do far better than we did in the post-Cold War world. I think the task force feels that we have a real opportunity in front of us, if we can direct our resources in the most constructive way.

The final thing I think the task force members would want us to make clear is that we are not naive about the challenges of doing this. There clearly is no expectation that these new transformative technologies we are talking about are a quick fix to problems, nor is there the expectation that these are inexpensive solutions. Mr. Strong I think rightly underlined how heavily we have invested in the past in some of the key assets that will now come to play in a knowledge-based world.

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So we are not recommending this, in effect, as an inexpensive, technological quick fix to Canadian problems and to our larger role in the international community. What we are asking of this committee now, and of the government as well, is that you take a leadership role in three important ways.

One, in the follow-on, the task force deliberately stopped short of implementation, as Mr. Strong said. But it was clear in all our minds that implementation will be needed, and this committee, we hope very much, will play an important role in bringing partners to the table who play critical roles in knowledge-based networks in Canada.

Secondly, as a result of the follow-on, it can play a role in clearly setting priorities that investment in knowledge-based networks will be a key in maintaining and enhancing Canada's reputation in a global knowledge-based world; and three, by providing guidelines and incentives to encourage Canadians in all sectors to invest more visibly and more heavily in knowledge-based networks.

That is, in a sense, the broad set of entreaties that we bring to you this morning. Thank you very much.

The Chairman: Thank you very much, Dr. Gross Stein.

Mr. Hanson and Mr. Culpeper, you are here to answer questions but not necessarily to make an introductory statement? Those are the introductory statements, then, and I'll be passing it to members.

I would just like to remind the members, however, and I might take the chair's opportunity to start, by asking the panel specifically about the issue of the Arctic and where the knowledge-based networks you refer to.... You may or may not be aware that we are presently engaged in an important study of the Arctic. Many of the members of the committee have travelled to Europe, to our Arctic partners in the Arctic Council.

We're presently in the process of writing what we hope will be a very comprehensive report. We believe this may be an opportunity, Dr. Gross Stein, to put into that report exactly the type of thoughts you have. If you don't have time to get them all out this morning, you could certainly share them with our researchers. We would be happy to take advantage of your information.

For example, when we were in Russia we went to St. Petersburg, where we saw a joint effort of the University of Calgary with a private firm and a Russian institute. They were mapping the whole of the Arctic Ocean for purposes of exploration and other reasons - ice floes, etc. This is the type of thing that for those of us who are not experts in these areas, we don't understand exactly what additional linkages could be made in order to create synergy and make sure we get the full benefit.

That's the type of thing you could be very helpful with - if you had any observations about the Arctic. Maybe I won't ask you to take up that challenge now, but I'd like to put it out there as a theme, if you have an opportunity to grab onto it during members' questions.

Mr. Paré.

[Translation]

Mr. Paré (Louis-Hébert): From the outset, I want to assure you that we agree with the substance of the report. I think that it is an important reflection at this point in world history. We know that Canada has long been an exporter of raw materials, but we have been beyond that phase for a long time. We are entering a phase where knowledge will play an extremely important role. So, from the outset, I must say that we have no problem with respect to the substance.

However, as the Bloc Québécois critic for aid to developing countries, there are some aspects that make me shutter. That is primarily what I would like to talk about.

I'm going to ask you a series of questions. The basis of my questions is that in the report you are proposing that from now on, at least 15% of Canadian official development assistance be allocated to knowledge export.

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Why link knowledge exports to Canadian ODA and not to the Department of Industry, which is responsible for Science and Technology as well as Communications, or to International Trade, which already has an important export body? This body could be used to export knowledge.

Secondly, how will using advanced technology to export knowledge fulfill developing countries basic human needs? These needs include: basic education, basic health, drinking water supplies, support for women, etc. How will using advanced technology to export knowledge help reduce poverty? That is the main objective of Canadian ODA.

I will give you an example. It has been shown that the genocide in Rwanda was launched and sustained, not by advanced technology or modern communication methods, but radios, in Rwanda, there are an estimated 14,000 telephones as compared to 500,000 radios. Which of the two is the most effective for reaching people? It seems to me that neither one is advanced technology.

Recently in Zaire, the High Commissioner for Refugees suggested giving refugees radios so that information could be transmitted to them. This is a far cry from computers and the Internet.

I'm in no way doubting the importance of the ideas you have outlined, but it seems to me that allocating a larger portion of ODA to issues relating to knowledge will result in Canada's not discharging its duties to the international community.

It seems to me that in Canada, we could have other sources of funding. Basically, we must be aware that what you process undoubtedly results in significant economic development, even in Canada, but why use ODA, when experts say that Canada devotes a mere 25% of its ODA to satisfying basic needs and that it is clearly not enough?

The Canadian Council for International Cooperation says that this portion of aid should be 50% and others say that it should be as much as 70%. Can we take part of the ODA to assume...

Here is my last point. Mr. Strong, you alluded to the fact that Minister Axworthy wrote the foreword to your report. My question is the following, and it will be my last. Is there not some confusion as to your objectives and those of the Department of Foreign Affairs? I am even under the impression that it has appropriated some of the objectives and conclusions in your report to turn them into its new vision of international communication policy.

I will conclude by reading an excerpt from an article that appeared in Le Devoir last December entitled: The New Canadian International Communication Policy: Only For Those Who Are Connected! The title of the paragraph that I'm going to read is: "Free information or propaganda?"

By choosing to focus almost exclusively on new technology and to eliminate Radio-Canada International, the government is doing more than just choosing its tools. It is making a choice on content. In his speech of December 6th, Minister Axworthy evoked "the need for government to take steps in certain areas, namely to outline the main themes and messages that we should send to the international community". Free and independent journalism is however one of the cornerstones of Canadian society the Canadian government officially says it wants to promote in its foreign policy.

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Using the pretext of emerging new media to suppress others that are still useful is an exercise that in reality bears a dangerous resemblance to censorship.

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Once again, I reiterate that I see nothing wrong with your report, with the exception of the dangerous link, in my view, that you make with Canadian ODA and the way the Minister of Foreign Affairs has picked up on it. Thank you.

[English]

Mr. Strong: I'm sure, Mr. Chairman, some of my colleagues will have some responses to this important set of questions. I'll give some very brief ones from my own perspective.

On the ODA, there is a broad spectrum of areas in which information and knowledge will flow. Some of them are strictly related to trade and our trade and commercial interests, and those should be properly financed from those sources. But the 15% that we identified for ODA was precisely to finance the development and the dissemination of knowledge that was directly relevant to the development needs of the developing countries.

In other words, we did not intend that the ODA be used to finance the other kinds of information - sometimes there's a fine line - that are related to our commercial and trade interests.

Also, as to the other question Mr. Paré had, about the difference between propaganda and real, usable development information, of course the same technologies are used to convey these, but they are not the same thing. The purposes are different and therefore the budgets related to these should be different. We should not confuse the dissemination of knowledge with the relief of poverty and to meet development needs with our own understandable desire to popularize or publicize ourselves. That is a different thing. So I do appreciate Mr. Paré making that distinction.

On the only other thing, how can high technology reduce poverty, and with regard to Rwanda and so on, I do agree that is an important issue. But let me say, as one who in a previous time spent two years dealing with the relief of poverty in the African famine of 1984 to 1986, we couldn't have done it - millions of people would have died - if it had not been for the communication technologies we had at that point. The problem is, poor people do not have the means to receive those technologies.

So you're not premising the making available of this knowledge on everybody having their own computer station, but even the poorest countries do have, and need, more points of access where the actual problems of poverty can be significantly alleviated by access to that kind of knowledge - for instance, in improving their crop yields, as through the consultative group on international agriculture research; in reducing health hazards; in a whole series of areas.

The hard technology is really just the vehicle. The real issue is how do you make that latest technology available to poor people in ways in which they can actually make use of it to improve their own condition?

It is a challenge, but to go to the other side and say because of that difficulty they are to be denied the access to the kinds of technologies that will improve their lives would be, I think, also counter-productive. So I do agree with the points behind Mr. Paré's question, and it does suggest that this issue is not a simplistic issue. There are some complex challenges in facing this issue, but I do feel they are manageable.

Finally, on the question about Minister Axworthy, he will have to speak for his objectives. We were pleased to have his endorsement of the basic message of the report, but we do not take that as a complete commitment by him to all the ideas in the report, nor a commitment by our own task force to all of the things he might do with that report.

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The Chairman: Did you want to add something, Madam Gross Stein?

Ms Gross Stein: As a very quick response to what I think was a very important set of questions, you spoke about Rwanda and asked how in fact what this report recommends could be relevant to the genocide in Rwanda and the problems that flowed from it. Let me give you one example.

A Canadian has taken the lead in forming a knowledge-based network called the Forum for Early Warning and Response, which will bring together experts from Burundi, Rwanda, and other parts of eastern Africa, organized in a network to provide real-time early warning, which was not available in a meaningful way before the genocide broke out in April in Rwanda.

So from a very concrete, practical point of view - and this, of course, would involve Rwandese and Burundians, so it is not from outside - it is connecting together global experts on these countries, which no single country has or could afford to have, with people in these countries, to move information in a real-time way if in fact there are grave reasons to be concerned. If you look at the cost of that network, which on its own terms may not be inexpensive, and compare it to the cost of failure of the international community - and it clearly did fail in Rwanda - and the subsequent cost of caring for the refugees, it is an extremely economical investment that brings Africans into the process of monitoring their own society and allows for a timely international response.

The Chairman: Thank you.

Mr. Flis.

Mr. Flis (Parkdale - High Park): Thank you.

When I said ``shame'' at the beginning when Mr. Bezanson was telling us about going to Britain and then ``shame'' because there is more Canadian brain drain leaving us...we wish him well, because I think he not only is a Canadian internationalist but he will expand that Canadian internationalism and hopefully will appear before this committee again to share his expanded knowledge.

Professor Gross Stein opened by saying that unfortunately this won't be her last time to appear before the committee. I'd like to put on the record that fortunately it won't be the last time you appear before this committee.

The Chairman: Dr. Gross Stein often appears when it is a question of war and mayhem elsewhere. Maybe we should ask her not to come too often, because she seems to be an expert on conflicts.

Mr. Flis: This whole issue is very mind-boggling, but I'd like to begin with a question to Mr. Strong.

You talked about diversity of experience. Canada sort of grew up with the thought of strength in diversity. Because Canadians come from all parts of the world, bringing with them a great fund of knowledge and experience and so on, do we not have this diversity of experience? What kind of experience are you really talking about that will put Canada at the forefront in the future?

Not only Mr. Strong but others may wish to answer.

Mr. Strong: Mr. Chairman, the diversity of our experience really extends from our physical experience. For example, the chairman mentioned the Arctic. I happen to have lived in the Arctic during an early stage of my life. The experience of those Arctic regions is becoming more and more relevant to our international interests. In fact, Mr. Chairman, I've often thought that it might be useful for us, as we have a NAFTA with our southern neighbours, to have an AFTA, an Arctic free trade organization in information and knowledge.

The Arctic regions of the world represent one of the most important pieces of the ecological structure of our world community. They have a very major bearing on our future, out of proportion to the number of people living there. We are an Arctic power, and the experience we have had in developing and protecting our Arctic regions is a very major part of the Canadian knowledge base. Linking it with other Arctic powers in a knowledge network would be an extremely important use of Canadian experience. Yet the experience of the Arctic is very different from the experience, let us say, of building the educational and cultural organizations of Quebec. There's a whole experience there that is not the same as we've experienced in western Canada, for example.

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So in the cultural area, in the area of development of some of our urban areas.... Montreal and Toronto are widely recognized as two of the best cities in the world for living. That's an experience we have developed and we have to share. I'm saying there are a number of areas in which we have had an experience that is relevant to others, from which others can benefit, and which we, by interacting with them, can continue to build on and benefit from.

Mr. Flis: Mr. Bezanson, do you want to add to that?

Mr. Bezanson: No.

Mr. Flis: We lived through the Cold War period with two superpowers. We are now reduced to one superpower. If the future power will be knowledge based and soft power based, do you foresee new superpowers developing, and is this not a threat to the future of our planet?

Mr. Bezanson: That's a very profound question. What is it someone once said? Those who predict the future...when that happens, the Devil laughs. You've just asked me to predict a future.

This will be very anecdotal, Jesse. I've just returned from a trip to six countries in Asia, including China, Singapore, and Thailand. ``Superpower'' may be the wrong word, because we're thinking in terms of a geopolitical configuration that was consistent with the nation-state. What I think one can say safely is that centres of power are emerging, and these are really potent forces. They are cities rather than whole countries. They are parts of cities rather than whole cities. But within that Asian theatre I don't think it's any exaggeration to say we're seeing new power-brokers that will have an influence on the international course of events that we would have thought unthinkable had we predicted the future ten or fifteen years ago.

I think we're seeing a geopolitical shift that is enormous. I'm not the first to say that, of course, but I think we're going to see, in the words of Toffler, who talked about power shifts in his book, a massive power shift to different centres, and they will be individuals and groups rather than necessarily countries or nation-states.

Ms Gross Stein: If I could add quickly to what was a really interesting question, I think it's important also to think about the way the new knowledge is produced, the way it's transmitted, and the way it's shared. What Canada brings to this, and that's why I am so optimistic about Canada's leadership role, is a commitment to share knowledge, to broaden the base, and to use knowledge for certain kinds of purposes. To the extent that we get in early, shape the norms that govern it, and are active players, we will then have a disproportionate impact on precisely the kinds of problems you're worrying about -

An hon. member: And Mr. Paré was worried about.

Ms Gross Stein: - and you're worrying about.

The Chairman: Mr. Culpeper.

Mr. Roy Culpeper (President, North-South Institute): I wanted to add to that.

I think the kind of power that comes through knowledge is really a power that goes in the direction opposite to power in the traditional sense, of military power. Power that comes through knowledge diffuses power. To take IDRC's old motto, or present motto, which is ``Empowerment through Knowledge'', it's a way of involving the citizenry and the people in decision-making in the apparatus of governance.

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The kinds of things we're talking about detract from major power centres. Just look at what's been happening in Serbia lately with the communications media. Would that have been possible in a previous era where communications and diffusion of knowledge were less free?

I think that's the essence of this oxymoron we call soft power. Knowledge actually diffuses power and deconcentrates it.

Mr. Strong: May I add a footnote to that?

The Chairman: Go ahead.

Mr. Strong: The issue is so important. Our report is premised on the fact that Canada can indeed be one of these powers. The word ``superpower'' is perhaps not appropriate, but we can be a major power in the knowledge field - we cannot be one in the military field and we're losing it in the economic field - and should aspire to be one, but we will only be one if we do it as a matter of conscious policy and commitment.

The Chairman: Mr. Hanson.

Dr. Arthur Hanson (President, International Institute for Sustainable Development): I like to link the ideas of power and influence. One of the things we've been trying to do at IISD is create a greater openness, both within the United Nations system of reporting of what takes place in negotiations and through the World Trade Organization.

What impresses me first of all is how competitive this whole business of information is and how aggressively one must seek a role. On the other hand, one can do this very cost effectively and develop and maintain a position world-wide through use of the Internet and that kind of technology.

One example we've had is something called the Earth Negotiations Bulletin, which is a new kind of public good that reports daily on activities. Right now, there's an activity taking place that deals with toxic chemicals here in Ottawa. We have a team here. We have a team in New York reporting at the United Nations on the progress of the intergovernmental panel on forests.

We put this information out daily through the Internet. We've created, over a period of about three or four years, a million-dollar resource base, paid for by various countries' international agencies. They see the value of getting accurate information out quickly so it actually influences negotiations and particularly brings together the views of developing countries and industrial countries around the world.

We should keep this notion of influence in mind as we move ahead.

The Chairman: Mr. Flis, and then we'll try to keep everybody to five minutes after this.

Mr. Flis: There is an engineer in Toronto who has been travelling around the world giving talks at international environmental conferences, etc. This is Mr. Adler, who is promoting the elevated bicycle expressway system in developing countries, large cities, etc.

The World Bank has expressed an interest in it, and I want to thank Mr. Strong for promoting this truly Canadian concept. Unfortunately, he is hitting his head against a brick wall in all of this, and I would just like to appeal to the entire committee, through your influence with the World Bank and the international connections, to keep pushing this truly unique Canadian idea. Not only are we talking about sustainable development, we're tapping into everything in those developing countries, be it knowledge, technology, taking cars off the road and protecting our environment, and building up the health of people who bicycle to work rather than sit in their limousines, suffocating.

I know I don't have time to pursue that more, but I would like our panellists to take up this true Canadian challenge. Hopefully, in our lifetime, we'll see Bangkok or some city with an elevated bicycle expressway system.

The Chairman: Mr. Flis, speaking as someone who fights Toronto and Ottawa traffic on my bicycle, how about charity beginning at home and getting Mr. Strong to get us a World Bank loan for Toronto?

Mr. Flis: I've tried for 50 years to move our Toronto politicians. Unfortunately, they're still thinking two-dimensionally instead of multi-dimensionally.

The Chairman: We'll have to get them riding their bicycles, too. That's the problem.

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[Translation]

Ms Debien.

Ms Debien (Laval-East): Good morning, ladies and gentlemen. I would like to go back to the issues Mr. Paré raised earlier. I think he put his finger on the essential problem. I would also like to take this opportunity to thank the people who drafted this report and the topic for reflection that you have submitted.

Like Mr. Paré, I think you've done remarkable work. I also appreciate Mr. Strong's work and his participation in the Lisbon Group, I believe, where he also prepared a document entitled: Limits on Competitiveness: Towards a New World Contract, in which the group set out important topics for reflection.

On the issue of funding, I would like to ask a very specific question. Shouldn't the private companies that will benefit from selling their hardware participate in funding these knowledge networks? There is a significant amount of hardware involved, and significant trade interests, and I think that the private companies that will sell this hardware should be involved in funding the knowledge networks.

My second question is for Ms Gross Stein. Earlier on, you gave us some examples of knowledge networks. You briefly gave us three categories. I would like you to give us a bit more detail on these examples of knowledge networks.

The Chairman: Who would like to reply to Ms Debien's questions?

Mr. Strong.

[English]

Mr. Strong: I'll respond only to the question that was directed to me, the question about the financing. There are different components to the financing. There is, as you indicate, a very important component in terms of provision of hardware and services that are actually available through commercial channels and should be financed in that way.

Then there is a whole series of other things, such as, for example, the development of knowledge and of policy dialogue with developing country institutions, helping them to be able to define their own needs for knowledge, their own knowledge priorities, and how they can access that knowledge, because just making the knowledge available in gross terms is often overwhelming to them. They need definite help.

That's why we're saying that an increased portion of our development assistance should be going to help ensure that the knowledge we provide is the best of what our own experience makes available and is, at the same time, clearly targeted to their priorities and distributed to them in ways such that they can actually access it and use it.

So there is a major component of development assistance alongside a major component of commercial possibilities for financing. As Mr. Paré pointed out, there are other Canadian interests in the field of trade, etc., that are served by such networks, in respect of which the costs should be borne by those particular budgets and not by ODA.

I agree very much with the point you've made, but it is part of the several components of financing that I think we need to address.

Ms Gross Stein: Merci beaucoup. I talked about two networks. The first is a network that has focused on agricultural research and food policy. It was sponsored by IDRC, so I'm going to askMr. Bezanson to talk about that, as is one that relates to a question that Monsieur Paré asked, the African Economic Research Consortium, which has brought together African researchers and policy-makers from different parts of Africa who are struggling with problems of poverty and development. This work was started fifteen years ago with the clear focus of building the capacity of African researchers concerned with the problems of poverty to develop solutions that will work - based on the knowledge they bring - in their own communities.

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One of the interesting things about knowledge networks is that you need different kinds of knowledge to get good policy. You need the kind of scientific knowledge that has to focus on particular problems, but you also need knowledge about how communities and institutions work and about what you need in fact to take scientific knowledge and translate it in ways that will make sense in local communities.

This network has really been an outstanding success. The best illustration of that is that it has been funding research by Africans into a whole series of problems relating to poverty. Ninety-seven percent of the research that's been supported has been reviewed by outsiders and three-quarters of it has led to publications within Africa and outside of Africa in which the knowledge about useful ways to address problems of poverty has been addressed.

I have been a participant in one network, the Palestine policy network. Again, it was started by IDRC. At a very crucial moment in the late 1980s, this network brought together Palestinian policy experts who were confronting for the first time the question of what kinds of knowledge they needed about creating government structures and about moving into negotiations with no experience, as well as what kinds of expert knowledge they needed about water, development, the environment, and refugees.

That network has connected Palestinian researchers. Some live in the Middle East, some in London, some in Chicago, some in Toronto, and some in Ottawa. The network has brought the energy to bear and has focused it. I can speak from personal experience. Many of those people came to the negotiating table at some point, from 1993 on, and the resources, support, and knowledge they received through this network were absolutely critical to their participation at the negotiating table.

Again, that was a lead investment that Canada made. Frankly, as someone who travels often to the Middle East - people ask me where I'm from and I say that I'm from Canada - let me say that our participation in that network is what we're best known for in that part of the world.

The Chairman: Thank you.

Members, you might recall that we had CGIAR before the committee last year.

Mr. Bezanson.

Mr. Bezanson: I know you're trying to manage the time, Mr. Chairman, but if I may, just because Janice suggested it and

[Translation]

because it is a good question, it is excellent and it touches on the point Mr. Paré raised,

[English]

I want to give an example of something concrete to try to bring this down to where we can get our minds wrapped around it. Allow me to introduce this on a personal note, which is to state where I would base my judgment. I lived in Africa for ten years some time ago. I did work in towns and in villages. I have gone back to Africa several times in the position I currently hold, and I understand fully where Philippe Paré is coming from when he looks at countries like Rwanda, which he mentioned.

Largely, you see advancing poverty and misery throughout Africa. You don't see a lot of hope in large parts of Africa. The question, of course, that you have as policy-makers and that Canada has is what we can do about that. The basic question is what can we do to make a difference in a situation where a lot of the world is turning its back on Africa.

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This is where the idea of knowledge networks and building linkages is critical to the future of Africa. It is what ODA should be about, I believe, Philippe. There are mountains and mountains of knowledge, of information, of technologies that are needed for development. According to the experts, we are producing more knowledge today in five years than we used to produce in fifty years, but it's inaccessible to African policy-makers, to African community leaders, to African activists, to African farmers, to African teachers.

I go back to universities I taught in in Africa. There are no books. There are no journals. There are no laboratories. The whole thing is breaking down, with tragic consequences.

So the question we have asked ourselves is what we think can be done with limited resources, where Canada can make a difference in Africa.

Now I want to come to the CGIAR. We believe today one of the most important experiments that should be carried out, and it is not yet being carried out systematically, is to try to use the new technologies and to gateway, to filter, the information, because there's too much of it, but to make it available interactively to communities, to rural areas, in Africa.

I will be very specific. I'm going to take agriculture. The CGIAR is the most advanced system of knowledge research on developing countries in the world. It has been built with a large element of Canadian support, I'm very proud to say. The problem is that there is knowledge about how to deal with pests that come about unpredictably, about how to deal with dry weather, with the failure of rains when these things come, about storage systems that can be used by farmers, about what kinds of natural and chemical fertilizer will work and in what quantity. We know where prices are going in international commodities. But the African farmer doesn't get that. It's breaking down.

So our idea is to try to build community centres, as we used to have libraries in our communities. But the community centre is a connection to the world and a connection to the sixteen centres of agricultural knowledge in the world, so when a community leader on behalf of farmers faces a new pest, he doesn't go to an extension worker who is no longer there but he can communicate directly with the centre of excellence and get the best advice possible. Then maybe those individuals go out and try to help with its application.

I'm trying to bring this down to the concrete. It's very, very important. Our systems are breaking down everywhere in Africa, and I believe if we are going to make a difference one of the fundamental points we will have to come to is the mobilization of technology to transfer interactively the knowledge that is needed at the community level, without which I think the future for Africa, because others are racing ahead...and the Bill Gates comment in Davos, which you shared...it will fall farther and farther behind.

This, I submit, is one of the most profound development questions of our time. It's a great challenge to Canada to see if we can provide leadership throughout Africa in that regard.

The Chairman: Mr. Dupuy.

Mr. Dupuy (Laval West): Mr. Chairman, I have to say first how privileged I feel to be sitting at the same table again with Mr. Strong and Mr. Bezanson. When we were struggling with developing Canada's policy in the 1970s the world was a reasonably simple place. There was an east-west axis and there was a north-south axis. Of course this has changed.

I would like to hark back to some of the things Mr. Flis was raising earlier. At present perhaps the greatest development challenges are in three countries that may be crucial to the future of the world both in terms of security and in terms of development. These are obviously Russia, China, and India.

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For a number of reasons, these were not at the top of Canada's foreign policy. Russia, of course, we saw through the east-west challenge. China was largely closed, and our focus was more on Japan and the periphery of Asia. As for India, we had some unhappy turns of events as a result of our nuclear quarrel, and it became somewhat distanced from the Canadian focus.

The question I have on my mind is really twofold. First of all, are the traditional instruments that we have used in our international development cooperation policies valid, applicable, relevant to the economic development of these three countries, diverse as they are? Secondly, should we look at our policy vis-à-vis these countries, with the objective of world ability and world development, through bilateral systems? Or should we consider that the problems of these countries are so complex, so large, that they are far beyond the ability of Canada to deal bilaterally, in which event we have to design international multilateral ways of getting at the challenge raised by these three countries?

What I am basically saying is that there is a fundamentally different vision that we could develop in foreign policy, both in terms of security and development. Is that a proper perception, and how would you suggest that we respond to the challenge?

The Chairman: Mr. Strong, before you start your answer, I notice that one of the co-authors of the report has joined us. Senator Austin, if you'd like, please come and join your colleagues at the table. We'll invite you as an author rather than as a senator. We aren't often graced by the presence of our colleagues from the other House, but come and join us since you're one of the authors of the report.

Senator Jack Austin (Member, International Development Research and Policy Task Force): Thank you very much.

The Chairman: It's nice to see you here, sir.

I'm sorry, Mr. Strong. Go ahead.

Mr. Strong: Thank you very much.

I learned long ago to have great regard for the questions raised by our distinguished friend Monsieur Dupuy, because I always know there's a lot of thought and experience behind them.

I would submit that these three countries are all, in effect, special cases, as he will know. We had a long development assistance relationship with India. There was a period in which India and Pakistan were actually the principal recipients of Canadian development assistance. Of course, that relationship has changed for the reasons that Monsieur Dupuy has indicated, but also because these nations have changed.

China is about to become the largest single economy in the world. India is probably number three. They are countries that we cannot influence, except in very specialized ways. One is the way in which we deal with our multilateral relationships with them. There Canada has learned to have leverage through the multilateral system.

I might just add parenthetically, Mr. Chairman, that that's true of the knowledge business. The World Bank and the United Nations are also developing major knowledge networks, and Canada is in a very favoured position to lever its own influence in these areas through the multilateral system.

In terms of our influence on China, on India, and on Russia, I think we have to recognize that it will be a limited influence, and it's not very likely to be greatly affected by official development assistance. But if there is one area in which we can have a significant influence, it is indeed in the knowledge area. It is a source of great influence if you know how to manage the knowledge process.

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Mr. Chairman, you mentioned the Arctic. That, of course, is an area of tremendous synergy between Canada and Russia, so I would say that there is a real potential for influence, but not simply through the amount of our development assistance. It will come through the way in which we conduct ourselves multilaterally. Bilaterally, it is an important part of our relations, but they are particularly very good examples of how our influence can be multiplied through the kind of knowledge systems we are proposing.

Thank you.

Ms Gross Stein: There's one brief example here, as well. Without going into the history, which I'm sure you all know, Canada played a critical role in establishing a knowledge network in China, connecting many of the institutes that play a slightly different role in China than our institutes and universities do. Nevertheless, we brought together many of the experts in China and connected them to experts in Canada.

When you have professional contact with these people, they will tell you two things. One is that the opportunity for them to get access to knowledge, research, and policy development in Canada and elsewhere through this network was critical. Equally interesting is that, for them, one of the real advantages of the network was that they were connected to each other through this network in ways that were never possible for them before. Again, it was not a major initiative, but in terms of contribution, impact, and links with Canada, it's one of our most successful efforts.

The Chairman: Mrs. Gaffney.

Mrs. Gaffney (Nepean): I'm glad I have a few minutes. My question is very quick.

Welcome to the committee. What I really like the most about this report is that it's really a quick read. Parliamentarians don't have time to read great big, thick reports, so I really appreciate that.

In your opening comments, Mr. Strong, you talked about victims. Many were victims due to the budget cutbacks, yet you appreciated the fact that we were in a difficult situation. You mentioned some of the areas where cuts to the victims - Environment Canada, CIDA, and others - were leading to severe funding cuts to NGOs and other organizations.

We've been talking mostly about the knowledge-based industries. As an MP from the Ottawa area, where we have a lot of basic research - I believe NRC is knowledge-based, but I don't know, and Chalk River and Atomic Energy also come to mind - I'd like to hear your comments. I hear from the research scientists coming out of Chalk River or Atomic Energy, leaders in the world who have received tremendous recognition for what they have done and contributed. Do you feel they're victims? How would they fit into what you're talking about in terms of knowledge-based industries?

Mr. Strong: I was referring not so much to a group of individuals as I was to the institutional structures that have been the repository of the accumulated experience and expertise that we've developed quietly over the years. They have now become one of our great national assets, and they don't take that much to maintain in total cost terms. They would, however, take a tremendous amount of effort, money, and time to rebuild. Therefore, strictly from the point of view of ``Canada Incorporated'', if you want to call it that, it would just make business sense not to undermine or destroy those institutional capacities that are among our best assets, especially when it doesn't take that much to not only maintain them, but to build on them the kind of future we envisage in this report.

I'm not an expert on atomic energy, but I do know a little bit. For three years I ran Ontario Hydro, the largest company that runs CANDU nuclear plants. I do have an appreciation of the value of the expertise that was built up over the years with Chalk River, but let me only say that, to the extent that there is a major future for nuclear power with CANDUs, it is not likely to be in Canada. There will be some increase of course over time in the demand for electric power in Canada, but we have a great overcapacity at the moment.

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The prospects for the continued development of the Canadian nuclear industry, which is mostly tied to the research and researchers at Chalk River, are really international, and the whole question of nuclear power internationally is still a very major issue. In fact yesterday I met for some time with Mr. Hans Blix, the head of the International Atomic Energy Agency, to discuss this very issue.

I think nuclear power has a future. The extent to which Canada figures in it is very much up for grabs.

When I was with Ontario Hydro, I proposed a merger between Ontario Hydro Nuclear and Atomic Energy of Canada. That's because a fragmented nuclear industry in which the research and development in the design is fragmented from the operating capability, which is where the actual money is generated, does not put Canada in a very good position to pursue the extension of its nuclear markets internationally. We have a fragmented industry, and if it has a future, we've got to get the elements of that industry together.

I make that as a comment in response to your very good question. The nuclear industry is not just another knowledge industry. It's based on basic research, but its future now is more a matter of where the markets are.

Mrs. Gaffney: Could I have another quick one?

The Chairman: Well, I've got Mr. English. We're now over our time already.

Mrs. Gaffney: Okay, I'll leave it for Mr. English.

Mr. English (Kitchener): Go ahead.

Mrs. Gaffney: I wish our colleague Len Hopkins was here, because he's constantly talking about medical isotopes. I don't know all this terminology and technology, but he says that in the medical field we were the major supplier of something that was very necessary coming out of that industry, and now we will lose that to the United States. Is that correct?

Mr. Strong: Well, Mr. Chairman, this is one of the spin-off opportunities that comes from the nuclear industry. It is very important in the sense that it's a useful technology, but relative to the economics of the nuclear industry as a whole in Canada, it's not going to be decisive in determining the future of that industry. There are a number of important spin-offs from our nuclear industry, including this medical technology, but they are not in themselves sufficient to, in effect, give that industry a new and revitalized future.

The Chairman: Perhaps I could follow up on Mrs. Gaffney's point, Mr. Strong.

This committee is shortly going to be considering the whole issue of nuclear disarmament. There will be a very extensive review, which we will not have an opportunity to get into extensively this spring.

Clearly, when we were in Russia, we discussed the issue of the disposal of plutonium. It certainly seemed to me anyway that the research capacity of Chalk River, if we are going to be involved in any way in contributing to this, is going to be extremely important. If we don't preserve that as one of our knowledge bases...there's no point in us going around the world talking about participating in the disposal of plutonium if we don't know what the hell we're talking about.

Would that be a fair conclusion?

Mr. Strong: Well, we do know, Mr. Chairman, as you implied in your question, a great deal about what we're talking about in this field. Our nuclear research capabilities will have some relevance beyond the actual market for CANDU reactors.

But to the extent that this market diminishes, the funds available to support basic research will obviously be at risk.

The Chairman: Right.

Mr. English, did you have a quick follow-up? I think Mr. Culpeper will forgive us if we drift a bit into his time.

Mr. English: Thank you, Mr. Chairman.

I too congratulate you on the excellent report and its brevity. In reading it quickly, I noticed that you talked about other examples, other countries, particularly the United States, with its foundations and their great generosity in this kind of work.

You mentioned The Economist, Mr. Strong. If you go to the back of The Economist and see these ads for things of which you're talking about, they're almost always set in the United States or Britain. Mr. Bezanson's mood perhaps indicates this.

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You talk about the private sector. I know in the case of two of your institutes that I've heard you previously talking about the need to go to the private sector to find support. I've also heard how difficult it has been in Canada. I read recently about Bill Gates, who is a drop-out from Harvard, giving $20 million. I know, as does Professor Stein, how difficult Canadian universities are.

Perhaps this should be directed to Mr. Strong, but others can answer too. Why is the Canadian private sector so reluctant to become involved in activities of this kind? I think you argued very well that these things are so important to Canada in the future, not only in terms of its role in the world, but in terms of its own economy.

Mr. Strong: I'm sorry to monopolize the responses, Mr. Chairman, but I'm trying to answer only those that are directed to me.

The private sector in Canada is becoming more responsive. We do not have the same huge fortunes in this country, but we are beginning to have some of them.

We saw recently the major gift of one of our leading entrepreneurs, Mr. Rotman, to the University of Toronto. I think as Canadians have become richer.... We don't have the same tradition of internal generosity, let's say, as what we've had in terms of our generosity to the world, but we're learning. I think some of our individuals who have profited by the improvements and opportunities in our economy over the years are beginning to be more forthcoming.

Unfortunately, we do not really have the great fortunes here, but we have more than maybe we think we have in the endowment of major foundations. We do not have that foundation structure in Canada that has been financed by the private moneys they have in the U.S., which has been a source of an awful lot of their most enlightened initiatives. So it is a deficiency. I'd like to think we're improving in that department, but we've still got a distance to go.

Ms Gross Stein: Just to echo Mr. Strong's comments, I think I'm optimistic as well that we're beginning to see something of a change, but we have a long, long way to go. In fact, it's a major problem.

There are two issues that might -

The Chairman: Be careful what you give away, Ms Stein. Professor English comes from another university. He's really on a fishing expedition.

Ms Gross Stein: Professor English and I, despite our different institutional affiliations, have a collaborative knowledge network.

Let me bring two issues to the attention of the committee.

The first one is taxation policy. It is clearly possible to provide incentives for the private sector to invest in research and development. This is a strategy that has been used elsewhere with great success. I think it's something that would be excellent if the relevant committees took that issue up, because it is such a key problem.

The second area that might be worth thinking about as well in this connection is the whole issue of joint ventures and partnerships in the private and public sectors. This is clearly where the university sector is moving now. They're looking at initial investments supported by matching investments both from the private and public sectors. So in terms of sustaining knowledge networks, this is a key pattern.

The third point involves users. We haven't had a chance to talk about this, but it's an important part of a sustained look at knowledge networks. There are some networks, such as the one Mr. Hanson just mentioned, that are sustained by those who use them. That's because they recognize the cumulative value of the information you get from these networks that could be much more difficult to get, both financially and in terms of time. Again, some knowledge networks will easily attract users. As for others, such as the kind we were talking about earlier that address the problem of poverty in Africa, it will be much more difficult to attract private users.

So these three sets of issues are all practical concerns that we would hope very much you would consider in your future work.

Mr. Bezanson: Could I slip in with your indulgence, Chair?

The Chairman: Sure.

Mr. Bezanson: Mr. Chairman, I have a point for this committee. I should preface this by saying that I'm lobbying at this point.

The Chairman: If you're lobbying, go to the finance committee; there's no point in lobbying here.

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Mr. Bezanson: I'm lobbying you to go to the finance committee, Mr. Chairman.

We have been successful. Janice mentioned changing taxation policies. To an extent we at IDRC have been successful in raising funds from different sources - John English knows this - including some from U.S. foundations. One of the problems we face, a problem directly related to public policy, is a perception in central agencies as we raise money that public funds should be decreased. Of course when you do that you remove the incentive, and you will not get people going out to raise funds if for raising a dollar you lose a dollar.

The second point, which is unashamed lobbying on this, is that when people give you money, they often give it on the expectation that you will raise more. So you have to hold the money, then go out and try to raise more money. Of course, in a lapsing grant system, that raises a further question. As we have money at the end of the year, March 31, a central agency may say, ah, but we need this back; you're not allowed to hold money. Again we have an incoherence between the intention of forming public-private partnerships and the public fiscal arrangement being at variance with that.

The reason I raise it at this point is that this is a matter that will affect us immediately on March 31. I bring it to the attention of this committee at this time.

Thank you for the question, Professor English.

The Chairman: Before we move on to our next session, Mr. Strong, since you're here and you have important functions at the United Nations, I wonder if you could take a minute to share with the committee your views on where we're going with the United Nations reform and the potential for that taking place in a way that would be satisfactory for Canadian foreign policy.

Mr. Strong: Mr. Chairman, you challenge me. You give me one minute to give you the world.

I'll only say that reform of the UN has been a subject of dialogue and study and reports and recommendations over many years. We are moving now to a stage where reform needs to become a matter of action.

The current Secretary General, Kofi Annan, brings to his role more experience and knowledge of the UN than any previous secretary general, and the political dynamics are dictating that reform be his priority. I'm simply helping him to do that.

I do believe reform has to focus on more than slash-and-burn cost-cutting. It has to focus on what kind of a United Nations our world community needs and what kind it will be willing to support in the new millennium. What are the functions of an organization that has as its comparative advantage its universal constituency and its global nature? Does it need to do other things? Should it not be leaving a lot of things to the specialized sectoral organizations and regional organizations that have developed over the years and emphasize those things that are truly global?

We've made a decent start. At some point I would be very happy to give you a further report. I've been in the UN.... I guess this is the seventh time I've had an under-secretary general level role, so the UN is not new to me, but this particular responsibility is one I have just taken up. When it gets further along, Mr. Chairman, I will expect to be getting good advice from this committee and hopefully an opportunity to report to you from time to time.

The Chairman: Thank you, sir, for that comment. As you know from having looked at the report the members of this committee prepared with the Senate at the beginning of the term of this Parliament, we consider the United Nations and Canada's role in the United Nations a key part of our foreign policy and one where we can reflect our Canadian interests and values. If I may say so, I think it's a great privilege for Canada to have someone of your stature and your ability there as an under-secretary, helping this process, because it's one we believe is important for Canada and Canadians.

I would like to thank the panel for coming today. These are very complex issues. Our role as politicians is to try to ensure this new knowledge, which some of us who are not computer-literate, quite frankly, may not even be capable of understanding, but at least we share them with our constituents and ensure there's a constituency in Canada that supports your important work.

Thank you very much for your report.

We're adjourned for five minutes. Then we'll return to hear Mr. Culpeper.

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The Chairman: Mr. Culpeper, we haven't left you as much time as we should have, but we sure took advantage of a development issue that was in front of us. So I hope you'll forgive us for that.

Thank you very much for coming to the committee to talk to us this morning about your Canadian Development Report. Perhaps you could introduce the subject, and then we'll open it up for questions.

Mr. Culpeper: Thanks, Mr. Chairman. Thank you for the opportunity to discuss the Canadian Development Report. We've come to discuss it with the committee and to seek your reactions and your suggestions, because this is the first of an annual series of reports that will be the flagship of the North-South Institute.

[Translation]

I would like to start by introducing my two colleagues from The North-South Institute:Ms Melanie Gruer and Ms Alison van Rooy.

[English]

I'd like to start by making two points: first of all, to explain what it is we're trying to do through this report and why we have produced it; and secondly, to draw out some of the key findings and results in the report. Then I will ask my two colleagues to make some brief presentations.

Mr. Chairman, we're very proud of the report. We've been thinking about it for some time, and we earnestly hope that it's going to make a very valuable contribution to all those, such as members of this committee and their staff and those generally throughout Canada, who concern themselves with development, the analysis of development issues, and the analysis of policy implications for Canada and for the world community. We believe the Canadian Development Report is Canada's first comprehensive annual survey of Canada's total relationship with the Third World.

Ever since 1976, the North-South Institute has in fact taken a broad-brush approach to the issues of development. We've never thought of development as an issue to be tackled through the aid program alone; we've always approached development issues through the prism of trade, financial interaction, debt, and more recently through issues such as human rights and democracy. Aid in fact is a very small part of our total relationship with the developing world. Even in 1976 aid was dwarfed by the volume of trade with the developing countries.

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You will find in the report a full set of tables that for each of 130 developing countries indicates Canada's relation with them, in the aid program, in trade, with respect to debt. We also have some tables on immigration; the people linkages between Canada and the developing world. There are also statistics for fifteen countries in transition, in eastern Europe and the former Soviet Union. We believe such an effort of putting all this information together has never been attempted, and again, we hope it will provide a very valuable resource for researchers and policy-makers.

I think it's worth emphasizing the non-aid links between Canada and the developing world as we slide into what I've referred to as a ``post-aid world''. By that I mean not that aid is disappearing but that it's becoming more and more a small part of the relationship between the north and the south.

For example, just ten years ago the level of ODA, official development assistance, was about three times the level of foreign direct private investment from north to south - in 1985, to be exact. Today the reverse is true. The level of foreign private investment in the developing world is about two and a half times the level of official development assistance. So we've seen our world turned very much inside out or upside down in the space of ten years when it comes to the things that tie the north and the south together.

To pursue that line of argument a bit further, we at the institute feel the front line of our relationship with the developing world now more than ever is not the government and not government-funded aid programs but private trade and private investment. This raises some interesting issues. The basic motivation of aid programs, of course, is to raise living standards and to reduce poverty. In contrast, the basic motivation of private investment and trade is the profit motive. But just as the altruistic motivation of aid has not stopped the donor community from promoting other more self-interested objectives, whether they are commercial or political, the self-interested motive of the private sector, i.e., earning profits, does not prevent it from achieving wider objectives of social equity.

Those are the kinds of issues, Mr. Chairman, we are going to try to explore in our next issue of the Canadian Development Report, for 1997-98, which will be entitled ``Canadian Corporations and Social Equity in Developing Country Markets''. Let me now turn to some key findings in the report this year, findings that stand out from the report.

First of all - and this emphasizes a point I made earlier about the relationship between our trade efforts and our aid efforts - the two-way trade between Canada and the developing world in 1995 amounted to $44 billion. That's a level fifteen times the level of our aid program, which was around $3 billion. The level of developing-country exports into Canada alone was some $17.6 billion, which is a fairly large sum in comparison with our aid program.

A very interesting contrast in some of the analysis we did led us to the following conclusion. The amount flowing to Canada from all our loans and investments in 1995 was in the order, conservatively estimated, of $4.8 billion. In contrast our aid, as I have said, was only $3 billion. So in a sense, Canada is getting back from the developing world something like one and a half times as much as it's providing through the aid program. That was a rather interesting result we didn't really anticipate. We asked ourselves how these two magnitudes would compare - what Canada was getting back compared with what Canada was providing through the aid program - but we didn't know it would stand in that kind of contrast.

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The Chairman: Sorry to interrupt, but you're saying the return we're getting from investments in developing countries is $4.8 billion.

Mr. Culpeper: Yes. That's through loans we have made through either the public sector or the chartered banks and through profits that are being remitted by Canadian firms that have invested in developing countries.

The Chairman: Can you get a statistical handle on that?

Mr. Culpeper: Yes. We started by defining the outstanding stock of investment, and those figures are fairly firm. They're in the order of about $60 billion. From that base of outstanding investment and loans, we imputed a flow of income in the form of profit remissions on private investment, interest on loans that have been given and so forth. On very conservative assumptions, we estimate that the reflow to Canada is in the order of $4.8 billion.

The Chairman: We might come back. I thought our investment in the United States was about $60 billion.

Mr. Culpeper: Let me just draw out a couple of other interesting results we came up with. Canada's deficit in merchandise trade with the developing world was in the order of $9.2 billion. In other words, we imported $9.2 billion more than we exported to the developing countries in 1995. Again, this figure is about three times the level of our aid program.

We're going to update these tables from year to year so people who are working in this area will have a series of statistical data to see which way the trends are going and so forth. We're also hoping to add to the tables in the Canadian development report. For example, we're working on adding a table on private giving through development NGOs to the developing world. We're working with colleagues in the CCIC, the Canadian Council for International Cooperation.

Let me just conclude by saying the report is not statistics alone, like some other international reports we have in some ways tried to emulate, such as the Human Development Report and the World Development Report. We will have a thematic discussion. This year's discussion is on the issue of fairness. We've chosen that theme for many reasons. One reason is it's part of our motto, ``Research for a Fairer World''. It also relates to what I referred to earlier about the way the world is evolving, and in particular evolving in the direction of more private interactions between north and south.

We feel that the issues of fairness expressed through labour standards, labour conditions, child labour, and environmental impact are going to come more and more to the forefront in the north-south interactions of the future, and the front-line agents in that interaction will be the private sector. Therefore, it's vital for institutes like ourselves and others who are concerned with development to engage the private sector in dialogue on these kinds of social equity issues.

We've done this year's report by approaching the issue of fairness through a series of prisms. There's a chapter on economic policy, which I drafted myself. There's a chapter on gender equity. There's a chapter on globalization and trade. There are also a couple of chapters that were drafted by my colleagues who are here with me today.

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Dr. Alison van Rooy, who is our expert on civil society and is engaged in an in-depth long-term project on that very subject, explored the issue of fairness through the vantage point of grassroots organizations and civil society. I'd like to ask her to say a few words about the key findings and insights of that chapter, if I may.

The Chairman: Thank you very much.

Dr. Rooy.

Dr. Allison van Rooy (Researcher, North-South Institute): Thank you.

[Translation]

First of all, I would like to thank you for giving us the opportunity to present some of the ideas drawn from our reflection in the report. I will start in English.

[English]

I'll talk a little bit about this chapter on civil society and group them in the following way. There are four reasons why I think civil society has come up as a term, as a phrase with quotation marks around it, over the past six years in particular and why that has become part of foreign policy currency around this table and others. I'll also tell you four things that I think are happening in grassroots movements and in civil society in the world and in Canada and then offer four ideas for Canadian action, one of which is already afoot.

But I'd also like to note

[Translation]

that I worked on the statistical annex and I will be able to answer questions on that if there are any. The numbers you see reflect the importance of Canadian activity in the south, in terms of assistance, our trade relations, immigration, etc.

[English]

There are four reasons why I think civil society has come to the table as a basket of ideas - very virtuous ideas. We talk about good governance, pluralism, democracy, and citizen participation, and the term ``civil society'' has taken on almost a panacea tone. I think there are four main reasons why that has happened, and I'm sure the committee could add others.

One of the first is what, for some, seems like an excessive quickness to dismiss the state, to roll back the state, and in a lot of Canada's relations with developing countries, particularly through multinational, multilateral institutions...very much concerned with rolling back the state, making civil services smaller, having governments work within their own budgets. One of the repercussions of notions about shrinking the state is the assumption that voluntary organizations are going to replace activities and services the state once gave. That has raised the notion of civil society in our eyes as a replacement category for a shrinking state. It also happens in debates we have here in Canada and in Ontario.

A second reason why I think civil society has come floating to the top of the agenda has been the activities following the dismantling of the wall in 1989 and changes in eastern Europe, where, importantly, there's also a very strong academic, intellectual community talking about civil society. For a number of people, particularly in the United States, the promotion of civil society is seen as a tool to promote economic liberalization. For anybody who's reading about civil society and the former Soviet Union, or civil society in China, most of the talk in debate there is how civil society is going to transform those countries into free markets.

I think a third reason is that civil society has become a critical part of an international human rights regime. Particularly in the past ten years, human rights has become a stronger criterion for our relations with other countries. Countries are regularly castigated, embargoed, and invaded on human rights grounds, and that has risen to the top of foreign policy criteria.

A fourth and last reason, I think, for our interest in civil society has been shifting the blame for failures in development, not on things that happen out there but on the quality of governance in other countries. Increasingly, we're making our aid and other relations conditional on the quality of governments and governance in other countries. There civil society is seen as a critical element in creating, promoting, checking democracy. We understand that as the underdog, the good guy, in the face of bad government.

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Now I'll touch briefly on four things that are happening in the debate on civil society, if we agree it has become an interesting thing to talk about, things that affect what Canada should and shouldn't be doing.

One is that we're seeing a tremendous growth in the civil society arena. Groups are forming at exponential speeds all over the world, despite very serious difficulties. Some of the reasons have to do with changes in information technology. Others have their own origins. I spoke to this committee a couple of years ago about Canadian NGOs and what they were doing.

A second thing to note about civil society movements these days is that tremendous repression is growing in some countries: Kenya, Malaysia, Slovakia. What is happening in eastern Europe right now is very important. El Salvador.... I was just in El Salvador, talking about new legislation there to repress civil society organizations.

A third point - and certainly Maurice Strong would have been one of the world's greatest experts on this topic - is that international organizations are changing how they deal with NGOs. The UN in particular has been at the forefront with its Economic and Social Council, all the United Nations conferences, including the ones Maurice Strong has chaired, world trade organizations, the World Bank. The number of liaison mechanisms has been growing spectacularly.

A fourth thing that has happened is the amount of funding through aid channels of NGOs and grassroots movements in other countries by Canada and by our colleagues in the OECD. It has grown at the same time as there has been a backlash in some countries, including Canada, where Canadian NGOs have received a disproportionately large cut compared with cuts in other parts of the programs.

There are four ideas I will leave with you, quickly, partly to encourage you to read them if I don't explain them, about what Canada could be doing to involve itself in this debate and to improve its own performance. One is a proposition for a global community foundation, in essence a United Way based on private Canadian dollars to fund the activities of development NGOs elsewhere.

A project is under way through the CCIC, the Canadian Council for International Cooperation, and the Ontario affiliate, called the One World Fund. I would encourage you to invite them to come and talk to you a little about how that might work, new ways of leveraging private funds for international development.

A second idea is to look at the way we fund domestic grassroots organizations in Canada, working on development issues at home. This idea would involve a public interest funding board that would rationalize, make more clear and transparent, how we fund our own organizations here.

A third idea is to encourage Canadian leadership in the creation of donor pools in developing countries, so the Canadians who are sitting around the tables with the Norwegians and the Swedes and the Americans, trying to decide what they are going to do in, say, Mali, have a much more concerted policy and much more integrated donor coordination. In some countries of the world Canada has been the leader. Kenya is a good example.

The last idea is to suggest the annual publication of a Canadian report on promoting global justice, which would be half authored by the Canadian government and half authored by a team of voluntary organizations and others to treat equally, measure for measure, key issues in Canada's relations in the south. It would serve not as an annual report card but as an annual point of debate on the key issues facing Canada in its relations with the rest of the world.

The Chairman: Thank you, Ms van Rooy.

Ms Gruer.

Ms Melanie Gruer (Communications Officer, North-South Institute): Thank you.

I wrote the report's final chapter, which is titled ``Southern Images, Northern Voices''. It's a study of the Canadian media's coverage of the developing world. In the course of my research I met with about thirty leading Canadian journalists who work in television, radio and print and who have extensive knowledge of the developing world.

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Based on my conversations, my main finding, which really shouldn't come as a surprise to any of us, is that budget cuts at media outlets have contributed significantly to the dramatic decrease in the coverage we get of the developing world. This is as true for readers of The Toronto Star as it is for those of us who watch and listen to the CBC.

I discovered that reporters have almost no money to travel any more, in Canada or outside Canada. There is little space in newspapers or air time on radio and television programs for foreign news. The other thing is that there is only a very small number of Canadian news bureaus operating outside Canada. I think about fifty full-time foreign correspondents are Canadians. Right now there are no full-time correspondents in Africa or in Japan, the world's second-largest economy.

One example of how all of this has affected Canadian journalists is the case of Brian Stewart, whom you know as a senior correspondent at CBC television. Mr. Stewart has covered stories all over the world and was the first journalist in North America to get footage of the 1984 famine in Ethiopia on the air. As he told me, the golden age of foreign correspondents is over. Today he has very little money to travel outside Canada so that he can tell Canadians about the world outside their borders. Reluctantly, he has to look for creative ways to get international stories on the air from his office in Toronto.

[Translation]

The polls that were conducted for CIDA revealed a direct link between media coverage of development issues and public understanding and support. According to a 1995 study, Canadians rely almost entirely on the news media for information on developing countries.

[English]

I'll close by asking all of us a question. If the Canadian news media has such limited ability to tell us about the world outside our borders, how can public opinion be strengthened towards a more innovative foreign policy?

Thank you.

The Chairman: You put your finger on a tremendous paradox. Everyone sitting in this room is more than conscious of the fact that we're increasingly involved in an interdependent world in which many of our political decisions and other decisions cannot be made without taking into account the larger global context within which they have to be made if they're going to have any coherence or effect. Yet we are very conscious of the fact that our sources of information are shrinking, at least in terms of intelligent analysis. We're getting CNN instead. That's not necessarily to deprecate CNN, but it's sort of a lightning-rod for the observation that other voices are being squeezed out.

This committee is constantly bombarded with these deep and perplexing philosophical questions. If you can tell us about some way in which we can encourage the Mr. Stackhouses, or if you can tell us about a way to encourage at least the owners of these enterprises to provide the funding necessary for that reporting, which enables Canadians to better understand the world in which they live - as a matter of our own governance and our own democracy - it would be very helpful.

Ms Gruer: There are a few means that journalists are using now that help them in their coverage. One example of that is the Internet and the tremendous amount of knowledge on the Internet.

When I was interviewing a journalist at La Presse, Jooneed Khan, he told me that he was covering the elections in India in the fall, and of course there was no money to travel to India. He picked up a lot of his knowledge from the Internet, from various sources, and from that was able to write a short analysis of the elections in India.

There are other ways too. There are fellowships, sometimes supported by the government, through which journalists are sent to countries to study them and to write about them.

Another recommendation that I've made in my chapter is that every media outlet in Canada should be sending at least one reporter overseas at least once a year. It doesn't take a tremendous amount of money. This is as true of The Globe and Mail as it is of any small paper in the prairies. A growing number of reporters are interested in international affairs but lack funds.

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The Chairman: Were you here for the evidence of the previous panel about the information web? I was struck by Ms Gross Stein's description of the way the Palestinian information system worked and the Canadian participation. Are we being perhaps overly terrified about what I call the CNN factor, and particularly the fact that the print media seems to be constrained in the amount of money it can spend to keep foreign correspondents abroad, which is a complex factor?

If you watched what happened in the United States, for example, this was often attributed to changes in U.S. tax rules because correspondents had to pay U.S. taxes in a way that made it unattractive to be abroad. There are all sorts of factors that come into this.

Leaving those aside, I began wondering, when I heard Dr. Gross Stein, whether the picture wasn't that bleak, because there are new alternative forms of information-gathering and dissemination out there, like the Internet, which you referred to, and other ways that maybe we should be more aware of and encourage. I don't know.

We were struck when we had the young people speaking to the committee about child labour, from a high school in Mr. English's area, who were very knowledgeable about India. I asked how the heck they knew about that - we can't afford to travel in this committee. They seemed to know more than anybody. They said they talked on the Internet. They sort of looked at me as if I were somebody out of the stone age.

Ms Gruer: Among the journalists I spoke to, there's a lot of support for the Internet. It really does help them do their jobs. At the same time, there's a growing number who are skeptical about the Internet. It's very unknown how all of this is going to evolve, and for a journalist it's crucial to have reliable sources. When you pull things off the Internet you don't always know where they're coming from. You can't be completely sure.

The Chairman: Mr. Paré made a point about precisely that. If we're going to be restricted to high-tech wizardry for our information and dissemination, we're going to be restricted to the folks who have access to the high-tech...which is dangerous, too.

[Translation]

Mr. Dupuy: Would Mr. Paré give me permission to ask a question? I know that it is his turn.

Mr. Paré: I will make my comment after you.

Mr. Dupuy: Thank you. I will be brief.

[English]

What you say is really quite fascinating, but there is another dimension that I'm surprised has not come up. I'm close to a number of Canadian communities of foreign origin. I have in mind, for instance, the Greeks or people coming from India. They are remarkably well-informed about what is happening in their countries of origin or the regions from which they came. They travel regularly. Why is this very considerable, first-hand knowledge not being tapped by the media?

Ms Gruer: I think it's a good question. A number of the journalists I spoke to who are interested in international affairs have a great hope that their mainstream papers and television and radio stations will tap into this community because it is a great source of information. As Canada becomes more diverse, this will become more and more important for mainstream media.

Mr. Dupuy: Perhaps the point I am making indirectly is that the lack of more reporting in the media may be the result of programming decisions or editorial decisions more than financial problems, as you suggested.

Ms Gruer: This may be true. A reporter at The Toronto Star showed me a kind of survey that was done of its readership. It was broken down by ethnic group, I guess you could say. By far, the majority of its readers are of American or British descent, so that's where it puts the majority of its coverage, although I would think that in Toronto that may be changing.

[Translation]

Mr. Dupuy: Thank you, Mr. Paré.

[English]

The Chairman: It had better change or it will lose market share in a hurry.

[Translation]

Mr. Paré.

Mr. Paré: In the conclusion to the overview to the report, it says, and I believe these are Mr. Culpeper's words:

The real way forward is to increase spending on human development needs,...

You are also a member of Mr. Strong's group. Were you convinced by the answer given to me earlier? As for me, I still doubt the fact that we can use ODA, which is losing steam. We know that over the past 10 years, Canadian ODA has been reduced by over 50%. If we take another portion of it to ensure knowledge is exported, will we not be weakening another instrument that's already losing speed?

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You also said that the private sector invested 15 times more abroad than the Canadian ODA. However we must bear in mind that there is no code of conduct governing the intervention of Canadians who are working on the international scene. You also pointed out that private companies are not motivated by development, but by making a profit. For the private sector to play such an important role in development, is it not essential that the Canadian government focus on establishing guidelines for all Canadians involved on the international scene?

Given the generalized decrease in official development assistance granted by OECD countries, with perhaps the exception of the Scandinavian countries that, I believe, continue to contribute, is it not essential for trade treaties to include social clauses that would ensure a minimum of development for the poorest people?

Finally, Ms Gruer, you talked about an "endangered species", correspondence. Since Canadian correspondence abroad is an endangered species and since you also noted the importance of raising the awareness of Canadians, which is also important, how do you explain that at more or less the same time, CIDA is cutting funding for NGO's whose mission it was to make the Canadian people responsive? I admit that I have a lot of trouble understanding the logic there.

Mr. Culpeper: Your first point deals with human needs. Of course, I agreed with Mr. Strong. I was not a member of the committee, but like Mr. Bezanson and Mr. Hanson, our three research institutes sponsored the exercise. In my view, there is no conflict or competition between research and knowledge acquisition on one hand and human needs on the other. In my view, it is possible to reach both objectives at the same time; in other words, it is possible to increase the knowledge of the people who are the most needy on food and grain production, as Mr. Bezanson said. I do not think that the two are conflicting objectives.

Although the issue is very interesting, I doubt it would be possible or necessary for the government to establish new standards to govern private sector intervention in the Third World and among the most underprivileged. Many private sector steps or initiatives are beyond the scope of the public sector.

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There are however channels. I remember that last year, Mr. d'Aquino suggested that private Canadian companies benefitting from the support of Canadian government or organizations such as CIDA and the EDC should be subject to regulations relating to their own behaviour, to child labour standards and to environmental standards.

Occasion can arise when both sectors are involved. However, sometimes the private sector acts without any public oversight. What should be done then? I suspect that when the private sector works outside a public program, it is perhaps in a better position to have a code that the sectors respect in their trade or investment actions.

I will ask Melanie Gruer to answer your third question.

Ms Gruer: I cannot answer on behalf of CIDA, and I do not know where Canadians get their news. The reporters I talked to didn't have much hope that it would change. As you know, more and more of our news come from several non-Canadian sources such as Agence France Presse, Le Monde and The Guardian. CIDA should perhaps review its decision to cut budget for NGO's that are working in the area of education with a view to developing certain countries.

I know that the government has many programs that support reporters from Radio-Canada International and TV-5. It would perhaps be important not to cut Radio-Canada budgets and to provide support for programs that deal with the Third World and reporters who want to travel there.

Mr. Paré: Could someone comment briefly on the role that social clauses could play in trade agreements in support of development in developing countries?

Mr. Culpeper: I've always believed that the social clause was very important. The difficulty resides however in implementation. It is one thing to have a social clause and another thing to ensure that all of the clauses are respected. I think it is very important for us to play a major role in the international labour organization. We should not place all of our trust in the world trade organization as far as labour conditions are concerned.

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When faced with an organization like the International Labour Organization in Geneva, that has existed since 1919, that has acquired great expertise and that has an influential mandate, it is very important for it to be associated with workers' issues.

Ms van Rooy: I would like to add a point that may interest you on basic human needs. Last year, the North-South Institute published a study entitled A Partial Promise.

[English]

A Partial Promise.

In that study, we looked at CIDA expenditure on basic human needs categories for bilateral programs only. It's very difficult to count multilateral program impacts on basic human needs.

Our first effort at the numbers, which were initial numbers published by CIDA themselves, was that depending on whether you counted emergency food aid as support to basic human needs, you either had 13% of bilateral spending averaged over the past few years or 21%. The results were fairly controversial because of course 25% is the only number that appears in the Canada and the world commitment.

We are now trying to look at new figures, and we'll publish an update in some form, partly to help this committee and partly to help CIDA, but also to let the Canadian public know. I think the issue is not so much whether it's 21% or 24%, or if it's higher in one region, but the unasked question, what are we doing with the remaining 75%? That would force you to ask questions about how much Canadian aid is tied to Canadian jobs and Canadian procurement in Canadian goods, to the detriment of those living in other countries. How much Canadian aid is spent for purposes that cannot on any grounds or few grounds be called developmental, and if we're doing that, for what reason?

So the study itself raises questions about percentages here or there, but the larger question is, let's look more seriously at where we're spending Canadians' money and for what reason.

[Translation]

I can easily send you a copy of the study, if any of you are interested in receiving it.

The Chairman: Before giving Ms Debien the floor, can I make a comment on Mr. Culpeper's answer to Mr. Paré on the social clause? It is an issue that is of great concern to us, since we recently participated in the WTO proceedings in Singapore, with Mr. Sauvageau who is not here.

I was personally a bit discouraged with what happened. Not really with the idea of making all decisions binding, but with the idea of having to make a decision based on the consensus of 130 countries, whose views and perspectives vary enormously in this specific area.

A grave concern is, and I think that you address it in your report, that to have an effective policy immediately, we have to work together, on a multilateral plan. Canada can make pious wishes if it wants to, but that does not help anyone and there is no concrete follow-up. We need to act where our action will be effective, starting at the multilateral institution level, but to do so, how do we get consensus on the action to take? As soon as China, Indonesia, Vietnam and certain other countries are involved, it seems to me that... Within our own Parliament, it is sometimes difficult for us to make joint decisions, imagine what it can be like in these multilateral institutions.

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Consequently, how does your institute believe that Canada can act more effectively within these institutions, if I'm correct in thinking that this is the only means it has for exerting an influence?

Mr. Culpeper: Yes, I agree. A multilateral decision would be preferable, however, I feel that the absence of such a decision should not be used as an excuse for doing nothing. It is important that every country, every business decide upon its own practices. Why should a Canadian business behave itself differently in China than it does in Canada? This is a decision that each and everyone of us must make, is it not? Perhaps Canada will not save the world by acting as a Boy Scout however

[English]

we still have choices we can make by ourselves.

[Translation]

The Chairman: Yes, all right. However, when the Americans tell American companies that they do not have the right to do business in Cuba, even by going through a Canadian subsidy of an American company, we see no problems in adopting legislation containing criminal sanctions against this type of conduct. Why, when the Chinese tell us that we have exported all of our attitudes to their country, should they accept what we do not accept ourselves when the Americans tell us that we do not have the right to do business any differently from them, in a matter that does not reflect the way they view international law?

I believe that this may happen, but first we need some consensus amongst nations that such and such a type of conduct, such as apartheid or something along that line, is not acceptable. The problem I see, for instance, is the one that we had in Singapore. The problem concerned working conditions and we didn't even have a minimum level of consensus. That is where the problem lies. It is difficult to obtain even a modicum of consensus.

If, in Canada, Canadian companies were required to conduct themselves in a specific fashion elsewhere, Canadian investors would use other means, such as buying stocks on the New York Stock Exchange in order to invest in an American company so that they can do what they want. Consequently, you're going to cause Canadian capital to leave the country in a roundabout fashion. If we don't have a multilateral solution, we create a dangerous illusion for the public. This is my opinion.

I apologize. I don't want to give you the impression that I'm criticizing your position; however, this is something that we're trying to define here, in this committee, and this is something of great importance to us.

Mr. Culpeper: Do you not think that some leadership remains to be shown? It would be a great tragedy if everyone waited for a consensus on every point. Perhaps it would be worthwhile if countries such as Canada or if a people, such as Canadians; demonstrated leadership to the world.

The Chairman: Ms Debien.

Ms Debien: Mr. Chairman, I will first of like try to console you.

The Chairman: Thank goodness.

Ms Debien: You know, if Canada had not played a key role with its peacekeepers andMr. Pearson's position on peacekeeping, Mr. Pearson would have not been given the Nobel Prize and Canada would not have earned the reputation that it carved out for itself in peacekeeping. The same thing can be said about development assistance. Canada had an enviable international reputation because of the leadership role it played in these two fields as well as in human rights.

Already we can take pride in the unilateral action that Canada can undertake in certain fields and that it must continue to pursue apart from multilateral forums. I agree somewhat with what Mr. Culpeper was saying: We can never reach a consensus in multilateral forums and this must not prevent Canada from going ahead if it wants to maintain its international image in the sectors where it excels and where it has expertise.

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This is the way I see it. However, if Canada wants to blend in with the rest of the other countries of the world, never distinguish itself as a country with a long tradition and a great deal of expertise in very specific areas, it is free to do so. But the world will no longer talk about Canada, should that happen.

That is your consolation prize.

The Chairman: If I understood correctly, this is a point of order.

Ms Debien: Mr. Culpeper, at the very start of your presentation, you said that in the future, it will primarily be the private sector and not the official development assistance that will be investing heavily in developing countries.

As regards ODA, you draw a parallel between altruistic and business motivations, an issue which was discussed at great length in Mr. Strong's report. This report stated that this altruism must be set aside. I do not fully agree with his opinion which I have not had an opportunity to discuss with him.

You also referred to the various motivations of the private sector, which are based primarily on interest and business, although it is also striving for a certain degree of social fairness, explaining the emphasis you also put on the whole social issue, which is so important.

According to your experience, your contacts, your work and your knowledge of private sector investments, do you see a true desire to take social motivations into consideration or to seek social fairness at the same time as profits, or is this an illusion, a dream? Based on your experience and your studies in this field, do you have the impression that there is a genuine effort to do this or are we just talking vacuously?

Mr. Culpeper: Thank you. Our work is based partly on a dream and partly on an analysis of the reality. It's important to bear both points of view in mind.

Ms Debien: Yes.

Mr. Culpeper: In answer to your question? I am struck by the profound changes occurring in the private sector today. Earlier, I quoted some comments made by Mr. d'Aquino at a conference held last year, also attended by Mr. Broadbent. Who could have foreseen, five years ago, that such a conference would take place with participants such as Mr. d'Aquino and Mr. Broadbent?

I am struck by the fact that business people, such as Mr. d'Aquino and Mr. Mark Drake, which whom I've also discussed the same subject... show a great deal of interest in these questions and I suspect that this interest is partly owing to the image that private companies want to project, an image which is very dear to them. Some consumers have very set ideas about the way that private companies should conduct themselves either at home or abroad.

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When Shell supported the Nigerian Government, I would suspect that this company lost part of its market share and suffered some losses. We can therefore imagine situations where social concerns and concrete interests may converge rather than diverge.

We are working with members from the business world and you must perhaps wait for our next report. We are in the process of organizing a conference with the private sector to which we are inviting individuals from this sector who are interested in these issues.

Ms Debien: Thank you.

The Chairman: Thank you.

Mr. Dupuy.

Mr. Dupuy: Mr. Chairman, I would like to go back to an issue you discussed a little earlier, namely, using multilateral organizations to put pressure on certain countries whose conduct is deemed to be reprehensible by intervening in their economic and social development.

I am bringing this matter up because I would like to make reference to a very concrete case that I have been dealing with over the past few months. I have tried to travel to Delhi, in India, on several occasions because I am preparing an overview of the child labour problem in India.

Several different approaches are possible. This aptly illustrates what we were discussing earlier. We can try to establish some international pressure mechanisms to force India to improve its conduct. We could to this by means of an agreement, through the International Labour Organization or the World Trade Organization, by imposing a type of code of ethics pertaining to working conditions.

This would create the difficulties referred to by our chairman, but, in addition, there is the fact that most of this child labour that everyone finds deplorable does not take place in the export industry. Consequently, you will have very little impact on the problem. It is possible to establish some type of consensus with specific industries, with importers. This is what Rugmark has done in the carpet industry. Rather than take punitive action, Rugmark took incentive measures to facilitate sales. Carpets carrying the Rugmark label will sell better than the others. That is a measure that we could possibly take.

There is another quite different approach and I will tell you right now that this is the one I recommended. I would like to know whether or not you agree with me.

When you look at India's constitution, when you study the decisions that have been handed down by its courts, including the Supreme Court of India, when you examine the policies that have been issued and prepared by the Indian Government - not only by the central government but also by certain states - , it becomes clear that the legal structure and the policies forbid this type of labour. Consequently, the real problem does not stem from the structure, from policies, from objective or intent. The problem lies in the enforcement. When you have to enforce legislation or regulations in a country with a population of 950 million inhabitants, you cannot do it overnight. My recommendation is, therefore, that it would be wiser to help the Indian Government implement its own policies.

The attitude, therefore, is not at all punitive. On the contrary, it is characterized by a desire to assist with the development and to facilitate.

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This is why I am somewhat surprised at your suggestion that we organize international pressure, either through directives that would probably be extraterritorial and therefore accepted with difficultly, or through pressure on our own businesses, that may jeopardize their business positions.

Do you not think - this is my question - that our approach is more enlightened and more constructive than the one that you appear to be advocating?

Mr. Culpeper: I do not think that the measures you are suggesting contradict what I'm suggesting. I think that it is possible to take action both internationally and nationally. As you pointed out, it is important to remember that you will probably have an impact on only a marginal portion of the activities. However, this is not always the case. We may have greater impact in other countries.

One cannot marginalize trade as such. It is important that we take action on several fronts. We can help the Government of India but, in my opinion, this does not exclude imposing a code of ethics on private companies because all private companies must abide in accordance with a code. What really counts is:

[English]

what are the rules of the game? No business really works in a vacuum. Every business has an implicit code of conduct. The question is what the standards should be. Should they permit a race to the bottom, or should they be standards that are defensible at home and abroad? That doesn't necessarily mean the standards abroad should be the same as the standards at home, but surely that doesn't mean they should be the worst possible or worst imaginable. So I do think it's possible to act on both fronts.

Mr. Dupuy: Are you referring to voluntary codes, or to codes imposed by the government or the international community?

Mr. Culpeper: This is where it's difficult to say which is better. I've always believed that voluntary codes may be a bit of a smokescreen; therefore, codes that really work and are enforced are preferable to codes that may or may not be enforced. The question is, which codes make the most sense, whether they're voluntary or not?

I'm a little skeptical that one can leave everything to the volition of the private sector. If the private sector takes an initiative, however, then one shouldn't scoff at it necessarily and say it's not sufficient. I think one should encourage that to happen and then try to formalize these in some way at the intergovernmental level as well.

The Chairman: If I can just interrupt here, when I taught public international trade law we had a section on voluntary codes of corporations - there was one about Caterpillar and various others - and I agree with you, Mr. Culpeper, that over time it becomes a law-making process because they contribute by being encouraged to have the right codes. In the end, that then contributes to the formation of international rules and you get a body of law that at least evolves out of that.

From what I have said, please don't take me to be saying that I'm giving up completely. I agree that we have to keep pushing on all these levels, and that's a very interesting idea. There are so many countries that we know of, that we see all the time, in which there is a domestic regime of inapplication. When I think back to the Soviet Union, the human rights constitution of the Soviet Union was one of the greatest in the world, but there were a lot of folks in jail who didn't know that. So that's where this good governance idea that we have to have seems so important.

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Mr. Culpeper: If I might just also come back on the ILO, the International Labour Organisation is a much-maligned body, but one of its great weaknesses is its ability to monitor and enforce. I think you really do need to have the international machinery, but that in turn needs the backing of the international community. Unfortunately, for several reasons, the ILO just has not had that backing. Surely it should be one of the central agencies to act in these spheres.

Mr. Dupuy: Let me put the question, finally, in a very blunt way.

The foreign aid program of the United States has to be financed through the congressional process, of course. It is possible for any congressman to attach a rider to the foreign aid program. Would you be in favour of a congressman attaching a rider that would deny support to India unless child labour was eliminated? That kind of issue is a very sharp, clear-cut one. How would you react to that?

Mr. Culpeper: I think dialogue is always much better than brinkmanship, and one can't justify these kinds of tactics. In any case, as you've pointed out, India already has the legislation in place. They've signed on to the covenants of the ILO, but it's a question of enforcing them.

If we really are interested in improving labour conditions and in eliminating horrible child labour, then we have to work at both ends. UNICEF has done a lot of interesting work in this regard in terms of looking at the situations of child poverty; in trying to understand the family relationships that would be thrown out of kilter if children actually were to lose their jobs; in examining the fact that there quite often isn't sufficient schooling available. It's fine to throw kids out of work and to see them lose a pittance of income for that family perhaps, but the fact of the matter is that it doesn't necessarily guarantee that those children will end up going to school and getting well educated. So I think it's really quite important to work on all aspects of the problem.

[Translation]

Mr. Dupuy: I am sure that Ms Debien will be happy to learn that Canada is cofinancing, with UNICEF, this support for children and, in doing so, is demonstrating some very noticeable leadership which is very appreciated elsewhere.

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The Chairman: Mr. Flis, we're -

Mr. Flis: We don't have time to ask any further questions, so I might just leave a suggestion for future reports.

When I get a report like this from a multinational company, I send it back without reading it. The question I ask is how many trees it cost to publish the report. I make the same comment to your institution, because I know you thank the donors who funded the publication.

Many of your donors are Canadian taxpayers, however, so my question on behalf of the taxpayers is this. Do we need this kind of glossy format? I can't read it because, when I try to do so, the light is reflecting off it and is hitting my eyes. I compare it to the previous report we were given. I also recommend that any future such reports should be on recycled paper whenever possible.

Thank you.

Mr. Culpeper: I might say that this is one of the most frequent criticisms we've had of our report. Your point is well taken, and I think you will notice in next year's edition a far less glossy production on recycled paper stock. But the print run, by the way, wasn't so large that we would have made a dent on the number of trees wiped out by The Toronto Star or even The Globe and Mail.

The Chairman: Well, there's a part of clear-cutting that we'll hold to the fire.

Mr. Culpeper: I've just been informed by Melanie about something that I should have been reminded of. This is recycled paper stock to begin with.

Mr. Flis: It should have the logo on it.

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The Chairman: Mr. Culpeper, I'd like to thank you and your colleagues for coming.

Apart from Mr. Flis's comment about the presentation of the report, I'd like to commend you on its content. I can't honestly say I have read it thoroughly, but there are a couple of things I appreciate about it.

I think the idea of identifying the authors of the chapters is good, because many of the people - Mr. Sanger and others - are faces known to members of the committee. I think this is helpful for us. And we now know Ms Gruer and Dr. van Rooy, as well, so we will read their chapters with that in mind.

I think the idea of having a chapter on the media and how it's functioning is very helpful to us.

Finally, I despair about having any statistical understanding of what's happening in the world, and I think your statistical chapter is very helpful. To be able to pull up a country, as I can if I just quickly look, and see Canada's principal imports from Vietnam - just to pick a country as an example - are coffee, shrimp, and footwear, as you put in there, and that from Thailand, for example, they're tuna and microchips, that is very helpful to us.

It is a very interesting presentation. It's extremely detailed, and I'd like to congratulate you on the content of the report. I'm sure that as it gets refined, it will make a real contribution to our understanding of these issues in Canada.

I close with that note, but since I'm complimenting you, maybe I could do a little puffery for you. Mr. Schmitz has given me a copy of an invitation to a conference that you have coming up on states, markets, and development on March 4. I don't know whether or not you wanted to suggest that it might be open to them if members of this committee were interested in attending that conference.

Mr. Culpeper: Sure. The conference is an early.... How shall I say this? The World Development Report, which is the flagship of the World Bank, is being presented by the team that produced it. It's on the role of the state, and we're spending a day discussing it here in Ottawa. It's at the Sheraton Hotel. If any members of the committee - or their staff, for that matter - are interested in attending, please let me know and we will send you an invitation.

The Chairman: Thank you once again for coming, sir. We appreciated your presentation very much, and good luck with next year's report.

We're adjourned until Tuesday at 9:30 a.m.

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