Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue 11 - Evidence - Meeting of March 4, 2008
OTTAWA, Tuesday, March 11, 2008
The Standing Senate Committee on Foreign Affairs and International Trade met this day at 5:34 p.m. to continue its examination of Bill C-293, An Act respecting the provision of official development assistance abroad.
Senator Consiglio Di Nino (Chairman) in the chair.
[Translation]
The Chair: I welcome everyone to this meeting of the Standing Senate Committee on Foreign Affairs and International Trade. We are continuing today the examination of Bill C-293, An Act respecting the provision of official development assistance abroad.
The purpose of this legislation is to make poverty reduction the objective of Canada's Official Development Assistance in order to insure that this aid would be part of our country's international commitments in the area of human rights and take into account the views of people living in poverty.
We are pleased to welcome today Mr. Paul Jenkins, Senior Advisor to the Executive Director for Canada, Ireland, and the Caribbean at the International Monetary Fund.
Mr. Jenkins, welcome to the Senate of Canada.
[English]
I understand that you have some opening remarks, after which we will ask questions. I have another engagement in approximately an hour, and Senator Corbin has kindly agreed to chair this meeting after that.
Paul Jenkins, Senior Advisor to the Executive Director for Canada, Ireland and the Caribbean, International Monetary Fund: Thank you for the invitation to appear today in connection with Bill C-293. I would like to begin by expressing, on behalf of the Executive Director, Jonathan Fried, his regret for not being able to appear before you today. It was necessary for Mr. Fried to remain in Washington to participate in a crucial meeting of the International Monetary Fund Executive Board, at which changes to the structure of IMF quotas and voting power are being considered. This meeting today is the culmination of three years of efforts to reform key elements of the IMF's governance arrangements. Canada has played a leading role. I am sure you understand that it was important for him to participate in those discussions.
I will briefly give you some background on who I am. I am the senior adviser to the executive director. I am a Canadian. I have occupied positions at the Department of Finance, where I headed the unit responsible for Canada's membership in the IMF. I was in the branch currently headed by Mr. Graham Flack, who I believe also appeared before this committee some time ago. I have been in Washington for three and a half years in the executive director's office.
My remarks today will focus on clause 5(1)(d) of the bill, which would require a ``summary of any representation made by Canadian representatives with respect to priorities and policies of the Bretton Woods Institutions.''
I would like to begin by providing background on how Canada is represented at the IMF which, I think, is germane to this clause. The most important thing to emphasize is the arm's-length manner in which Canada is represented at the IMF. This arm's-length relationship has two aspects.
First, executive directors and their staffs are officers of the IMF with fiduciary responsibilities to the institution. An executive director's primary legal duty is to act on behalf of the broad interests of the institution. This is a key element of good corporate governance practice for boards of directors in the public and private sectors.
Directors approve the policies of the institution through the collective decision-making practices of the executive board. Their status as officers of the IMF also means that each individual director is bound by these policies in much the same way that a member of the regular staff of the IMF would be once policies are approved.
In this respect, we would note that from the earliest days of the IMF, the formal policy of the executive board has been that its meetings are confidential to preserve the conditions for frank debate. This is the basis for the requirement in the code of conduct that members of the executive board protect the confidentiality of documents as they are classified under the policies approved by the board.
The second arm's-length aspect is the arrangement whereby directors represent a group of countries. The IMF is a universal international institution with 185 members. Given the sheer size of its membership, it is not practical that all members be represented directly on the executive board. Rather, members group themselves into constituencies, apart from the five largest members who are entitled to appoint directly an executive director.
Canada's constituency includes Ireland and the Commonwealth Caribbean, for a total of 12 countries. The executive director, although always a Canadian national, has a duty to represent the entire constituency including his or her Irish and Caribbean authorities on the same basis that he or she represents Canada.
I can give an illustration of the degree to which an executive director represents his or her constituency on this unified basis. On those occasions when formal votes are held, which are relatively rare, a director is required under the IMF's articles of agreement to cast a single vote on behalf of the entire constituency. Splitting of votes is not permitted.
As a result of this arm's-length relationship, I can see two legal or policy difficulties with the requirement in the bill to prepare a summary of all representations by the Canadian representative on the priorities and policies of the IMF.
The first difficulty arises because the executive board has established policies governing disclosure of information by the IMF as an institution. This includes the deliberations of the executive board itself. These policies were established early in the history of the IMF and take as their starting point the need to preserve the conditions for a frank discussion and to protect discussions of sensitive economic and financial information and conditions in member countries.
At the same time, the board has taken steps, especially over the last 15 years, to move in the direction of greater transparency. At present, the work program of the executive board has been published covering the forthcoming six- to nine-month period. This is a detailed, annotated document that gives a flavour of the policy discussions forthcoming. That is published together with the agendas of each individual board meeting several days before it is held. Between 75 per cent and 90 per cent of staff papers submitted to the board for consideration are eventually published. In some cases, this may be in redacted form to protect market-sensitive information. In the majority of cases, a chairman's summary of the board's discussion is also published. These summaries provide detail about the main thrust of the discussion, as well as a sense of the weight of the opinion behind various strands of the argument. I would add that Canada has been among the foremost proponents of greater transparency at the fund over the last 15 years or so.
However, the formal representations by individual directors during board meetings have never been published. These views are kept confidential under the executive board's policies, reflecting the original objective of preserving frank discussion and avoiding disclosure of political or market-sensitive information about members' economic or financial situations.
The positions of individual directors are also kept confidential for another reason: the principle that the executive board reaches its decisions by consensus. I mentioned earlier that formal votes are rare, and that is a reflection of this policy. There is a discussion, and a consensus typically emerges out of the exchange of views. Once a decision is made, however vigorous the exchange of views leading up to it, it is considered to have the support of all members of the board.
Thus, broadly speaking, the constraints on the ability of an individual executive director to divulge details of his or her position are not dissimilar qualitatively to those that limit the abilities of a national cabinet in many systems to discuss its deliberations.
From a legal perspective, the IMF's code of conduct, which executive directors and their staffs must observe, requires them to protect the confidentiality of the deliberations of the executive board. Information concerning the workings of the executive board can be disclosed only in accordance with policies that the board has established.
What does this mean in practice? Clearly, an executive director can speak in general terms about his priorities for the IMF, including by providing a flavour of his or her views on particular policy issues. He or she may also speak in general terms about the views of his authorities, with their consent. In fact, we do this by supplying information on these policy orientations to the Department of Finance Canada, and the department incorporates that information into its annual report to Parliament entitled Report on Operations Under the Bretton Woods and Related Agreements Act.
What we cannot divulge under the code of conduct are the actual representations we make in board meetings, as this in many cases would contain confidential information and is inconsistent with the need to create the conditions for a frank and open discussion. The language of the bill is thus troubling, since it could require us to take actions that are inconsistent with our responsibilities as officers of the IMF and could place us in violation of the board's code of conduct.
The second difficulty the bill might pose relates to the fact that we represent a constituency of countries. In the normal course of events, we do not make one representation at the board on behalf of Canada, and then change hats and make another on behalf of Ireland, and so on. Rather, we strive to craft a single representation that speaks on behalf of the entire 12-member constituency. Crafting such a single position is often delicate, and the result is not a representation by a Canadian representative. Rather, it is a single representation by a director representing Canada, Ireland and the Caribbean.
There are also cases where the authorities of a member country have asked us to specifically note their position in the course of our representation to the board. In such cases, those positions could be divulged only with the consent of the authorities of that member.
The final point that I would make moves from legal and policy challenges more to the practical challenges of implementing the requirement in clause 5(1)(d).
The IMF executive board can be thought of as being in almost permanent session. During a typical year, it will consider, in either formal or informal session, about 120 matters that the IMF classifies as policy issues. It will also consider another 200 country matters, ranging from the annual reports that are required each year from each member on economic conditions and policies to discussions relating to debt relief and IMF financial programs in specific countries. These country discussions are often, in practice, the means by which policies are established or revised. This raises for us a practical question about the compliance burden associated with the bill, since it could be interpreted as requiring the preparation of up to 200 or 300 summaries each year.
For all of these reasons, the approach that we have followed is to collaborate with the Department of Finance in preparing the annual Report on Operations Under the Bretton Woods and Related Agreements Act. This report, which has been expanded and improved over the last few years, goes into a fair bit of detail on Canada's objectives for the key policy issues facing the IMF and provides a flavour of how the executive director is advancing Canada's interests, subject to the constraints that I have described over the last few minutes. I would submit that this approach provides the means for achieving the transparency in Canada's activities at the IMF that is the objective of the bill.
Thank you very much. I welcome your questions.
Senator Corbin: On my personal behalf, I wish to thank the witness for a clear, to-the-point, succinct and precise presentation. We know where you stand with respect to the demands of the bill.
Would you recommend that the clause you discussed be stricken off the bill completely, or is there room for accommodation?
Mr. Jenkins: Senator, I am reluctant to make recommendations on the specific drafting of the bill. I have to confess that it is difficult for me to see how the content of section 5(1)(d) could be slightly rewritten in a way that would eliminate the concerns I have mentioned.
There is the issue surrounding the reference to Canadian representatives, which is problematic because of our status as officers of the IMF and because we represent, on an equal basis, 12 countries. Then there is the reference to the summary of representations.
A point that I did not make in my remarks has to do with the generality of the reference to policies and priorities. That would be operationally difficult for us to interpret, given that the board is in pretty much continuous session and considers a large number of issues each day. In some cases, it is clear-cut that a discussion is a policy issue. In other cases, a policy issue flows out of a country discussion. It would be operationally difficult for us to interpret that aspect of the requirement.
That leads me to reiterate some unease with the language. I think I have to leave it at that. I would not want to make any further specific comments about how the reference could be rewritten in a way to make it clearer.
Senator Corbin: Does the IMF have a website?
Mr. Jenkins: Yes, it does.
Senator Corbin: I am not sure whether it is the World Bank's or the IMF's website that I have visited on occasion, but there are briefings following meetings where journalists can ask any number of questions they wish. Does that still go on?
Mr. Jenkins: The IMF website is quite extensive. In fact, I think its extensiveness is its own worst enemy, in that there is so much information there, it is sometimes difficult to locate.
There are webcasts in which members of the fund staff brief journalists. Also, as I mentioned, a great deal of documentary information, including documentary information relating to the workings of the executive board, is posted on that website — sometimes not immediately, but in the days, weeks and months following a board meeting. That includes, as I mentioned, a large majority of the staff papers that are submitted to the board for the board's consideration and that provide the basis for the board's discussion. They are posted sometimes with corrections for market-sensitive information, but the majority of those are published.
Also, there is a chairman's summary of the discussions. These chairman summaries are often fairly detailed, but they do not indicate the positions of individual directors. They will say, ``Many directors believed the following, although a few directors took an opposing view,'' and they will go into some detail about the substance of the issue. The one thing they never do is divulge the opinions of individual executive directors.
Senator Corbin: I thank the witness and will leave it at that for now.
Senator Segal: Let me agree with my colleague, Senator Corbin, and express my appreciation for the frankness and clarity of your presentation.
My first question relates to what the drafters had in mind, constructively, in making this proposal. Clearly, the elephant in the room is the view that is shared by many in the international development business and many of the NGOs that, despite all their efforts and despite the efforts of CIDA and all the others, something goes on at the IMF under the rules of confidentiality that has the effect of deeply frustrating or adding to debt loads or imposing other constraints upon target countries in a way that frustrates what the aid organizations are trying to do. I am not suggesting that they are right; I am suggesting that that is a clear thematic of what their concern has been. I would be appreciative if you could reflect on that for a moment.
Second, it strikes me that the way in which the provision you referred to on confidentiality and disclosure is interpreted would determine whether or not it violates the confidentiality provisions of the IMF. In effect, if the Senate, in its wisdom, wanted to include for clarity an indication that this provision would not operate, notwithstanding the confidentiality agreement to which Canada and other members of the IMF are party, one might be able to achieve some measure of progress without violating the premise. I am not asking you to do drafting on the run, but I am raising the prospect as one of the ideas that may end up being discussed.
Finally, what would you do, what would our representative do, if the bill as we now see it is passed and proclaimed? From your perspective, accepting the context that we would be in some difficulty with respect to our participation at the IMF, what would actually happen if a bill with the wording as it now exists, unmodified and not clarified, were passed and became the law of the land? What would you do? What advice would you give, and how would you take the government's agenda forward?
Mr. Jenkins: Regarding the first question, there clearly is some frustration on the part of some members of the non- governmental international community primarily with what they perceive as the lack of transparency of the decision- making bodies of the IMF and the World Bank. As I mentioned, there have been many efforts over the last 15 years to address that lack of transparency. Fifteen years ago, almost nothing was in the public domain about how those institutions operated. Now the institutions operate under a presumption of disclosure, and that has led to the vast majority, between 75 per cent and 90 per cent, of the staff documents that are being discussed being put into the public domain.
It has also led to the publication of the chairman's summaries that I mentioned. If the genuine interest is in understanding what the decision was and why it was taken grosso modo by the board as a collective entity, I think those summaries provide a great deal of detail about that decision-making process.
I can only imagine that some of those who are frustrated with the lack of transparency somehow think that there is a hidden decision-making process, that what is in the public domain is the tip of an iceberg and that there is a lot of other information not in the public domain. That just is not the case, but it is very difficult to prove a negative.
We have been clear with the NGOs that come to see us, and we do have a very open policy about talking to NGOs from countries in our constituency, Canada and Ireland principally. We speak to them semi-formally twice a year before the spring and the fall meetings of the IMF, and we invite them to contact us whenever they feel like it in order to have follow-up questions. They occasionally do that, although not terribly frequently.
I am at a bit of a loss to understand the continuing frustration in the non-governmental international community with this issue. My personal view is that there are many serious issues to be worried about, and this is not a first-order problem. I recognize that that may sound self-serving.
The linguistic change you referred to, the possibility of clarifying the legislation so as to juxtapose it with the confidentiality requirements of the institution, would be modestly helpful in terms of clarifying our obligations. There is a risk that that could create a null set in that there may be no information that we could put in such a summary beyond the most banal information that would be consistent with our obligations under the code of conduct, and we would have to explore that issue carefully with the staff of the IMF.
That, naturally, relates to your third question of what we would do. I have given that a great deal of thought over the last couple of weeks and discussed it with Mr. Fried and also, of course, with people at the Department of Finance.
To clarify, I will give a bit more detail about how we make representations at the IMF. The primary means by which we make representations is in formal written documents. Before the vast majority of board meetings, we prepare a written submission that is circulated via the secretary to the executive board and to all of the other chairs at the board. That document then becomes the jumping-off point for the board discussion and, in many cases, largely the end of the board discussion: depending on the issue, there may in a board meeting be a few questions of clarification, and there may be an active debate; but many board meetings consist of a member of the staff or IMF management responding to the questions that have collectively been posed to management in these written documents, which are called greys. Historically, they were written on grey paper.
These documents, although they express our views, the views of executive directors, are documents of the IMF, and they are clearly marked ``Document of the International Monetary Fund'' and ``For Official Use Only.'' In preparing for this testimony, I consulted closely with the office of the general counsel of the IMF and the office of the secretary to the executive board, and they were clear that the policy of the fund protects those documents as confidential documents of the institution. As officers of the institution, we do not have the liberty to disclose those.
The other aspect of this I would refer to is that there would be difficulty for us, but there would also potentially be a difficulty for Canada, because the Articles of Agreement of the International Monetary Fund, which is a treaty obligation of Canada, protect the inviolability of the fund's archives. The general counsel has explained that that basically means that the fund cannot be required to divulge information that in its own internal policies it has not decided to divulge. The articles of agreement, in addition to being a treaty obligation for Canada, are translated into Canadian domestic law through enabling legislation, in particular the Bretton Woods and Related Agreements Act.
The most polar case, where Bill C-293 was enacted into law as it stands and was interpreted as requiring us to divulge the full text of these written representations, would create a situation whereby there was a conflict in internal Canadian law and a potential violation of treaty obligations, because the articles of agreement have been signed by Canada and have the status of an international treaty. That is the most clear-cut case.
Could we provide a summary of those greys or summarize additional comments we might make in a board meeting? As I said, the executive director is free to speak in general terms about his priorities for the IMF. At that level, that would not pose any difficulties. The problem would emerge because these written representations are the primary legal mechanism by which we participate in the governance of the IMF, and they are unambiguously confidential. At what point would a summary of a confidential document become confidential? That is an issue on which we would need to consult closely with the general counsel's office.
I worry that almost on a case-by-case basis we would need to vet those summaries with someone within the institution. There are a couple of things in particular we would need to avoid. We would need to avoid any reference in the summary to the position of another executive director. Of course, these written statements are very interactive. Everyone circulates these at the same time. In writing your own, you tend to react to what other people have said. You say, ``I agree with Mr. X on point Y; I disagree with Ms. Y on another point.'' We would need to excise such references. Second, we would need to excise references to statements of the management or staff of the fund. Third, we would need to be very careful about information released because these discussions are usually based on a staff paper. The staff paper, often in the fullness of time, goes into the public domain, but it may not be in the public domain at the time or within a short period after the board discussion. One would need to carefully make sure that in releasing a position paper one was not divulging information not yet circulated to the public.
Those would be the primary what-would-we-do challenges.
The Chair: Senator Segal, does that satisfy you?
Senator Segal: Yes, thank you very much.
The Chair: Mr. Jenkins, in your presentation you specifically mentioned clause 5(1)(d). Do other areas in clauses 5(2) and 5(3)(a) and (b) give you concern as well, or are you restricting your concerns to that one clause you referred to in your presentation? Clause 5(3) talks about augmenting the available report by reporting
(a) the position taken by Canada on any resolution that is adopted by the Board of Governors of the Bretton Woods Institutions; and
(b) a summary of the manner in which Canada's activities under the Bretton Woods and Related Agreements Act have contributed to carrying out the purpose of this Act.
Do you also have concerns in those areas, or can you live with those?
Mr. Jenkins: Certainly clause 5(3)(b) would not present any difficulties from the perspective of the executive director's office. I would submit it is redundant vis-à-vis the existing report on operations under the Bretton Woods and Related Agreements Act. At least as I interpret it, it does not impose any additional obligations; it is not problematic in its own terms.
Section 5(3)(a) came up in some of our discussions with the office of the general counsel of the fund. We asked for his opinion on the entirety of the bill. I did not focus on this because I think it may be legally correct but is somewhat of a pedantic point. He made the point that when the Minister of Finance, who is Canada's governor for purposes of the IMF — Canada's representative on the board of governors — votes on a resolution, he is, from a legal perspective — again the board of governors is a board — not acting as a Canadian official; he is acting in his capacity as a governor of the fund.
I am sure that is legally true. I think operationally it is probably not terribly significant, and certainly the board of governors in the normal course of events does not operate under the same presumption of confidentiality that the executive board does. The board of governors meets only once a year in the fall at the time of the annual meetings. It frequently votes by mail on particular resolutions. Our position on resolutions is not confidential, so my concern about that is almost a pedantic one, about associating the Minister of Finance as someone who votes Canada's position.
Senator Smith: Thank you for coming, Mr. Jenkins, and for providing us with a lot of background and insight into this issue. I will pursue it a little further. By way of background, I would emphasize that the words in clause 5(1)(d) are ``a summary of any representation.'' At one point I think you used the word ``verbatim.'' Nothing here talks about a verbatim, every-word disclosure. The word that is used is ``summary.'' That is at a very basic level.
Assuming that Canadian parliamentarians want to move towards more transparency, maybe it is an incremental thing. When you are responsible for tax dollars, it is understandable that you want to move toward more transparency. Other countries have dealt with this, and I have a little background here. I want to review what four other countries do.
It is my understanding that in Britain, the Treasury annually sets out the approach to IMF issues over the previous year and the Department for International Development reports on key policies as well as on government objectives for the World Bank. In France, the government issues an annual report on the government's positions on a selection of policy areas. In Sweden, the government presents a report to Parliament on Swedish priorities at the World Bank and the IMF. In Italy, an annual report provides information on positions taken by Italian representatives on issues.
Given that the word used in clause 5(1)(d) is ``summary,'' which is in general terms, as opposed to a verbatim, every- single-word text, would Canada be mandated by this act to do something that is dramatically different from what the British, French, Swedish and Italian governments are doing? Is it a dramatic new step, or does it not seem compatible, consistent and similar, maybe not identical, to the approach of these other four reputable countries?
Mr. Jenkins: For the first three countries that you mentioned, the U.K., France, and Sweden, the requirements as you described them did not strike me as in any way problematic from the standpoint of our office, mainly because they seem to be similar to what Canada already does in the Report on Operations Under the Bretton Woods and Related Agreements Act. If I interpreted those legislative requirements correctly, they would not present any difficulties because they would not represent an expansion beyond what is already disclosed, which is, ex ante, an expression of priorities for an institution and, ex post, some flavour of how the institutions were doing and how the representation of Canada at those institutions was conveying those positions.
The Italian requirement struck me as subtly different in that it referred to an annual report on positions taken by the executive director by Italian representatives. It strikes me as problematic potentially for the same reason. Positions and representations seem, in my mind, very similar.
Senator Smith: One further point: I will quote from the World Bank Disclosure Policy: Additional Issues, page 14, paragraph 29:
While the Executive Directors' statements are not normally disclosed . . . governments of member countries are free to release statements of their positions on matters considered by the Board. However, such public statements should not contain information that is confidential and nondisclosable, or has not been disclosed yet in accordance with the Bank's disclosure policy.
Let me repeat the line I wish to highlight:
. . . governments of member countries are free to release statements of their positions on matters considered by the Board.
Do you not think the wording of clause 5(1)(d), where the word ``summary'' is used, is not quite compatible or simpatico with that policy as articulated in the bank's own document?
Mr. Jenkins: The World Bank clearly has a somewhat different legal framework than the IMF in a number of ways. I understand only some of the ways in which it differs.
One observation I would make that is common to both the IMF and the World Bank and is germane to this point is that the reference you just read dealt with member countries' positions on issues and essentially said if Canada has a position on an issue that it knows is coming to the board, the Minister of Finance could express a view on that or could state his position. Indeed, if our Canadian authorities at the Ministry of Finance or the Bank of Canada were to send us advice, they could publish that advice. They own their own views, and that is natural.
That freedom is tempered by the fact that publishing those views relates to what I said in my opening statement about a director being free to express his views. Authorities are free to express their views going to the executive board. They cannot, in so doing, disclose information that is owned by the fund that is not already in the public domain. That line, in practice, could be a difficult one.
For example, there is a policy paper that will be discussed by the board that lays out a proposal. Perhaps in six months that proposal will be released, or perhaps in a month it will be released. At the time of the board meeting, it has not been released. The Department of Finance prepares a memorandum that summarizes their position and then puts that in the public domain. That position paper will naturally talk about the staff proposal, which is not in the public domain. In fact, the whole purpose of sending it to us, presumably, would be to give us guidance on how to react. That is the kind of operational difficulty I foresee.
Senator Smith: Let us leave the Italian government out of this. You referred to the U.K., French and Swedish governments. Have there ever been any problems along this line with them? I would suggest that what we are talking about here is of that nature.
Mr. Jenkins: I am not aware of any difficulties vis-à-vis the British, the French or the Swedish, although I would suggest that their practices and requirements as you described them are similar to what is already done in Canada. I interpret it as being different from what is in clause 5(1)(d), which relates to specific board meetings and specific representations.
When you introduced your question a moment ago, you did draw the distinction between the representation and a summary of the representation. That is an area of some greyness, in that the operational question for us, as I alluded to in answering Senator Segal's question, would be at what point a summary of a confidential document becomes confidential.
Senator Mahovlich: In this bill, the focus is on poverty reduction. Could you give us your interpretation of poverty reduction?
How would the geographical distribution of Canada's official development assistance throughout the world change if this bill passes?
Mr. Jenkins: Senator, I am not an expert on poverty reduction. I know rather little about the distribution of Canada's international assistance and foreign aid.
I would note that the International Monetary Fund is not a development agency. It is an international monetary agency. It does have the Poverty Reduction and Growth Facility, which was established, long after the IMF was created, as a mechanism for providing concessional lending to very poor countries. However, it is very much a tertiary part of the fund's activities.
I do not feel competent to answer your question, but a representative from CIDA or from within the government or other experts could do justice to it.
The Chair: For clarification, Mr. Jenkins did tell us at the beginning that his presence here would be to deal with that area of confidentiality, particularly clause 5(1)(d), so I thank him for his honestly about that.
Senator Grafstein: I apologize to the witness. Senator Di Nino and I are hosting the President of the Organization for Security and Co-operation in Europe, OSCE, the largest human rights parliamentary association in the world. I delayed because Senator Di Nino and I were engaged in that. I was not able to hear all of your testimony, but I have read your statement.
I am curious about this diplomatic reluctance to give us information about a major policy in Canada. Senator Smith touched on one of my points, which is that it seems there is a greater willingness or liberty to opine on matters for other countries. This committee is seeking the best statutory model for the distribution of a tremendous amount of Canadian wealth.
Let me give you my recent experience. Your former managing director, Rodrigo de Rato y Figaredo, gave up his office in September of last year. His successor is Dominique Strauss-Kahn, former French Minister of Finance. Is that correct?
Mr. Jenkins: Yes.
Senator Grafstein: I would like to talk about Mr. de Rato. This is a question of transparency, information and opinion. To my understanding, without any request from us, he came to Canada recently to address two major issues that the Standing Senate Committee on Banking, Trade and Commerce was considering. I chair that committee, and Senator Eyton is a member.
We were studying the question of productivity in Canada compared to the United States and other countries. He came and made a fulsome statement indicating that for a number of reasons Canada has to be more productive and he outlined why that was the case.
I am perplexed that he would come unilaterally to talk about a policy issue that affects Canada. Maybe he had consulted with the Canadian members on his board. Yet, in this instance, there is hesitancy to be more candid or to give us opinions.
I will give another example that is even more telling. Today in the House of Commons there was a vigorous debate by the Bloc Québécois on an issue that I, Senator Eyton and others have been working for some time. That is the creation of a single regulator for Canada. Again, Mr. de Rato presented a strong position saying that Canada is the only country in the Western developed world that does not have a single regulator and telling us to get on it because we are losing our competitive edge.
If that is a correct summary by me of the managing director, why can we not get as candid information from the IMF to help us in our particular work? Why is there is reluctance and a legislative restriction for us to get candid views on a matter of great importance to Canada's competitive position as well as to the expenditure of Canadian taxpayers' dollars?
Mr. Jenkins: The advice that the IMF provides to Canada is delivered through annual economic reports on Canada. It is an obligation of membership in the IMF that each member undergoes what is called an Article IV review by the IMF staff. Members of the permanent staff of the institution, not people like me, consult with a wide range of people. They prepare a staff report that is quite detailed. That report is presented to and discussed by the executive board.
In Canada's case, that staff report is published in its entirety. As I said in my statement, it is part of the 75 per cent to 90 per cent that is published. The articles of the IMF were written 60 years ago. They are grounded in the view of the fund as a confidential adviser to its members.
Senator Grafstein: Mr. Jenkins, the incidents I referenced were not confidential. Mr. de Rato gave a public statement opining on Parliament's management of our public resources in two very serious areas. That was not confidential, and I believe it was unilateral.
Mr. Jenkins: Yes, I understand.
Senator Grafstein: Why is there the hesitancy here?
Mr. Jenkins: The point I am trying to make is that in terms of the parallel to other documents of the fund, there is the same degree of transparency that there was with the managing director's statement. The IMF's report on Canada that included a call for a single regulator is characteristic of these reports. There has been such a call for many years. Those reports are published and are available on the IMF's website.
A summary of the discussions of the executive board that considered the Canada report are also published on the IMF website. I have not double-checked this, but I would be surprised if I am wrong. The report would include language to the effect that executive directors agreed that Canada should have a national regulator. They would opine on that particular question.
That expression of the sentiment of the board is public. The underlying analytic document prepared by the staff is in the public domain. That is where an opinion on a national regulator would be in the normal course of events. It would touch on issues germane to productivity and raising living standards.
What is legislatively constrained is the actual micro-release of representations to the board. Those are deemed to be confidential based on executive board decisions dating back, I understand, to the earliest meetings of the board in 1946 and subsequent interpretations.
I would submit that, substantively, an enormous amount of information about the fund's views and recommendations is in the public domain. There is not, in broad terms, this inconsistency between the managing director expressing a view and other parts of the institution.
Senator Grafstein: As an example, let us assume that the Government of Canada may have been hesitant about this bill and sought the advice of the IMF. Would the IMF respond to that request and publish documents or studies from the fund based on certain questions the government might ask on a comparative basis?
You know the subject matter we are dealing with today. If the government requested a view about this on a comparative basis with other countries, would that be forthcoming from the IMF?
Mr. Jenkins: Do you mean if the Government of Canada requested a legal opinion from the IMF?
Senator Grafstein: No, an economic opinion. The managing director has issued economic opinions about Canada's economic policies. We are talking about economics here. Is that something the IMF would consider?
Mr. Jenkins: To be clear, in your example, the Government of Canada asked for a report on Canada's economic situation and prospects?
Senator Grafstein: Its economic situation as it applies to CIDA, because it is a large part of our GDP, our revenues.
Mr. Jenkins: The Government of Canada could make a request to the IMF to evaluate the effectiveness of the Canadian aid program.
Senator Grafstein: Yes.
Mr. Jenkins: Whether the IMF would feel itself competent to prepare such a report is a question. I alluded earlier to the fact that the IMF is a monitoring institution rather than an aid agency. In the first instance, you are asking me to speak on behalf of IMF management rather than the board.
Senator Grafstein: Just give a view rather than an opinion.
Mr. Jenkins: I think they would probably say no, we are not competent to do this. Maybe the World Bank is competent. There are bodies at the OECD. There is the Development Assistance Committee, DAC, of the Organisation for Economic Co-operation and Development, OECD, which does prepare reports on the effectiveness of countries' aid programs.
However, I think the IMF would say that we are a monitoring institution. In a sense, we are like a central bank. This is beyond our competence and we would rather not do this.
[Translation]
Senator Dallaire: My question is for you, Mr. Jenkins, nd I will use the exact terms that I heard, in order to make sure there is no misunderstanding.
[English]
You are the senior advisor to the executive director for Canada, Ireland and the Caribbean; is that correct?
Mr. Jenkins: Yes.
Senator Dallaire: Are you the senior advisor to the Canadian representative?
Mr. Jenkins: I would say no, for the reasons that I mentioned earlier.
Senator Dallaire: I am going back to those. Is the executive director of the Canadian constituency the Canadian representative? Is he or she double-headed? I am hoping to be helpful in our exchange here, because we are fiddling with words.
If you remember, we are talking about a summary of any representation made by Canadian representatives. The bill does not ask that the Canadian constituency be brought to the attention of the Canadian government; it is the Canadian representative's inputs into the priorities and policies. In so doing, in your presentation, you made it quite clear that he is the executive director of the Canadian constituency and he is caught up with these other people.
I still feel that we are trying to target a specific person who has a specific role and responsibility to Canadians. I am interested in a Canadian representative's point of view in what is being presented by Canada in those bodies. It would seem that with the whole argument of transparency and so on, that is what we want to know.
I would also add, to assist in your answer, that we are asking for a summary ``made by.'' We are not saying we want to see it before he makes it; we want to see it after. We want to get a feel. We want to get a sense of what is going on, which may be six months later. Depending on how the reports are made, it could be even a year after the fact. I question that the confidentiality exercises might still be pertinent at that point.
I need to know who this animal is and why we cannot get that information.
Mr. Jenkins: The second part of your question is, I think, easier to answer, so I will address it first and then go back to the first part.
I have talked about the issue of a summary versus the document itself. There are complexities there, but I think I have laid that out as best I can.
The issue of timing I do not think is germane to our concerns. The written representations that I referred to are always confidential. They are confidential as they are written, as they are tabled and years after the fact.
The fund does have a policy on access to its archives, but that is many years down the road. I am not familiar with its details, but it is very far into the future. I think it is almost like access to classified documents in Canada.
I left the first part of your question for last because it is a very straightforward and simple question for which I do not have an easy answer. You used the phrase ``Canada's representative at the IMF.'' I submit that it is difficult to be clear-cut about whether Canada has a representative at the IMF in the way that you put it.
Canada is entitled to nominate an executive director for the members of our constituency, who then vote on him. That is purely an informal arrangement. Other constituencies do it differently. They have rotational schemes and all sorts of things. In Canada's case, because we are very large relative to the other members, the deal is that we always can nominate the executive director. He is elected by the others.
Naturally, in doing his job, he brings a Canadian perspective, if only because he is a Canadian national. However, he has no formal responsibility to represent Canada in the way that an ambassador would, for example. The arm's- length nature of the relationship is set out very carefully; and incoming executive directors are reminded in their briefings from the IMF general council of this arm's-length relationship.
When you are sitting around the board table, you do not have a flag in front of you. Executive directors are referred to by name. They are individuals who have some country affiliations. It differs from constituency to constituency, and they may or may not bring those affiliations to bear. However, they are not national representatives in a straightforward way, as your question perhaps presupposed.
Senator Dallaire: Let us say the Canadian constituency is run by an Irish gentleman. The Canadian input into what this executive will articulate within the body politic there would be presented, argued and referenced in what fashion?
Mr. Jenkins: It would depend on the issue. Reviews would come from Ottawa; depending on the issue, they would come from the Department of Finance, the Department of Foreign Affairs and International Trade, CIDA or the Bank of Canada. They would be conveyed to the Irish executive director, either by telephone or in writing. He would weigh those. He would consider them alongside the instructions or recommendations he was receiving from Dublin, and he would try to form a consolidated position.
That position would not necessarily make everyone in the constituency happy. There may be some issues where the largest country in the constituency simply has to say that on this issue, Ireland, in your example, calls the shots. You cannot do that very frequently, or you will not have a constituency anymore.
Senator Dallaire: All we are asking for is what that Canadian representative articulated to that gentleman from Dublin in regard to the inputs into priorities and policies that are being debated, discussed and decided upon there. We are not asking the executive director of the Canadian constituency to give us the input of that dimension. We are asking for the Canadian representative's input into how we are seeing the evolution, whether it is successful or not, and the focus that has been brought forward.
As you have indicated, maybe what we are asking is already in some of the reports that are going into the operations of government through the Department of Finance and so on. One difficulty we have discovered in trying to bring this bill forward is trying to clean up the information or, put another way, trying to collate it in a more logical way. Now, it is going all over the place and you cannot get it together because different departments report differently at different times. There is no sense of what we are trying to do, which is to give a focus to our international development by finding out what is going on, including within the Bretton Woods exercises.
Is it not pertinent that we would want to bring that information to the minister who has that responsibility to ensure that he or she is in line with what we would consider to be our priorities and policies and what is being argued at the IMF?
Mr. Jenkins: That is not how we had interpreted the intent of clause 5(1)(d). As you explained it a moment ago, if I understand correctly, by ``Canadian representatives,'' you meant not the Canadian executive director in Washington but, rather, our interlocutors in Ottawa at the Department of Finance, the Bank of Canada, CIDA and the Department of Foreign Affairs. They are the Canadian representatives for purposes of the representations in clause 5(1)(d).
Senator Dallaire: Also whatever body exists of the Canadian position in the IMF.
Mr. Jenkins: On the first interpretation, that what is sought here is a compendium, if you will, of the advice, recommendations, instructions and orders that we receive from Ottawa, I can have no view because, in a sense, those are departmental documents. They would presumably fall under established policies for disclosure, including access to information and privacy legislation. There would be issues to the extent that they were dealing with documents of the fund and providing views on documents of the fund that were not public, and they typically do. They say, ``We disagree with what is in paragraph 17.'' If paragraph 17 is in an IMF document, then you would have an issue because the document as released would either be incomprehensible or would disclose something about the IMF document that Canada does not have the latitude to disclosure.
I am not quite sure about the second part of your question and the body of representations.
Senator Dallaire: Regarding the executive director inside of a Canadian constituency and the evolution of the processes of priorities and policies that are debated and discussed and decided upon within the IMF, is there no inside body to which we can turn? The question is about the Canadian representatives. The Canadian representatives could be the Department of Finance people who sit down with the executive director and find out what the policies are and what you people decided and then bring that back. You are saying there is already a report, and the report is going all over the place, but seemingly it is not sufficient to tell us what is going on. We are trying to find a methodology for finding out what is going on after the fact in order to give transparency to what is happening and consistency with policies like this bill is calling for, turning it into law, poverty reduction.
There is a structural problem there, even with the fact of ``Canadian representative,'' is there not?
Mr. Jenkins: Yes.
Senator Dallaire: The problem is not that we are not defining ``Canadian representative''; it is how the Canadian position is being played out, what is being decided and ultimately how that feeds back. That is what we are going for. We are not trying to cut open the IMF and get at its secrets. We are trying to find out how we are doing and how we are influencing the situation.
The Chair: That brings today's meeting to an end. On behalf of the committee, I wish to sincerely thank Mr. Jenkins for his contribution to our deliberations. It was extremely useful. I hope to see you again some day, probably not in this context but some other one.
Before formally adjourning, I would indicate to committee members that our witness tomorrow will be Mr. David Horton, the executive director of the Canadian International Demining Corps. Thank you, and good evening to everyone.
The committee adjourned.