Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue 3 - Evidence - Meeting of December 12, 2013
OTTAWA, Thursday, December 12, 2013
The Standing Senate Committee on Foreign Affairs and International Trade met this day at 10:30 a.m. to study security conditions and economic developments in the Asia-Pacific region, the implications for Canadian policy and interests in the region, and other related matters (topic: Burma (Myanmar)).
Senator Percy E. Downe (Deputy Chair) in the chair.
[English]
The Deputy Chair: Honourable senators, the Standing Senate Committee on Foreign Affairs and International Trade is continuing its study on security conditions and economic developments in the Asia-Pacific region, the implications for Canadian policy and interests in the region, and other related matters.
In our first session this morning, we are pleased to welcome Mr. Don Campbell, Senior Strategy Adviser, Davis LLP. He is also a former Deputy Minister of Foreign Affairs and International Trade, and a former Ambassador for Canada. We also welcome Mr. John Weekes, Senior Business Adviser, Bennett Jones. He is a former NAFTA Chief Negotiator and former Ambassador of Canada to the World Trade Organization.
Mr. Campbell, Mr. Weekes, we will hear from each of you in turn. I understand, Mr. Campbell, you're starting.
Don Campbell, Senior Strategy Advisor, Davis LLP, and Former Deputy Minister of Foreign Affairs and International Trade, as an individual: Good morning, honourable senators. I'm very pleased this morning to appear before you. I would like to make a few opening comments, and I look forward to the question period.
I appreciate very much that the Senate committee has taken up this issue, which is a very important one and is important to me. I have had a front-row seat to the dramatic changes that have taken place in Asia for many years in my public service career as an ambassador to both Japan and Korea, more recently in the private sector with CAE, a major Canadian company for whom Asia has been a significant market; and most recently, as international Co-Chair of the Pacific Economic Cooperation Council, more commonly known as PECC. PECC comprises all of the Asia- Pacific Economic Cooperation countries, plus a couple of others. It is a track two process but one could almost call it a track one and a half process since a number of the economies there have government officials involved in it.
I think senators on the committee are fairly familiar with the dramatic transformation that has taken place in that part of the world, and I don't intend to dwell on that set of issues other than the geo-economic and the geopolitical influence that that region of the world has brought to bear, starting first of course with Japan, then the so-called Asian tigers, more recently China, and now, of course, other countries in that region, including India.
One important point is that this region of the world will have a significant impact not only as the fastest growing economies and responsible for most of the increase in global growth but also, in a much more geostrategic sense in terms of the international institutions and the rules of governance, for global prosperity.
Also, I have seen the Canadian role in this region through a long-term lens. Canada has a long, long history in Asia, going back even before the last century, having established a fairly significant role in a number of countries. We went through a lost decade, if I can put it that way, probably starting immediately after the APEC meetings held in Vancouver in 1998, when Canada turned its attention much more to North America and we were seen and perceived to have lost interest by many Asian countries; and I think there is a certain truth to that. Since that time, in the last four or five years, we have made some fairly dramatic progress, but a great deal needs to be done to both show our credentials and to ensure that our prosperity, which is increasingly dependent on this portion of the world, is assured.
I had the opportunity to chair a task force for the Asia Pacific Foundation last year, which looked at the emerging regional architecture, i.e., the institutions in Asia, and what Canada's role could or should be in those institutions. That report, with a number of recommendations, came out last fall.
In the report, we recommended that Canada take a whole-of-country approach, not just a whole-of-government approach, toward Asia-Pacific. A commercial strategy alone will not be sufficient. This is a region of the world where economics, national interests and politics are very much intertwined and where we must not only be but be perceived to be a significant and long-term player. That involves Canadian participation in a lot of the institutions that we currently are not a member of, some of which we are a member of; and it involves a sustained approach. There's a lot of activity but the activity doesn't necessarily add up as yet to a strategy. We need to be more coherent in our approach towards Asia.
More specifically in terms of this approach, we recommended a national effort that would involve the federal government, provincial governments, municipalities, the private sector, and academia having an ongoing exchange and role in some kind of organized way, which is currently not the case, and that we move forward on a number of the institutions. Since that report, and I'm not saying the report is responsible for it, we have made known our interest in the East Asian security dialogue, which is becoming the premier Asia-Pacific dialogue, of which Canada is not a member. We also recommended that we need to pay more attention to the ASEAN group of countries, both in economic and political terms, because the countries of ASEAN are central to a great deal of what is going on in Asia.
On the trade and investment side, we advocate a regional approach, which has manifested itself in Canadian participation in the Trans-Pacific Partnership and in the pursuit of bilateral negotiations, some of which are underway and some of which have been stalled.
I'm pleased to see that the Korean-Canada free trade agreement negotiations are back in operation at least and hope for an early resolution. There are the Canada-Japan negotiations and the Canada-India negotiations, and we recommended a Canada-ASEAN trading arrangement as well.
Obviously, not all of these initiatives will come to fruition. This is an effort on the part of government, and it will be up to the private sector, which I think previous speakers here have indicated is perceived to have been somewhat timid and cautious — I'm not sure that's necessarily the case in all respects — to take advantage of the opportunities that will drive that.
We make 17 recommendations in all. I won't go into all of them in my comments now, but I would be pleased to discuss those in further detail.
One other area that I think the committee may have heard about from other witnesses that I think is worth addressing, which our report did not address, is the issue of so-called Asian competencies. By that I mean the readiness of Canada and Canadians to participate in education, language training and awareness. As I think many of you are aware, there is a surprisingly low level of knowledge and a relatively low level of interest in Asia across the country, which gets more pronounced the farther east you go in Canada. Being based in Vancouver, I don't see that issue there, but I certainly see that as one goes farther east. I think it's very important that we make this whole-of-country approach in terms of ensuring our own prosperity and in terms of the role that we wish to play in international fora, as well as in regional fora.
The Deputy Chair: Thank you very much, Mr. Campbell. We appreciate your remarks. Your expertise on the matter and the region is outstanding, given your long service not only with the Government of Canada but also in the region. We have questions, but before we get to those, I will call on Mr. Weekes for his comments.
John Weekes, Senior Business Advisor, Bennett Jones, and Former NAFTA Chief Negotiator and Ambassador to the WTO, as an individual: Thank you very much, Mr. Chair. First, I will save time by endorsing everything that Don Campbell has just said. I think it was an excellent presentation and forms a good basis for discussion here this morning.
Let me add a few points. First, a little bit about me and Bennett Jones. Our law firm has many clients with deep interests in the Asian marketplace. We have opened a representative office in Beijing. In addition to my relationship with the firm, I'm a director of the Alberta Livestock and Meat Agency, and I have now become the chairman of the market access committee of the board of that group. This gives me, with my colleagues in Alberta, a lot of opportunity to think about what market opportunities would be most important for the meat and livestock sector in the Asia- Pacific region.
At the present time in international trade relations, we're really engaged in what has been termed competitive trade liberalization. Everybody is out there trying to negotiate free trade agreements with the most interesting markets, and the people who negotiate the agreement first are the first ones to be able to reap the benefits from that process. We have seen this work in our favour, for instance, in establishing a free trade agreement with Chile, some years ago, ahead of the United States. We were able to get into that market ahead of our American competitors. We have recently seen the reverse happen in Korea, where the Americans were able to get into the Korean market with their free trade agreement, which is now being implemented, and we're still negotiating ours. The problem there for us is that in particular in the livestock and meat sector, and in the agriculture area more generally, a lot of the highest tariffs in the main Asian markets are still present. For instance, to take the Korean example a bit further, the tariffs on beef and pork in the WTO, the so-called ``most-favoured-nation tariffs,'' to which we're entitled, are 40 per cent. The tariffs for the United States are now being phased down to zero over an extended period of time, but they're already significantly below the rate that Canadian suppliers have to pay. Similarly, the European Union has a free trade agreement with Korea, and they're a major supplier of pork. So we have seen our pork markets in Korea erode substantially. I think we were selling Korea in the order of $400 million worth of pork products annually, and that has now virtually disappeared. Not only that, Australia and Korea announced a few days ago that they have concluded their free trade agreement. So another major competitor of Canada's in the meat and livestock sector will now have duty-free access to the Korean market, and we don't.
We're also, of course, engaged in negotiations with Japan. Many elements of the meat and livestock sector and other parts of the agriculture sector see the Japanese market as a major prize. I believe that 60 per cent of the caloric intake of Japanese consumers is imported, so they're a major importer of agricultural goods. It's a very high price, quality market; it's one in which we could do very well. We're negotiating a bilateral free trade agreement with Japan now, and I think it would be important for Canadian negotiators to try to keep focused on that free trade negotiation with Japan so that it can be brought to an early conclusion.
We're also engaged in free trade negotiations with India, which I think is important. Any market of that size, and with still impressive growth rates, we should not ignore.
With China, we have begun a process of looking at how we can deepen and strengthen our economic and investment relationships, but we are not yet ready to consider moving toward a free trade negotiation with that country. The market potential there is important, and we're already shipping significant amounts of product into that market. For instance, I believe our largest export to China is now canola products, $3 billion worth of them a year. There are major opportunities there that can be built upon. I think we need to think of how, prior to a period of looking at a grander approach, maybe a free trade agreement, we, as a practical matter, through various cooperation discussions, look at how to improve the prospects of developing beneficial trade relations with China that will help Canadian producers across Canada.
To turn to what we trade junkies call plurilateral front, let's consider the Trans-Pacific Partnership negotiations. Mr. Campbell mentioned that. It's very important that Canada is engaged in that. I think we should give that a high priority. I'm somewhat more skeptical than some as to how long it will take to complete that negotiation. The original efforts to finish it by the end of this year have clearly not borne fruit. People are talking about doing it early in the course of next year. There is one very important issue, which is lurking in the background on this, and that is the United States' efforts to pass their so-called trade promotion authority or fast-track negotiating authority. They have been without this kind of authority now for a number of years. This is the authority that allows the administration, once a free trade agreement has been negotiated, after working closely with Congress during the negotiations, to present the results to Congress together with implementing legislation. Congress, under this fast-track or trade promotion authority is required to vote the entire package up or down. They're not allowed, at that point, to make any amendments.
Without that sort of legislation, the problem is that the agreement as a whole might meet with the favour of the U.S. Congress, but the Congress will start looking at individual pieces of it. Maybe they do not like what's in it relating to softwood lumber. Maybe somebody doesn't like what's in it about how it's going to affect U.S. sugar policy. So the Congress can say, ``Well, we think this agreement is a fine agreement, but we're voting that we're not going to implement it with respect to the following six or eight provisions.'' You can imagine that knocks all the negotiations apart, and the delicately negotiated balance can become unstuck.
It's unlikely, frankly, that America's partners in the TPP are going to want to bring it to a final conclusion without the United States having this authority, and I don't think the U.S. administration will want to bring it to a final conclusion without having that authority, because it's going to create for them a process domestically with Congress that would be very difficult to manage. I just mention that as something I think that Canada and Canadian negotiators should very much keep in mind as we move towards the conclusion of the Trans-Pacific Partnership negotiations.
Lastly, a very brief word about the World Trade Organization, which, until recently, I think people had given the Doha Round up for dead, and it still may not be revived in the form in which it was originally set up. It's worth noting that last week in Bali, a WTO ministerial conference did complete a number of agreements, including one very major agreement on a trade facilitation agreement. These are mainly pieces of things that were included in the Doha Round of trade negotiations that the WTO members decided to see if they could bring a package of these together. It was difficult to do so, but with the help of the new Director-General of the World Trade Organization — who is a former Brazilian diplomat, a very able man — they have been able to show that actually you can put a multilateral agreement together in the WTO.
The trade facilitation agreement, which is basically about looking at how to remove red tape at borders, is estimated by the World Bank and by the World Economic Forum to be one which could actually add a trillion dollars a year to the global economy. Some of the estimates suggest that this trade facilitation agreement alone would be more significant than eliminating all the remaining duties among countries.
This is a significant achievement. I think it's worth mentioning that we may yet find it an important vehicle for moving trade liberalization forward, and the development of a rules-based system in the Asia-Pacific region will be, at least in part, also accomplished through the WTO.
The Deputy Chair: Thank you, Mr. Weekes, for your interesting presentation.
[Translation]
Senator Fortin-Duplessis: I want to begin by saying hello and letting you know how happy we are about you joining us this morning, as you have appeared as witnesses in the past, you have gone to Asia and you have held certain positions. I think that this experience enables you to recognize the best economic development opportunities for industries and Canadians.
A few days ago, the government announced the new thrust of its foreign policy. One of the things the government wants to do is focus our diplomacy more on market development opportunities for our companies. It also wants to emphasize trade opportunities with certain emerging economies.
I have two questions, and I will ask them both now to give my colleagues an opportunity to ask their own questions.
First, do you think this government approach could operationalize in a country like Burma? Second, how do you think Canada should proceed to, on the one hand, encourage trade between our two countries, and on the other hand, provide Burma with support on the road to democratic consolidation?
[English]
Mr. Campbell: Thank you for that question. I have had the opportunity to read the recent document on a global trade strategy. I must say that this strategy, of course, has been built upon a long history of similar strategies, so we're not starting from the ground or from square one. I recall very well in the 1990s the Going Global Trade Strategy and subsequent strategies.
I think that this is a very important focus, as long as it is not a singular focus, because, as I said in my opening remarks: in Asia, relationships matter. Doing business is a question of developing relationships; and relationships, both from the business community and on the part of government, have to be broader than just commercial aspects.
Burma is in a very exciting phase, having come from out of the darkness, as one could say, into the light. There are still some very significant issues in Burma regarding its transition to a more modern economy. There are economic issues; there are political issues; there are human rights issues. I think a lot of those issues need to be addressed at the same time as the commercial activities.
I'm pleased that we have established an embassy with a new ambassador in Burma, and presence on the ground is going to be tremendously important. There's going to also be a tremendous amount of competition. A colleague of mine who was recently there says countries and companies are literally lined up, and there is a capacity problem in Burma right now even receiving the people who are looking for business or looking for opportunity or are there in some way to assist.
Our approach to Burma — and I think the government recognizes this — needs to be a several-pronged approach, not just a commercial approach but assistance to Burma in terms of capacity building in that country.
[Translation]
Senator Fortin-Duplessis: Do you have anything to say, Mr. Weekes?
[English]
Mr. Weekes: It's important to note that in this case the government in Burma has decided first on a political reform before looking at an economic opening. Certainly in my experience, I have seen cases where economic cooperation, economic liberalization, can help promote political liberalization. In this case, with political liberalization already under way, the case for supporting that with economic cooperation is even stronger, and I think the Canadian government should be doing what it can to create the right conditions that will allow Canadian business to enter into this new — it's really just opening up — market on the same basis as their foreign competitors in other countries.
[Translation]
Senator Fortin-Duplessis: Thank you both very much.
[English]
Senator Ataullahjan: Thank you for your presentations. We've heard conflicting points of view about the level of Canadian presence in the Asia-Pacific region. It was interesting listening to you, because you feel also that we were losing interest in that area. You talked about a whole-of-country approach. I gather that you feel that we lack strategy.
What can we do? Should we establish offices in certain countries; should we send high-level delegations; or what other strategies can we employ?
Mr. Campbell: First of all, I talked about, in a sense, a bit of a lost decade. If you take the five major export markets for Canada in Asia over the period of 2000 to 2010, our trade was basically flat or declining.
When I was in Japan, I recall that the two-way trade relationship was about $25 billion. It's about $25 billion today, having been less than that during part of that period, so it is coming back up.
If you look at our major competitor in that market, the country that sells most of the same products and goods — products more than services here — is Australia. Australia's trade with those same five markets that I'm talking about, our major markets, increased 400 per cent. We were left literally in the dust. There are a lot of reasons for that, and I think this is worth the committee having a look at not just the Australian experience but their strategy.
In the mid-1980s, Australia held a series of commissions to develop a strategy for Asia. It has been consistent with that strategy throughout that period. Most recently, the Australian government produced a white paper in cooperation with Australian industry, talking about the 21st century for Asia. There are some amazing recommendations: for example, giving every single Australian the opportunity to learn an Asian language. So it starts with education, it starts with language. It involves the business community. It involves academia and the relationship with government.
So when I talk about a whole-of-country approach for Canada, I'm not just talking about government. I think there needs to be a full-court press, as they say in basketball, on this issue on the part of Canada.
Obviously, we're not Australia. We are secure — perhaps too secure — in our North American continent. One could call it almost a cocoon over the last period of time. That has reaped enormous benefit for us, but obviously we have to diversify our trading relationships. The recent announcement of the agreement in principle on the CETA, the Canada- EU agreement, is important, but the fastest-growing economies are obviously the Asian economies.
So, yes, it does take presence, and our presence has not been increasing in Asia. While we've had additional resources put into China, we've had reduced resources put into Japan. So it's resources on the ground. It is also high- level attention and leadership. I must pay tribute to Ministers Baird and Ed Fast. Both of them have made an enormous number of trips and the Prime Minister has travelled to Asia on a number of occasions, so those high-level trips are growing.
There are a number of provincial visits. Premier Christy Clark has been to Asia no less than three times since assuming her duties, but I think what's missing in all of this is a coherent strategy. There's a lot of activity, but activity doesn't necessarily mean strategy. That's why one of the recommendations that we made in the task force was to create a forum — creating committees is not an answer — where we could have a dialogue among governments, federally and provincially, with the private sector and with many of us, some of whom are Asian hands and some whom are not, in terms of being more coherent in what it is we're doing with respect to a long-term strategy.
Senator Ataullahjan: It's interesting that you talk about Australia having a strategy, because if you travel in the Middle East it seems Australia and New Zealand have totally cornered the meat market, the exports. It's a simple thing like having halal meat. For those of us who have travelled there, you see that most of the lamb and beef comes from Australia and New Zealand. It might be something worth looking at. If the market is there, maybe we need to expand our avenues and look at other ways of reaching into those markets.
Senator Housakos: I've been listening carefully to your comments, and you've given us a lot of insight this morning. In particular, I want to follow up on your comment about how we develop a strategy vis-à-vis our trade relations with the Asia-Pacific countries. My area of interest in particular is how we can expand the services sector, which clearly has lagged behind when it comes to trading commodities with the Far East in the exchange of actual give and take of products. I think it's a sector that has been growing, as we've seen over the last few decades with our economic exchanges with the U.S. and the EU.
I find it intriguing how you point out that there's been a lot of effort to overcome some of the obstacles: distance, culture, language and business habits that we Canadians have. There are obviously cultural differences in dealing with the Asia-Pacific countries.
Of course, the provinces have made efforts, the federal government has made efforts and the private sector has made efforts. The question is how do you think all those Canadian components can come together, and who should be doing what to be the catalyst to bring them all together in order to be more cohesive in our strategy? I find it very difficult. If Canadians are going to be significant players in the Far East, we must start adapting our educational system to be designed and more conducive to their linguistic and cultural habits, for example. Our financial institutions have to become more in tune with the financial institutions of the Far East and become more wide in scope rather than parochial, as they have been here in Canada.
That's a broad question.
My second question is, in the last few years it's clear, especially in the case of China, that not only is the Far East the place for cheap labour and developing cheap products, but they've become major players in terms of capital investments. We've seen China come into Canada in the last few years and make significant investments in the mining industry, and they have been significant players in investing capital in the U.S. market. I've seen in the last few years that even in the EU they've become significant players in investing capital.
Are we doing enough to encourage them to come to Canada? In what sectors, above and beyond the mining industry, is there potential for them? Are we, as a Canadian government and financial sector, doing enough to understand that they've become big capital investor players in the world?
Mr. Campbell: I will take a crack, and I'm sure John will have some thoughts on this.
The services sector is already a very important sector, and an increasingly important one. As you have a rapidly expanding middle class in a lot of these countries, led by China — where the middle class is probably between 300 million and 400 million people alone and rising — there is going to be a tremendous demand for services. We have some shining examples, of course, in Canada. I could take the insurance industry: companies like Manulife and Sun Life are two leaders who have major Asian portfolios, and rapidly increasing portfolios throughout Asia.
In other areas we're very spotty. If you take Japan, for example, the law firm that I'm associated with, Davis LLP, is the only Canadian law firm in Japan and has been there for about 15 years now.
There are other ones. John has mentioned his firm in China, and there are a number in China. But in many ways some of the elements of the services industries are fairly nascent in terms of addressing the opportunities that you find in Asia.
To go back to China for a moment, it's not just the rise of the middle sector. We tend to look at China as the factory of the world. It is no longer going to be the factory of the world. That's rapidly changing. There has been what they're calling ''re-shoring.'' Manufacturing activity is coming back to North America. It's going elsewhere in Asia. So you're going to find a lot more domestic demand for goods, but, I think, particularly for services.
I think you've certainly put your finger on the opportunities there. The more challenging part is how do we address and how do we coordinate ourselves in terms of doing that? I don't have any simple answers to that.
First of all, it takes a more forward, a more aggressive attitude on the part of individual companies to get out there. One of the things that is probably true anywhere, but certainly true in Asia, is you don't go on one trip. You have to be sustained and tenacious, and this can be a challenge, particularly for small- and medium-sized companies. Relationships matter, as I have said. You usually develop the relationship before doing any real business, and you don't do that on one trip or even two trips.
Obviously, the Trade Commissioner Service is geared to assist in whatever way possible and advantage should be taken of that as well.
As far as investment is concerned, yes, we are going to see significant amounts of investment come from Asia. It is already coming from Asia. Many of these countries, including China, are still net inward investors, investment. There's more foreign direct investment going in than coming out, but I think that is going to be changing.
We have recently made changes, as you know, in the Investment Canada Act in Canada. There is a particular neuralgia on the issue of state-owned enterprises, and that's particularly related to China, but I think we will have to recognize that most of these countries in Asia have state-owned enterprises. It's particularly true in the energy sector, but not solely in the energy sector. Our neuralgia on the issue of state-owned enterprises and some of the uncertainty currently surrounding that is having a dampening effect on investment, particularly in the natural resources sector. Our Prime Minister has said that this is an area where he wants discretion. Investors are looking for certainty, and somewhere we have to saw off those two competing sets of issues.
There will be increasing pools of direct investment coming not just from China — there always has been from Japan — but from countries like Malaysia and Indonesia in the future, and we need to provide as hospitable an environment for that investment as we can.
Mr. Weekes: I agree with what Don has just said. To add just a couple of points, one is you mentioned low-cost labour in China. I think it's worth taking note of the fact that Chinese labour is actually becoming more expensive, particularly in the coastal areas.
We're seeing a fair amount of re-shoring, or whatever you call it, of production coming back to North America. Some of it's going to Mexico and some of it's going to the United States. I have seen interesting studies recently showing that Mexico, in terms of delivering product into the United States market, is becoming more competitive for a number of products than China, partly because of transportation costs which, given the high costs of energy, are expensive. The transportation costs are obviously less to ship from Mexico to the United States than from China.
On services, I think it's useful to recall, in addition to what Don said, that a lot of services are inherent in the so- called raw materials that we export. When you're talking about agricultural products, you're looking at an increasingly sophisticated industry of developing seeds, genetically modified products, new types of farming, harvesting. You're looking at transportation. All of these service components are important in agriculture.
The same is true in the metals and minerals industry, starting from the role played by, say, the Toronto Stock Exchange in financing a lot of the junior investment in metals and minerals development, not only in Canada but around the world, but on expertise that has been developed in Canada, and then looking at the other sophisticated techniques needed to extract these products and move them efficiently to markets.
We sometimes sell ourselves short when we call ourselves, from time to time, hewers of wood and drawers of water. Drawing the water and hewing the wood is perhaps a more complicated and sophisticated practice than it was 50 years ago.
There has also been a lot of very interesting work that rather than taking the traditional ``what crosses the border'' view of developing trade statistics, some international organizations — and the Conference Board of Canada has done this — have begun looking at value-added trade, looking at trade from the point of view of what value is being added to the trade in, say, Canada or some other country. If you apply this new approach to Canadian trade statistics, services trade comes out as a much larger proponent of our trade than it does in the normal trade statistics.
So part of figuring out what's happening is getting better information about what's actually going on now. This would also be very helpful in terms of planning where a government might intervene to assist the process of a further developing of our exports and economic partnerships with other countries.
Senator D. Smith: On the point Don Campbell made, I can't resist telling a story.
Years ago I used to go over to the Hong Kong office of my law firm a lot. I remember early on there was a Chinese lawyer who I used to meet with and he'd refer a fair bit of work. On one occasion he said, ``In the West you do business and sometimes you become friends. Over here we like to become friends first.'' I understood the countless lunches and dinners I would do whenever I went over there.
We're back studying Asia and the ASEAN group in particular, and the economic growth over there is almost unimaginable to Western economies. I'll give you one example.
For some years I was on the board of a large Indian bank. That bank opens a branch every day, on average about 400 branches a year, and if a branch is not profitable within two years, it's merged with another local bank nearby. The percentage of them that are profitable within two years is in the high 90 percentile.
Now, I want to get at one angle. In terms of Western democratic countries, we are becoming more multicultural at a faster rate than most other countries. In terms of the United States on a per capita basis, we have about three times as many immigrants coming into the country on a per capita basis.
I live right in Yorkville, not speaking in Senate terms. That is my primary residence. My secondary residence is someplace else, but I live right in Yorkville in downtown Toronto.
You are very aware of how multicultural Canada is becoming. To what extent do you think that the growth of our multicultural community helps our potential? I'm thinking of Asia in particular, because China and India are one and two in terms of people coming here. They reverse their role sometimes, but those are the two main countries. What are a few of the areas that you think represent the most potential? You have already referred to the insurance company angle, which is valid and I'm familiar with that. How much does the multicultural fabric of our country help? What areas do you think represent the best potential for export growth?
Mr. Campbell: Well, I think the fact that we are multicultural with a very Asian migration, it has been the most significant migration into Canada for quite a number of years. That certainly gives us a significant leg up because those who are relatively recent immigrants and first generation immigrants usually speak the languages, so there is language ability. They understand the cultures. Their challenge, of course, is that in coming to Canada, they're coming for new lives and they have to adapt to Canadian culture and Canadian ways of doing things.
I think there is an increasing number, aside from the so-called investor class of immigrant, and I see this particularly in a city like Vancouver. An enormous number of people who are originally from Asia are doing business in Asia, so obviously it gives us an advantage.
But at the same time, I don't think that we should just rely on the so-called diaspora. We need to have a much broader approach in Canada. As I said, it involves the whole of the community and not just them.
The short answer is yes, it does put us in an advantageous position, and we should make use of it.
Senator Oh: You have both spent a lot of time in Asia in your previous portfolios. Do you see efforts being made by the Government of Canada in engaging ASEAN countries in the short term and long term? What are the short-term and long-term reflections of the Government of Canada?
Mr. Campbell: As I said, with respect to the short term, there has been a lot of attention paid to ASEAN in the last couple of years. ASEAN is central, in political terms, to the ASEAN dialogue and the ARF, and we are part of that. As you may know, there has been the creation of the Canada-ASEAN Business Council in the last couple of months, so that's an activity.
One of the recommendations of the task force that I chaired was to consider the negotiation of a Canada-ASEAN trade agreement. While it's not in play at this stage of the game, it is something we should seriously think about.
The trade negotiation field is a bit complicated because quite a number of years ago APEC established something called the Bogor Goals, which called for a free trade area of Asia-Pacific, something called FTAP, but that never came to be, in part because APEC is not a negotiating forum. It's more of a discussion and consensus forum.
Not all of the members of ASEAN are in the Trans-Pacific Partnership negotiations. There is a separate negotiation called RCEP, which other members of ASEAN are part of.
The first point I would make — I think I made it earlier — is that ASEAN, that group of countries, sees itself as very central, and it is very central, to the evolving regionalism taking place in Asia. You obviously have the bigger economies of Japan, Korea and China, who are not members of ASEAN, but ASEAN is playing a central role in all of this.
I think our government would be well-advised to involve itself even more strongly with the ASEAN leadership and with the countries of ASEAN, both the individual countries and with ASEAN as a group.
We did make a move forward in terms of representation with the establishment of an ambassador for ASEAN affairs, but that ambassador is also our Ambassador to Indonesia. Another recommendation of our report is not that the ambassador is not doing a good job, but he already has a full-time job, which is to create a specific ambassador solely for the ASEAN portfolio, and that is a recommendation we would make.
I think in the short term there is a lot of activity, but we need to again think further down the road. Some of these countries are enormous markets in population. Indonesia is an absolutely fascinating country with one of the larger populations in the world, with a huge land mass and resources, and it is a country that has become democratic. Malaysia is another country with a large population. Vietnam is a country very much on the move. These are countries that are, in a sense, the new tigers, and we will see more of them in terms of trade, investment and their role on the world scene.
Mr. Weekes: If I might just add, senator, it is very important to look at how we develop our relationship across the broad front. As Senator Smith said a few moments ago, it's important in Asia that you be friends before you do business, more so than we're used to.
I would suggest that in the current situation, as I mentioned in my opening remarks, we're in a period of competitive trade liberalization. If we don't negotiate agreements first with some of these countries, or at least at the same time as our partners are doing, we risk being in a situation where there will be a structural bias in those markets against Canadian goods. If we're facing a 40 per cent tariff in a market and our American and Australian competitors are getting into that market with a zero tariff, we're not going to be in that market.
So I think a priority should be put on making sure that we're negotiating trade agreements with those key markets at least as fast as our partners. It's important to note that in the recent Global Markets Action Plan the government has put out, the first item deals with targeting markets that matter. I think that the ambitious trade negotiations agreement program of the government should continue to be given a high priority and should clearly be targeted on those markets that are the most important for Canada.
That's not a substitute for broader activity at building relationships, but I think it's the most important component in it because it's urgent. If we don't do that, nothing else we do is going to matter.
Senator Oh: The APEC SME Summit 2013 is coming up next week in Shenzhen, and it's organized by the APEC Business Advisory Council and the APEC China business council. Are you both going to be there? Are there going to be any Canadian representatives there?
Mr. Campbell: I unfortunately am not going to be there, and I'm not sure what Canadian representation will be. I do not know the answer to that, unfortunately.
Mr. Weekes: My answer is the same as Don's. We can't be of any help there.
The Deputy Chair: Senator Robichaud, we're close to time expiring. Please keep your questions and answers short.
[Translation]
Senator Robichaud: I am always in a position where I have to ask very short questions.
How can we build friendly relations while negotiating trade agreements? Do you have an answer to that question?
[English]
Mr. Weekes: Well, it's a different region, but I found out in my experience as NAFTA chief negotiator that I think we did both at the same time.
Negotiating a trade agreement is not really an adversarial activity. It's looking at how you can strengthen the trade relationships and business partnerships with other countries. How do you create an environment in which businesses in Canada and, say, Japan, can do things together more profitably? By its very essence, I think that helps engender a partnership mentality through the trade negotiation.
[Translation]
Senator Robichaud: Mr. Chair, I have one last question that is not related to friendly relations.
Mr. Campbell, I think you lived in Japan for a long time as ambassador. Can you tell us whether Canada could play a role in reducing the isolation of North Korea? That country seems to currently be dormant, but it could be dangerous for the region's security.
[English]
Mr. Campbell: I wish it were dormant, actually. It's a tough question. A lot of us have been close observers of North Korea for a long period of time, and North Korea still mystifies all of us in many ways. I never dreamt, when I was Ambassador to South Korea in the mid-1980s, that North Korea would still exist with its current form of government and in its current manifestation in 2013, so it shows you how wrong I was, but most other people were as well.
There have been numerous activities. North Korea has always been looking for status and for direct relationship in terms of negotiation with the United States, so you have had six power talks. Canada has not been a part of that. I think where Canada has played some role and could play some role in the future is probably more in the so-called track two, in informal dialogue with other knowledgeable people, not necessarily in North Korea but around North Korea, because you need an interlocutor. I think the more formal negotiations will very much be decided by South Korea, China, the United States and Japan and, to a lesser extent, possibly Russia. So I don't see a useful formal role that Canada could play for the foreseeable future in that ongoing conundrum.
The Deputy Chair: I would like to thank the witnesses, Mr. Campbell and Mr. Weekes, for their attendance and their expertise as we try to prepare a report on the Asia-Pacific region and our recommendations to the government. Both gentlemen are now retired from the Government of Canada, but they're prime examples of the expertise and the excellence we have in our public service serving Canada, Canadians, not only in Canada but overseas. Again, gentlemen, thank you for your attendance and thank you for what you've done for Canada in your continuing work.
We're going to start our second session of the Standing Senate Committee on Foreign Affairs and International Trade, its continuing study on the Asia-Pacific region, the implications for Canadian policy and interests in the region, and other related matters.
We are pleased to welcome today officials from Foreign Affairs, Trade and Development Canada who will speak to Canada's relationship with Burma/Myanmar. The head of the delegation is Assistant Deputy Minister (Asia), Susan Gregson, who I understand will have some opening remarks, and before you start you may want to introduce the other members with you today.
Susan Gregson, Assistant Deputy Minister (Asia), Foreign Affairs, Trade and Development Canada: Thank you very much, Mr. Chair and honourable senators, for the invitation to speak to you today. I am the Assistant Deputy Minister for Asia-Pacific and I'm accompanied today by two of my colleagues. I have on my right Jeff Nankivell, Director General for Development (Asia Pacific), and on my left, Peter MacArthur, Director General of South, Southeast Asia and Oceania. I should add that my two colleagues, in the spirit of the newly amalgamated department, recently visited Burma in October of this year, so they will be helping me answer any questions you may have.
Canada's relations with Burma have progressed over the last two years as that country has implemented a series of reforms that have led to improvements in human rights and democratic development, as well as an opening of their economy after decades of tight government control. Nonetheless, Canada continues to have numerous concerns about the situation in Burma and continues to monitor and adapt its policies accordingly.
Let me begin with a short overview of the situation in Burma which has served to inform Canadian policy in recent years. I will start with the historical context.
Throughout the late 1980s and 1990s and the earlier part of this century, the human rights and democracy situation in Burma was dire. It was characterized by violent crackdowns against protestors, the detention of thousands of political prisoners and stiff restrictions on fundamental freedoms, including freedom of the press, freedom of expression and freedom of assembly. The situation prompted Canada, along with other Western countries, to impose a range of diplomatic and economic sanctions and other measures against Burma.
I'm pleased to say, however, that the situation has improved markedly over the past three years. Since the November 2010 general elections, the Burmese government has embarked on a remarkably reformist path. Although those elections were neither free nor fair, they did precipitate a transition to civilian government in the spring of 2011 after decades of military rule. By-elections held on April 1, 2012, resulted in the election to Parliament of several members of Aung San Suu Kyi's opposition National League for Democracy, the NLD party, and that included Aung San Suu Kyi herself. This was a historic development for Burma, considering that Aung San Suu Kyi had spent roughly 15 of the past 20 years under house arrest for her political, pro-democracy activities.
[Translation]
Since then, there have been a number of other positive developments in Burma, including the release of hundreds of political prisoners — with the commitment to release any remaining political prisoners by the end of this year. We have witnessed the dismantling of media censorship, economic reforms, permission for previously black-listed foreign nationals and expatriates to enter the country, and new laws to protect freedom of association and assembly. Ceasefires have been signed with most ethnic armed groups, and further political reconciliation talks are underway.
[English]
In response to these positive developments in Burma, Canada removed most of its economic sanctions in April 2012. However, a list of designated persons and entities with whom Canadians and Canadian companies are prohibited from interacting or conducting business remains in force, along with a prohibition on trading in military or military-related goods.
Minister Baird visited Burma in March 2012 and Minister Fast visited in September of the same year. These were the first-ever visits by a Canadian Minister of Foreign Affairs and Minister of Trade respectively. Burmese Foreign Minister Wunna Maung Lwin visited Ottawa, at Minister Baird's invitation, in early October, 2012. A parliamentary exchange also took place whereby a multi-party group of MPs, led by Parliamentary Secretary Obhrai, visited Burma in February 2013, and this was followed by a reciprocal visit from a Burmese delegation in April 2013.
[Translation]
In July 2012, Minister Baird announced Canada's intention to open an embassy in Burma, and Minister Fast later added that the embassy staff would include a senior trade commissioner.
Canada's first ever resident ambassador to Burma was appointed in March 2013 and presented his credentials in August. Both Canadian mission staff members are currently located within the United Kingdom embassy while work continues to open a stand-alone Canadian chancellery in the near future. Consular services for Canadians are currently provided through the Australian mission in Rangoon, pending full operationalization of the new Canadian embassy in Burma. Having a Canadian presence in the country has greatly assisted in monitoring the evolving developments on the ground in Burma.
[English]
In 2014 Burma will host the Association of Southeastern Asia Nations ministerial and leaders meetings. Canada is a long-standing ASEAN dialogue partner and will be present for some of these meetings. Although significant concerns remain about the human rights situation and much work remains to be done to consolidate democracy and the rule of law in Burma, the recent reforms represent a welcome and positive shift. Canada stands ready to work with all Burmese and international partners working to pursue and consolidate further reforms.
I have a word on the economic commercial situation.
[Translation]
I mentioned that economic reforms have been among the many initiatives undertaken by the Burmese government in the past couple of years.
Allow me to elaborate on the commercial and economic climate, and the potential for Canadian companies to play a constructive role in contributing to sustainable economic growth in Burma.
[English]
Although Burma is a resource-rich country, it suffers from pervasive government controls, inefficient economic policies, corruption and rural poverty. Canada supports the continued reform efforts of the Burmese government and believes the participation of Canadian businesses in Burma's economy can provide a model for responsible investment and business operations, promoting mutually beneficial economic development and contributing to the welfare of our respective countries.
Initial research suggests that opportunities for Canadian companies are strongest in the electric power, infrastructure, aerospace, information and communications technologies, oil and gas and mining sectors. It should be noted, however, that major obstacles remain. Despite new pledges by the government to improve the country's infrastructure, it will take years to marshal the investments needed to yield significant improvements.
Ethnic and inter-communal violence: We have spoken about improvements in the situation in Burma, including the political, economic and human rights situation, but I would like to take a few minutes to highlight a key area of particular ongoing concern, and that is the situation of ethnic and religious minority groups.
[Translation]
Canada has consistently condemned violence and human rights abuses directed against ethnic or religious minority communities in Burma, and called on all sides to work toward a peaceful resolution of the tensions that led to the violence. On October 26, 2012, Minister Baird issued a statement highlighting Canada's concerns. Ambassador of Religious Freedom Andrew Bennett also issued a statement in March 2013 condemning the violence targeting Muslim minorities in central Burma.
[English]
Minister Baird has regularly raised the situation of ethnic minorities with Wunna Maung Lwin, Minister of Foreign Affairs of Burma. Canadian officials have also discussed this issue with Burmese officials and will continue to do so. Canada has urged the Burmese government to ensure that security forces protect the rights and safety of all residents and asked them to facilitate access by humanitarian organizations and provision of assistance wherever it is needed.
A few words on programming: Since 1988, as part of our sanctions against Burma, Canada provided only humanitarian assistance within Burma and longer term assistance to Burmese people in border areas. The easing of sanctions removes constraints on providing long-term bilateral development assistance within the country, and it creates an opportunity for increased engagement. Our department is currently exploring how Canada can best contribute to sustainable economic growth, poverty reduction, support for the peace process, human rights, and democratic governance in Burma going forward.
[Translation]
Canada has already begun to work with its international and Burmese partners to promote freedom, democracy, human rights and the rule of law in Burma. Several projects have already been undertaken to advance these goals. Over the past three years, Canada has committed just under $2.7 million to Burma projects through the Global Peace and Security Fund.
In brief, those projects have enhanced and bolstered the media, provided necessary skills and knowledge to civil society and politicians, implemented a parliamentary exchange, improved political actor knowledge about democracy and federalism, and enhanced local Burmese government capacity.
[English]
Mr. Chair, we have further details on our humanitarian assistance, but in the interest of time, I would refer the committee to our written statement and move on to my conclusion.
To sum up, the situation in Burma is evolving constantly. The government continues to undertake impressive political and economic reforms, yet tremendous challenges remain to be addressed. The Government of Canada will continue to closely monitor developments and adapt our policies accordingly.
My colleagues and I would be happy to respond to any questions you may have about the situation in Burma and Canada's Burma policy.
The Deputy Chair: Thank you for that detailed and informative presentation.
Before I get to the list of senators, I have a question. What about the name of the country? I notice you kept referring it to as Burma. What do the Burmese say when they are dealing with Canada?
Ms. Gregson: Canada did not accept the military junta's decision to change the name to Myanmar, so we continue to refer to the country as ``Burma.''
The Deputy Chair: When we're dealing with officials from Burma, do they protest that or do they accept that?
Ms. Gregson: I haven't heard any protests about the name. I don't know whether Peter wants to add anything.
Peter MacArthur, Director General of South, Southeast Asia and Oceania, Foreign Affairs, Trade and Development Canada: Mr. Chair, the new ambassador from Burma to Canada has asked that Canada reconsider and adopt the name that they prefer, but as Ms. Gregson said, we're not the only government to hold this position pending developments in the country. That is where we stand at the moment.
The Deputy Chair: You refer to other countries. For example, what are the Australians doing; the same as us?
Mr. MacArthur: The United States is similar to us, although when President Obama visited he used them interchangeably: 80 per cent Burma, 20 per cent Myanmar. The Australians, like other countries, are going back and forth and not as clear in terms of which way they will use the nomenclature.
The Deputy Chair: We don't go back and forth?
Ms. Gregson: No, we stick with ``Burma.''
[Translation]
Senator Fortin-Duplessis: I want welcome you all to our committee. It is always interesting to receive representatives from the Department of Foreign Affairs who can provide us with very specific information.
You said that there are two staff members in an embassy — I think the Australian embassy — where the Canadian ambassador is currently residing. Is a Canadian embassy planed soon, or will those two people stay put? In addition, are any other Burmese employees working at the Canadian embassy?
Ms. Gregson: Our two colleagues are currently working at the United Kingdom embassy.
Senator Fortin-Duplessis: So it is the embassy of the United Kingdom?
Ms. Gregson: Yes, Australians are currently providing consular services for us until our new embassy opens. We expect to open our own embassy soon.
Senator Fortin-Duplessis: Burma is currently going through a period of major changes that, we all hope, will yield significant benefits for the population — be it in terms of human rights or considerable improvements in the citizens' quality of life.
Does Canada have any expectations toward Burma in terms of economic development, anti-corruption measures and respect of human rights in order to continue our growing friendship?
[English]
Ms. Gregson: We don't have specific guideposts that we're looking for, but we're continuing to monitor the situation and we continue to raise the situation about respect for human rights and progressive democracy in Burma on every occasion, either at the officials' level or at ministerial level.
Senator Ataullahjan: Last June I made a statement in the Senate on the severe human rights violations faced by religious minorities, specifically the Rohingya Muslims along the Burmese western border. This group is described by the UN as one of the most persecuted minorities in the world. Minister Baird has been outspoken on the situation in Burma, and he is also very outspoken on the fact that the country needs to build on its democratic fundamentals.
Canada did lift sanctions in April of 2012, but we have expressed that we will reimpose sanctions if democratic reforms do not materialize. We're using the 2015 elections as a guideline. How do you see progress on these reforms and also how do you see the climate there currently? It seems the government is either powerless or unwilling to do anything about the violence faced by the Rohingya Muslims. We've seen the images where the security forces just stand by while the Muslims are beaten and sometimes set on fire.
Ms. Gregson: Thank you for your question. Indeed, Canada is very concerned about the ethnic violence that takes place in Burma, and particularly with regard to the Rohingyas. We know that violence broke out in the state of Rakhine in Western Burma and this is largely simmering tension between the ethnic Arakan citizens and the stateless Rohingya residents. They are, as you are probably aware, almost exclusively Muslim.
We have continually condemned the ethnic and sectarian strife that comes up in that state as it has led to the displacement of tens of thousands of people, so this is definitely an area of concern. We have called on all sides to work towards the peaceful resolution of the tension that exists. We are saying that long-term peace and prosperity needs to see dialogue between all of the concerned parties.
You also asked about political progress. We're hoping to see constitutional changes. There are some constitutional changes that should be made in advance of the next elections. In that regard, in August of this year, a constitutional review panel was struck. It's slated to report to Parliament at the end of January 2014, so we will have more information then.
Aung San Suu Kyi's party, the NLD, is pushing for an amendment that would allow her to run for president, and there are other groups who want items changed as well. We'll continue to monitor progress in that regard.
As you may be aware, the constitution as it currently stands prevents Aung San Suu Kyi for running for president, and if those changes are not made, she won't be able to run.
[Translation]
Senator Robichaud: You talked about corruption, and also about poverty in rural regions. Mention was also made of the aid that has been sent to that country to reduce poverty. When corruption is present, those who need help are often the last ones to receive it. Has there been a follow-up to see whether the aid intended for those people has gone where it should have?
[English]
Ms. Gregson: You've raised a very important issue and it's something that concerns us deeply. We need transparent principles and a lack of corruption in order to engage in business. We think the risks are very high. Earlier this week, Burma was ranked 157 out of 177 countries by Transparency International. Having said that, it's a dramatic improvement for them because last year they were number 172 out of 177.
The primary strategy that donors are employing is to not program through the government channels. Instead, we're programming through the UN. DFID, the U.K. aid agency, is programming 60 per cent of its funds through UN agencies and 40 per cent through international and local non-governmental organizations. I don't know whether Jeff wanted to add anything.
Jeff Nankivell, Director General for Development (Asia Pacific), Foreign Affairs, Trade and Development Canada: What Canada has been providing up to date has been mainly in the form of humanitarian assistance for immediate relief needs for affected populations, including in Rakhine state, the Rohingya displaced populations. That funding has been channelled through agencies like the World Food Programme, the UN High Commissioner for Refugees, as well as international NGOs, including the International Committee of the Red Cross and the Red Crescent. We are confident in the mechanisms that those organizations have in place to ensure that the assistance is reaching the intended beneficiaries. In that, we work with other donors including the United States, the U.K., Australia, the Nordic countries and the European Union.
Senator D. Smith: Burma is an incredibly impressive country, but that has more to do with the people and the geography. When you get that rating from Transparency International, it's pretty sad. It's not quite in the North Korea category but, on the other hand, she isn't like Yulia in Ukraine, still in prison.
Maybe it isn't fair to ask this. If there were a bona fide free election and she could run, is there much doubt that the NLD would win? Do you have thoughts on that or do you prefer to keep that to yourself?
Ms. Gregson: I guess like any election it would be folly to try to predict the outcome.
Senator D. Smith: Let me put it this way: Is her support at the grassroots as widespread as people get the sense it is?
Ms. Gregson: My colleagues who have been there more recently would say yes, there is a tremendous amount of grassroots support.
Senator D. Smith: I've met a few people from there. I've been over in that area quite often and I wish the people well because the people I met are nice. I just hope that they'll cross the democratic border at some point in their lifetime, the sooner the better.
Ms. Gregson: We would like to see a situation where the business climate is conducive to engagement by Canadian companies so that this economic situation can improve for Burmese citizens.
Senator D. Smith: I was on a World Bank committee at one point and I was the only Canadian. They took about 15 of us to what used to be Mozambique. They wanted us to see three big projects that got a lot of funding, including a huge dam, a port and a railway system. They honestly felt that it had been structured in a way so that the degree of corruption where government or political people were skimming stuff off was about as minimal as you could ever hope for. How bad do you think it is in Burma? Is that fair to ask?
Ms. Gregson: Well, I think the rating by Transparency International that we referred to earlier speaks for itself.
Senator D. Smith: It was very interesting how these huge projects had been structured and how the World Bank had identified them. If you want to go into some of these countries where it's pretty bad, there are still some ways to minimize it — not eliminate it, but minimize it. Time will tell.
The Deputy Chair: In your presentation you talked about a list of persons and entities Canadians should not be involved with. Is that list public?
Ms. Gregson: I believe so, Mr. Chair, but we will get back to you.
The Deputy Chair: Do you know roughly how many people are listed on it?
Ms. Gregson: It's not a large number. It's not a large list.
The Deputy Chair: If you're a corporation or individual going to Burma, you're supplied with this information ahead of time and these are the people or companies to avoid.
Mr. MacArthur: One of the jobs at our embassy in Rangoon is to ensure Canadian business people are fully advised as to who they should not deal with, including certain Burmese banks that are on the list. This assists them in reducing the risk.
The Deputy Chair: Why are there banks on that list?
Mr. MacArthur: Some banks were involved with the military and in securing other related activities that we would not want to support in terms of engagement by our industry.
The Deputy Chair: What are the sanctions if Canadians violate those restrictions?
Ms. Gregson: We don't have specifics on that, Mr. Chair.
The Deputy Chair: It's advice more than restriction.
Ms. Gregson: That's why we have a senior trade commissioner at our office there. She is on the ground and can monitor the situation. We have trade commissioners around the world so they can provide advice and guidance about the opportunities and also the pitfalls of doing business in the host country.
Senator Oh: Burma was selected to chair next year's ASEAN conference. It means neighbouring countries are stepping up to Burma in terms of trade and economics.
Ms. Gregson: That's how we interpret it as well. In recent meetings with ASEAN heads of mission, I have been told that the situation is really improving. The ASEAN countries are trying to help one another and help Burma move along.
Senator Oh: Have we started accepting immigrants from Burma since we started the full diplomatic relationship?
Ms. Gregson: We don't have an immigration program in Burma, so our office in Thailand would handle any cases. We had a refugee program for Burmese nationals who had left the country and were in the camps along the Thai- Burmese border.
In terms of the regular immigration program, I would have to ask my colleagues at Immigration Canada to give me statistics. I don't have those with me here. I would imagine it would be mostly family reunification at present.
The Deputy Chair: You indicated in your presentation the opportunities that you have identified for Canada, such as infrastructure and aerospace. Who is our biggest competition? China has been there for a long time, but now that the country is opening up more, everyone is rushing in. What are the realistic chances for Canada and who are our biggest competitors?
Ms. Gregson: I think you've correctly identified China as a country that has moved in early. I believe that Australia has also positioned itself to move in.
In terms of advice to Canadian companies and how to take advantage, when you have a country like Burma that is starting to open up for business, that's a great time to start engaging. But we also have to be very careful about the advice we provide in terms of the pitfalls, as I mentioned earlier.
[Translation]
Senator Fortin-Duplessis: Ms. Gregson, you talked about the danger Canadian companies could be facing if they were to do business with Burmese banks. Is there at least one Canadian bank in Burma? During our previous studies and visits to other countries, there was always one Canadian bank on site.
Ms. Gregson: No, there are still no Canadian banks in Burma.
Senator Fortin-Duplessis: Do you know whether other countries such as Australia and the United Kingdom have banks in Burma? Canadian entrepreneurs and industries need banking services.
Mr. MacArthur: Yes, there are some foreign banks — British and Australian banks — on site that are there to serve the interests of foreign and Canadian companies.
Senator Fortin-Duplessis: So it is safer to go to those banks?
Mr. MacArthur: Yes.
Senator Robichaud: In your written presentation, you say that there are business opportunities for Canadian companies in various economic sectors. Are Canadian companies present and, if so, in which sectors?
Mr. MacArthur: There are some interests in the agricultural sector — such as an interest in potassium, for agricultural purposes. There are also some airplanes made in Canada. The country is fairly large, and it needs more modern aircraft to serve its towns and villages. Canadian aerospace companies are already interested and engaged with potential clients, and that is good news.
The situation is the same in the energy sector. Companies are present and active with regard to potential projects, including offshore drilling for gas and oil. We already have some companies such as Husky and Talisman that are present in the region and interested in Burma.
[English]
The Deputy Chair: I will have the last question. We all know things have improved in Burma, but the reality is that it's still a military dictatorship, with tight control over political parties and individuals. Why would Canadian companies get involved there when there are so many other opportunities in the region? You could go to Vietnam or a host of other countries. What answer would the department have for that question?
Ms. Gregson: I will start, and then I'll defer to my colleague.
You're absolutely correct that we have many difficulties with Burma. However, we remain hopeful that this situation can change. As I mentioned earlier, the Transparency International rating has gone up in the past year, so we can hope that there will be further change.
Also, we now have an engagement with the government of Burma that we did not have before. I mentioned the visits of Ministers Baird and Fast and the visit to Canada of the Burmese foreign minister. And with the exchanges that I also mentioned with regard to parliamentarians, there is a dialogue and there is a willingness to listen now that we didn't see before.
Mr. MacArthur: I would like to say in response that this is a very large country that is mineral rich and very strong in oil and gas, but it also has a certain demographic potential like many of these emerging countries. It's a very young country and has been isolated for many years, and we need to be patient in developing that market. For example, the World Bank in October of this year ranked Burma 182 out of 189 in terms of doing business.
One of the reasons we have our trade commissioners on the ground in Burma is to help companies in a very complex, opaque but increasingly interesting market to ensure we have some first-mover advantage over American, Australian and other competition in extractive industries, which is a very big priority for Canada in both mining and oil and gas, including technology applied to help this country develop itself. We have this ``on offer'' in terms of exploration — geosciences, for example — on shore and off shore, both oil and gas. So we want to ensure that we have a foothold there in a large ASEAN market where we are competitive.
Corporate social responsibility is part of the Canadian brand abroad, and it's a very opportune time not only to apply corporate social responsibility but to have our trade commissioners join with our development programs and our Foreign Affairs colleagues, again, in the spirit of the amalgamated new department, to generate some success stories for particular companies that are interested.
Frankly, many are holding back a bit to see how things go between now and 2015 and the election. There is a wait- and-see attitude. Some reconnaissance is occurring and companies are scouting out the market, but the closest we're getting to actual engagement sales would be in oil and gas and aerospace.
The Deputy Chair: I can understand the role of the government in investment. You're trying to move the country in what we and the people there would consider the right direction, but I can understand why companies would hesitate.
It's early days, but by hesitating in many ways, you might lose out to others who are ready to take the much higher risk. There is nothing a government can do about that. Every company has to make its own decision.
Ms. Gregson: That's correct.
The Deputy Chair: Thank you very much for your presentation and your answers to our questions today. We appreciate it very much as we work on our report.
(The committee adjourned.)