Bill C-31 passes third reading in Senate

(December 6, 2001) Senator Setlakwe comments at third reading of Bill C-31. Bill C-31 is read third time and passed.

1st Session, 37th Parliament,
Volume 139, Issue 78
Export Development Act
Bill to Amend-Third Reading

On the Order:

Resuming debate on the motion of the Hon. Senator Robichaud, P.C., seconded by the Hon. Senator Ferretti Barth, for the third reading of Bill C-31, to amend the Export Development Act and to make consequential amendments to other Acts.

The Hon. Raymond C. Setlakwe: Honourable senators, I am happy to address my comments at third reading of Bill C-31, to amend the Export Development Act.

This bill is the result of a legislative review called for in 1993. This review began in 1998, and it is only now, with the bill about to be adopted, that this exercise is coming to an end.

Canada has long been a trading nation. If we take into account our population, we are the most prolific merchants in the industrialized world. Our prosperity depends, in large part, on our success in foreign markets. We are lucky to have a business sector and workforce that have adapted quickly and effectively to the new requirements of these markets.


As the legislative review made abundantly clear, the EDC is a key player in responding to these demands. The business that the EDC supports accounts for approximately 4 per cent of our gross domestic support. This is a remarkable role for a single firm. When we propose to alter the laws that govern its operations, we should remember that it is not only the EDC that will feel the effects of these actions, but also the thousands of Canadian firms that are enabled to take their industry to the world through EDC. It is this broader community of interests that is at stake.

I will confine my remarks to a few salient issues that have been raised concerning this bill, particularly those issues that honourable senators discussed during the review of the bill in committee.

The bill’s critics have alleged that the discretion given to the EDC’s board to implement the environmental obligation means that the EDC will simply ignore the obligation when it suits their convenience. They also allege that there will be no public or political accountability for the EDC either in developing its environmental directive or in taking decisions under it.

Let me be very clear on this point. This bill creates a binding legal obligation on the board of the EDC. It will have the effect of law; it will be the law.


At this point, I should like to refer to a question that Senator Angus put to Ms Adams during the committee hearings. Senator Angus said:

You have a lot of items on your ship lift. Basically your main focus is the environment in other countries and human rights, is that right? I do not think you challenge the EDC generally. Do you think there is a good reason to have an EDC in Canada?

Ms Adams: No, I do challenge that. I do not think that there is a legitimate public policy purpose for EDC to exist.

I think that speaks for itself.


Honourable senators, some of you have already commented that Bill C-31 would remove the EDC’s environmental directive from the requirements of the Statutory Instruments Act. This legislation establishes an obligation for the legislative examination and prior publication of government regulations. Most of these follow this procedure, although there are exemptions in certain cases. In this case, exemption is required because of the objective served by the EDC’s environmental directive and the area in which that directive will apply. This is not a national regulation. It does not, in fact, apply to other projects carried out in Canada. Its application is exclusively extra-territorial. This gives rise to the first question. The directive will be in effect in more than 150 countries in which the Corporation carries out activities. Generally, countries tend to avoid extra-territorial application of their legislation, unless special bilateral agreements have been signed. By exempting this directive from the requirements of the Statutory Instruments Act, the government is in line with general foreign policy practice.


This is clearly not an unfettered discretion. Nor is this work going on behind closed doors. EDC has undertaken one of the most vigorous public consultation programs of any public agency in Canada. It has gone out proactively to hundreds of organizations, individuals and businesses for input on its environmental and disclosure policies. It has conducted consultations across Canada and employed leading consulting firms to assist with the process. It has published the results of these consultations for further public reflection and input.

These are not ad hoc measures. On the contrary, public consultation has become the foundation for changing EDC’s policies. It has helped it to develop one of the most comprehensive disclosure policies of any export credit agency in the world. In due course, EDC’s new policies will be published in their final form.

Two years thereafter, the Auditor General will conduct a second audit of EDC’s revised environmental directive at the direct request of the Minister of International Trade. The report of that audit will be made public and tabled in the House of Commons and in this chamber and open for all to see. The government is confident that the Auditor General’s ongoing oversight will ensure both excellence in the directive’s design and diligence in its implementation.

Canada is not alone in taking this approach. I want to stress clearly that not one of the 30 OECD nations uses a domestic deregulation for the environmental review of export credits. It has been government policy for over 10 years that Canada’s approach to this issue should match that of our international competitors. Exempting the directive from the requirements of the Statutory Instruments Act also respects this policy.

I mentioned that EDC’s environmental directive could be applied in over 150 countries. Environmental assessment science is developing rapidly, as are the legal requirements for it in different countries. In addition, the environmental policies of other international institutions are also changing rapidly. This is a highly dynamic field. EDC will have to keep pace with these developments and needs the ability to modify its procedures and standards quickly. I would challenge the critics to identify a single Canadian regulation that meets such broad demands. Exempting the directive from the act will permit its rapid adjustment to changing competitive and technical circumstances.

Finally, the exemption from the Statutory Instruments Act in no way removes Parliament’s authority to examine the directive. As I have already noted, the Minister of International Trade has asked the Auditor General, an officer of the House of Commons, to conduct another environmental audit in two years, and present her findings to Parliament. It is fully within our powers to review those findings, to call witnesses and to make whatever recommendations we wish.


Honourable senators, when we looked at Bill C-31 in committee, some of you said that one provision in the act criminalized freedom of expression, by stipulating that use of the corporation’s acronym without written authorization constitutes a criminal offence. I find that a bit far-fetched. The standard rules of legal interpretation lead us to read the text of a law in light of the objective and context of that law. The provision in question is clearly intended to prevent misuse of the corporation’s name for commercial purposes, and is similar to a provision in the Business Development Bank of Canada Act, one that has moreover been reinforced in a recent amendment to that act, I might add.


This provision has been in force for the Business Development Bank since 1995, and there is absolutely no evidence of its abuse. There are analogous provisions in other federal statutes to prevent improper uses of the names of banks and insurance companies. As a criminal provision its enforcement would lie with the Attorney General of Canada. To suggest that the Attorney General would use this clause to muzzle EDC’s critics is simply absurd.

It was also suggested that if the provision’s intent is benign, it should be amended to clarify this. With respect, the phrase is well designed as it stands. The generality of its reference to business purposes is necessary to cover the broad range of transactions in which EDC engages. These include loans, various forms of insurance, financial guarantees, bid and performance bonds, but would also include such things as the issuance of letters of interest. Hence, the need for the general formulation that we find in this clause.


Honourable senators, in Bill C-31, the government has included some very considered provisions to promote improvement of the operation of the Export

Development Corporation. It is a great friend of Canadian exports. I urge you to support its passage.

Motion agreed to and bill read third time and passed.


Full transcripts are available on the Canadian government’s Web site at:

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