EVIDENCE

Tuesday, February 21, 1995
[Traduction en français]

0914

The Chairman: Good morning. I'd like to call the meeting to order. As will quickly become evident, I'm losing my voice. I might ask Mr. Volpe to at some point take over the chair if I become totally inaudible. I'm assured by Professor Helleiner that he's lost the use of one ear, so we're both going on one wing. Maybe we should join together and somehow see whether we can fly through this material.

I'm very pleased to have with us this morning an illustrious panel, the first in a series of studies we are doing into the institutions that make up the international financial institutions, with a view to advising the Canadian government prior to the G-7 Summit in Halifax.

0915

We have with us this morning various experts on both financial institutions and the G-7. I will very quickly introduce them without giving you the full effect of their résumés, which have been distributed.

Deputy Minister Gordon Smith, who is the sherpa this year, has not been able to come with us. He has been called away on an emergency.

We do have with us Mr. Peter Boehm, Director of the Economic Summit Coordination Division. We are very please to have Mr. Boehm with us.

We have John Kirton, Professor of Political Science at the University of Toronto. I think for the last 10 years he has run a program studying the process of the summit. Some years ago, when I was teaching at the University of Toronto, I would participate in that when the summit was in Toronto. Professor Kirton has been following the issues of summits extremely closely.

We have also with us Professor Gerry Helleiner, who teaches economics at the University of Toronto. He has had extensive experience in Africa. He prepared a very important report for the Commonwealth some years ago on the structure of third world debt and the need for third world financing. We are very pleased to have Professor Helleiner with us.

[English Translation]

Nous avons aussi avec nous ce matin M. Jacques Bertrand de Développement et Paix. M. Bertrand nous dira ce qu'est Développement et Paix lorsqu'il prendra la parole.

[Traduction en français]

I'm going to ask the speakers to speak in the order in which I introduced them. I would ask them to keep their remarks to 15 minutes. I will then open the floor to questions.

I remind members that this meeting is somewhat shorter than usual because we have the Czech foreign minister here at 11:30 a.m. We will have to adjourn at that time.

I would suggest to the panellists that if, in the answer to a question directed to one of the other panellists, one of you feels you have something to add, just put up your hand, and I will recognize you. I think it is more useful if we have a bit of an interchange amongst you than if everybody just goes back and forth. The members are used to that way of handling it.

Without further ado, I'd like to ask Mr. Boehm to lead off.

Mr. Peter Boehm (Director, Economic Summit Coordination Division, Department of Foreign Affairs and International Trade): Thank you, Chairman. I'd like to help illustrate my presentation with a few slides. You'll see those behind you as I go along. They'll provide a few reference points to the various things I'm talking about in terms of G-7.

In terms of my first slide, I'd just like to indicate to you what the G-7 is not, and perhaps what the G-7 Summit is not, by injecting a little bit of popular culture. This slide shows the table in Naples. The caption reads: Trade? Who Cares about Trade?, and underneath that, Did O.J. Do It?

When leaders get together, they don't necessarily talk about things. It's quite a serious agenda. It's the result of a long period of planning, usually a year. There is a process. I'm going to explain to you just how that works.

In terms of the genesis of the G-7, I think we have to look at the early 1970s, particularly at the collapse, or what was seen as the collapse, of the Bretton Woods monetary system in 1971, when the United States went off the gold standard; the joining of the U.K., Denmark and Ireland to the then European Community in 1973; the oil crisis of 1973-74, sometimes referred to as the OPEC crisis; and the ensuing economic recession in the 1970s.

In this schema, it was decided by two leaders, who coincidentally had been finance ministers, Giscard d'Estaing of France and Helmut Schmidt of Germany, to bring a group together at Rambouillet, just outside Paris, in 1975 to discuss world economic problems and the possibility of coordinating, at the macro-economic level, policies between countries.

Canada was not there. We joined the proceedings the following year at the summit.

0920

In 1977 the European Commission achieved a seat at the table, initially in the role of observer, but now it participates fully at the summit with the president of the commission present and usually with the leader of the country that has the presidency of the European Union at the time. For Halifax this year, that will be France, because the French presidency goes through to the end of June.

In terms of evolution over the years, these summits have become larger. They have attracted a lot of attention; they've attracted a lot of media. The agenda has also expanded beyond the traditional macroeconomic growth/employment sort of discussion to include political issues and security issues. You may recall that in the 1970s there was considerable discussion about terrorism and air hijacking and the like, with the Munich Olympics. These were all issues that came to the fore at summits.

With the increase in discussion and issues at summits, there was also a proportionate increase in preparing them. At the level of senior officials, an entire rubric was developed that included the personal representative of the leader, who became known in G-7 talk as the sherpa. Because the sherpa or personal representative was not always from a foreign ministry or a finance ministry or the inner office of the leader, there was also a system of having a sous-sherpa from the treasury or the department of finance and a sous-sherpa from the appropriate ministry of foreign affairs. This ensured that there was coordination in the preparatory process.

Also at this time, ministers became involved. The ministers who are involved at summits are the ministers of finance and the ministers of foreign affairs, simply because the issues are both economic or financial and political, depending on the agenda that's developed.

New trends over the years--

The Chairman: I'm very sorry to interrupt you, but Mr. Bergeron has brought to my attention the fact that they are not able to follow your slides because they are not in French. It's our practice in the committee to have everything in terms of documents in English and French, and I consider this to be like a document. Therefore, if you have a document of this type that you could distribute in French to accompany the slides, we would ask you to do so. If you don't, I think we would just proceed without the slides.

Mr. Boehm: Okay. I'd be happy to provide documents afterward.

[English translation]
Le président: Préférez-vous que l'on continue sans utiliser les diapositives?

M. Paré (Louis-Hébert): Ont-ils les document ici?

Le président: Non, ils ne les ont pas. C'est cela, le problème. Ils nous proposent de nous distribuer la version française plus tard. Autrement, on peut continuer la présentation orale sans le bénéfice de...

M. Paré: Personnellement, je me sentirais moins victime de discrimination si on procédait simplement avec la traduction et non pas avec des documents qui sont uniquement en anglais.

Le président: Je suis tout à fait d'accord.

[Traduction en français]
So I would ask if you would proceed, then, just with--

Mr. Martin (Esquimalt--Juan de Fuca): Excuse me. While I sympathize with the fact that some of my colleagues here may not follow the slides, perhaps for the majority of us who might find it easier, with their permission and with yours, can we have the slides up, please?

The Chairman: Dr. Martin, it's the practice of the committee that when we receive documents, and I consider this to be in the nature of a document, they must be in both official languages. Mr. Paré's problem is that he's not going to be able to follow in the same way as the other members of the committee.

So I'm just going to have to rule that we'll hear the presentation. We won't have the benefit of the slides, but what I would ask the witnesses is that perhaps afterwards we could have your proposed organizational slides in both official languages. You can distribute them to all the members of the committee and that way we could have them.

Thank you very much. Sorry to interrupt.

0925

Mr. Boehm: I will have them translated. I was only notified of this appearance last night. I apologize to the member for not having a French version.

I mentioned that new trends have developed over the years. There is the question of reforming the summit and the summit process versus institutionalizing it. We are dealing in the summit process with seven countries that are very different. They are industrialized democracies, but they have different political make-ups. In several of the countries there are coalition governments. This structure that I mentioned of sherpa, sous-sherpa and ministerial participation is important for countries that have coalition partners where these particular portfolios are shared within the coalition.

I think it's fair to say that the G-7 is not a formal institution. It is informal, frank and flexible. It does not have a secretariat per se. It is the country that hosts the annual summit that assumes the chair of the preparatory process and assumes a secretariat function for that process and for the summit itself.

In recent years there have been a number of suggestions that the summit should go back to basics, that it should go back to a leaders only concept. Indeed, in the preparations that we are undertaking for Halifax, we and the Prime Minister are trying to maximize the amount of time that leaders have together.

Again, I raise the question of coalition politics. Sometimes it becomes difficult to have leaders only at summits without appropriate ministers present.

I would like to speak briefly about issues and agendas. There is a continuum between summits. At Naples there was an agreement on a number of things. I commend to you the Naples Summit communiqué and the attached chairman's statement. It will be handed out if it hasn't been already.

The French version is an unofficial translation, as it was produced cooperatively between the delegations of France and Canada. I say that because in all G-7 work the lingua franca is English.

At Naples there was a focus on jobs and growth. In the prelude to the summit in July, there was a ministerial meeting in Detroit that looked at the jobs and growth issue. There was also an OECD study on employment and unemployment. As well, work was done by the European Commission under Mr. Delors to study root causes of unemployment, so there was a fairly full discussion of this at Naples.

This is something where the G-7 performs almost exclusively, but there was discussion and action on nuclear safety. This was nuclear safety not so much in the context of warheads and weapons, but of aging nuclear power plants in the former Soviet Union, particularly in Ukraine, and even more particularly in Chernobyl.

Also on international trade, it was recognized that the Uruguay Round had come to a conclusion. However, at that point not all countries had ratified the round, and there was a tremendous push for the easy establishment of the World Trade Organization.

So in the approach to Naples these were Canadian priorities in terms of their being discussed, being addressed in the communiqué and in terms of follow-up work. On nuclear safety, since the Munich summit a few years ago there has been a nuclear safety working group. Canada is currently in the chair.