FAIT Committee Meeting

STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

COMITÉ PERMANENT DES AFFAIRES ÉTRANGÈRES ET DU COMMERCE INTERNATIONAL

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, April 24, 2001

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[English]

The Chair (Mr. Bill Graham (Toronto Centre—Rosedale, Lib.)): Colleagues, I'd like to call this meeting to order. Our guests have to leave at 11 o'clock, so we should get going.

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I want to warmly welcome Mr. Migas and his delegation from the Slovak Republic. He will tell us about the developing situation there.

Mr. President, we'd like to have an opportunity to ask you questions when you're finished.

I hope you will forgive me if I add a personal note. I had the privilege of sitting beside the president last night at dinner, and he told me that his grandfather died in Canada and is buried in northern Canada, and that this will be the first opportunity to visit his grandfather's grave. For him it's a very important personal visit, and I hope that he will meet some Canadian family members that he maybe didn't even know about.

We feel, Mr. President, that it's not just a political visit but that we'd like to welcome you as a member of our family as well. Welcome to you and your delegates.

Mr. Jozef Migas (President, National Council of the Slovak Republic) (Interpretation): Mr. Chairman Graham, ladies and gentlemen, and dear colleagues of this committee, as in our country, the committee of your Parliament on international matters and international trade is for sure a very important committee of the Parliament, which deals with important matters and somehow directs the policy-making in this country.

Allow me to now introduce the members of our Slovak delegation who are participating in this morning's meeting. This is Mr. Jan Rusnak, chairman of the most influential and important parliamentary committee on the coalition side. He is an entrepreneur and engineer. He is a member of the committee for the economy in the Slovak Parliament.

Mr. Cabaj is chairman of the most important opposition club within the Parliament. In fact, this club has the largest number of MPs, 43, I think. He is a member of the public administration committee.

Mr. Mesiarik is chairman of the parliamentary social affairs committee. He is a member of the coalition party, the Party for Civic Understanding.

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Mr. Benkovsky is also a member of the coalition within the Parliament. He is a member of the Party of Democratic Left. He sits on the financial committee.

Mr. László Koteles represents the Party of Hungarian Coalition. He represents the Hungarian minority on the coalition side. You may know that the Party of Hungarian Coalition is part of the governing coalition and shares the power. He represents the Hungarian minority, as well as other minorities, on this delegation.

Also with us is Ambassador Mikolasik. Some of you have already met him. By the way, before his appointment as Ambassador to Canada, he was a member of our Parliament as well.

Mr. Estok is the Director of Protocol of the National Council of the Slovak Republic.

Let me introduce my speech by making some explanatory remarks. Slovakia is quickly passing through the transformation from a totalitarian regime to a very modern, open market economy in which it will be respecting the rule of law and other rules concerning a market economy in an open system.

Slovakia started its modern history on January 1, 1993. In a way this is a young republic, but we have, of course, a good tradition of parliamentary democracy, which is now the system in Slovakia. The current constitution of the Slovak Republic was adopted even before the splitting up of the former federation of Czechoslovakia, and just recently the Slovak Parliament amended the current constitution for the approaching European Union.

The political priorities between 1998-2002, for this term of the Parliament and government, are to become a member of the OECD and so to become a member of the club of the richest countries in the world.

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As you may know, Slovakia became a member of the OECD and our Parliament already ratified the treaty of accession in the fall of 2000. This was also with the great support of Canada. By the way, the accession to the OECD was voted in the Parliament unanimously.

The other political priority is to become a fully fledged member of the European Union. You may know that the summit of the European Union in Helsinki in 1999 decided that Slovakia should receive an official invitation to open negotiations for accession to the European Union. So the current negotiations for accession started in February 20.

Unfortunately, we have some delay, because our immediate neighbours, Poland, the Czech Republic, and Hungary, received this invitation two years ago, before us. So in fact, now we can proudly say that after a tremendous effort Slovakia made in opening and closing chapters with Brussels, we practically minimized or liquidated the delay. We are now practically at the same level as our neighbours.

What is extremely important is that all our political parties represented in the Parliament—there are six parties represented in the Parliament—have in their program support for the European Union integration.

What is also very important is the support of the population for the accession of Slovakia to Europe. More than 70% of Slovak citizens are supporting in official polls the accession of Slovakia. Some 10% are undecided, and less than 20% would hesitate. So in the event of a referendum concerning the accession of Slovakia to the European Union, there are no doubts about the positive outcome.

So the technical negotiations between the European Union and the Slovak Republic will be finalized by 2002. In the year 2003 we should have the ratification process in the parliaments of member states of the European Union. And our internal priority—we are sticking to this political decision—is that Slovakia will be prepared to enter the European Union by January 1, 2004. Of course, it will be the member states and their parliaments that will decide about the membership and final accession of Slovakia into the European Union, but we are convinced the process will be smooth.

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The other political priority of the Slovak Republic is to gain access to the North Atlantic Treaty Organization, NATO. We are quite sorry that for certain reasons we couldn't be in the group of accession last time, when our immediate neighbours, again, entered NATO. We will not speculate now or enter into detail as to why it was so, but the priority is there and our goals, our transformation of the army, the whole system of preparation of Slovakia, are very well developed. We are convinced that by 2002 the situation will be ready for the further enlargement of NATO. Slovakia doesn't have any political problems in becoming a member of NATO, so the transformation of the army itself and the defence system is on course.

One part of the amendment of the constitution was related to this transformation regarding defence. Just recently the Slovak Parliament passed a very important document, the defence strategy of the Slovak Republic, and I can proudly announce that the vast majority of MPs voted for it. We will pass very soon two other important documents regarding the military strategy and the defence strategy of the Slovak Republic.

We are working hard to convince our friends who are already members of NATO to consider the situation and to include Slovakia among those countries that will be invited into the next round of enlargement. For political reasons, for strategic reasons, and for geographic reasons, if you look at the map also, the system is not completed. Clearly there is a hole in central Europe that should be filled, and very quickly.

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So I strongly believe the political position of Canada itself—and also your support, dear colleagues—will be on the side of Slovakia.

Because we are here dealing with you at a committee for foreign affairs, but also for foreign trade, let me open also this area. Neither Canada nor Slovakia should be satisfied with the level of mutual trade and economic cooperation so far. We are really interested in seeing the biggest flow of foreign investment into our Slovak economy, including Canadian investors and Canadian banks.

The Slovak government legislated in the past two years excellent conditions for the inflow of foreign investment—and by the way, there are great advantages and conditions, like tax vacations, for possible investors from abroad. While we are not businessmen as such, we are responsible for policy-making and preparing the ground for such a situation. That's why we are during this visit also meeting important business people and key players on your side, and we are inviting Canadian investors to come in greater numbers and energetically to Slovakia in order to seize the advantage and the momentum before we enter the European Union.

I thank you very much for your kind attention. These were short introductory remarks, and I invite you to put whatever questions you like.

The Chair: Thank you very much, Mr. President. I know my colleagues have some questions, so we'll pass to that. We appreciate your opening remarks.

We'll count on Mr. Rusnak to act as the businessman in your group, I take it.

Mr. Jozef Migas (Interpretation): He is really on both sides, a politician and businessman.

The Chair: Good. We will send the politics to you and the business to him.

Mr. Solberg.

Mr. Monte Solberg (Medicine Hat, Canadian Alliance): Thank you, Mr. Chairman.

First of all, Mr. President, welcome to you and your delegation on behalf of the official opposition. It's a pleasure to have you here today.

My first question has to do with your entry into the European Union. In Canada recently we've had, of course, the Summit of the Americas, and pretty obviously there's a divide in Canada between the political left and the rest of the country about the advisability of entering into a hemispheric free trade agreement.

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I wonder if you could go into some detail about how you were able to achieve a consensus amongst the entire spectrum of political parties to agree to move toward the European Union.

Mr. Jozef Migas (Interpretation): I will be very concrete.

As far as Parliament is concerned, and also the government, of course, we had open discussions about the European Union in the second term of our recent history, which started in 1998. Already in December, less than two months after the election, we had discussed the political matters as far as the European Union was concerned.

Parliament adopted the political declaration concerning three topics: OECD accession, NATO, and European Union accession. It was adopted by a vast majority of MPs.

As far as the European Union accession is concerned, even the previous government and the previous Parliament between 1994 and 1998 had joining Europe as a priority. We created in 1998 a new committee that met our needs, the Committee for European Integration.

This political consensus of various representatives of our political life is certainly helpful, and reflects the position of the whole population, which, as I previously mentioned, supports the accession.

We may, of course, discuss the procedural matters and the modalities—how to deal with this accession process within political parties—but in fact the common denominator of the accession itself has been there every time, and it helps.

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So the goals and political programs of parties represented in Parliament have European integration in their electorate programs.

Mr. Monte Solberg: Is it the case then that even the democratic left completely supports the idea of the European Union?

Mr. Jozef Migas (Interpretation): My dear honourable colleague, I'm not only the chairman of the Slovak Parliament, I'm also the chairman of this Party of Democratic Left, so-called.

In Europe, out of 15 countries, you know certainly that 12 governments are being led by social democratic regimes or parties, and my party is certainly conceived and perceived as such. We are, by the way, members of the so-called Socialist International.

So the left is not the bricks of the integration. On the contrary, it is the mortar.

The Chair: Good question, Mr. Solberg.

Mr. Keyes.

Mr. Stan Keyes (Hamilton West, Lib.): Thank you, Mr. Chairman.

Being of Polish heritage—my father came to Canada from Poland and many of the words you use are very similar—I would like to say dzien dobry, welcome.

Trade is a very interesting subject for me. It brings our countries together and promotes our ideas in very many ways, but it can also cause sometimes irritants between countries. We won't discuss any specifics of problems between our countries, but how do you see the overall situation between Canada and the Slovak Republic on economic policy?

And just as a quick addition—I won't ask a second question, Mr. Chairman—are there any difficulties that could result between our countries that may be the result of trade situations between you and European member countries?

Mr. Jozef Migas (Interpretation): You may know that our economy, which is a developed economy.... You know that previously Czechoslovakia was one of the best partners in central Europe as far as economy is concerned. We have started the restructuralization of our business, trade, and economic matters since 1990, just after this velvet revolution.

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It is important that 70% of our export is directed to member states of the European Union already. So the trade linkages between Slovakia and the European Union are there, and this is the reality. Our main trade partners are Germany, Austria, France, and obviously the Czech Republic.

So there is no tension between our situation in Europe and our connection with the European Union, and there are no open questions with Canada either. We are looking forward to developing more the side of Slovak-Canadian commercial and trade exchange.

Mr. Stan Keyes: You mentioned 70% trade with the EU. What's the percentage of trade with Canada and how do you see economic relations developing in the future?

Mr. Jozef Migas (Interpretation): Unfortunately, Canadian investment does represent only 1% of foreign inflow into our economy, and Canada, as a country, doesn't enter even the first ten countries as far as the amount of money invested is concerned.

It certainly doesn't reflect the possibilities of Canadian force and economic position in the world as a G7 country, and we hope it will be improved.

Mr. Stan Keyes: Well, that may spur some other questions from my colleagues.

Mr. Chair, thank you.

The Chair: Thank you.

[Translation]

Mr. Rocheleau.

Mr. Yves Rocheleau (Trois-Rivières, BQ): Thank you, Mr. Chairman.

Welcome, sir, to you and to all the members of the Slovakian delegation. I admit that for me, a member of the Bloc Québécois, your presence here today holds a very special meaning.

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As you are no doubt aware, the Bloc Québécois, like its counterpart the Parti québécois which is currently in power in Quebec, has a major objective, namely to one today achieve sovereignty for Quebec, just as you did for your country in 1998.

I hope that one day, a delegation such as this will travel to Quebec's capital city to extend warm greetings and that we too have an opportunity to return the favour.

Mr. Chairman, to turn things around a little, I'd like to ask the delegates a question about Slovakia, as we seem to be speaking a great deal about Canada.

You state the following in the last paragraph of page 3 of your submission:

Privatization in utility and banking services remains a priority of the Ministries of the Economy and Finance for the year 2001, despite the controversies.

Have the International Monetary Fund and the World Bank been a party to the debate further to the discussions that took place at the Summit of the Americas and the observation - one that is quite valid in my opinion - that increasingly these two giants are intervening on behalf of international monetary interests to the detriment of public or collective interests? Can the same be said of your situation, particularly in light of your statement “despite the controversies”?

Mr. Josef Migas (Interpretation): The Slovakian delegation did not have a document to present to the committee at today's meeting. Therefore, the text you have was probably drafted by your own parliamentary research assistants. Of course, if you have some figures, we can discuss them.

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Privatizing the banking sector is also an economic priority for the government. During the socialist era, all banks were State owned. It is impossible to function with State-owned banks and a State-run system in a global market economy.

As part of the privatization process, the insurance bank, one of Slovakia's largest banks, has already been privatized. The process has also involved advisers who are experts on world banks. We sought assistance from advisers for Deutsche Bank AG. The particular bank in question was privatized by the Erste Bank, a large Austrian bank.

I haven't yet mentioned it, but privatization initiatives have been carried out in accordance with the provisions of privatization legislation which has been enacted. The bank in question was privatized in accordance with this legislation which was enacted in Slovakia and pursuant to the attendant regulations. Nevertheless...

May we add something further?

[English]

Mr. Jan Rusnak (Member, National Council of the Slovak Republic) (Interpretation): Good morning, ladies and gentlemen. It is really a pity that our time is limited. But let me say some words, commencing with subjects we have dealt with previously.

The process of privatization in Slovakia, in the Slovak Republic, is in its final stage. The amount of goods, enterprises, banks, and everything that is offered to the process of privatization will be $5.2 billion U.S. There are three other major banks being proposed for the process of privatization that have Slovak names. I will not name them.

This year the process of privatization of the main state gas company will be privatized.

I would like to say some words also to Mr. Keyes, who is speaking Polish. We notice it with pleasure.

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As far as the economic questions are concerned, we do not divide ourselves in Slovakia as being part of the right or the left parties, or a coalition or opposition. We are preparing conditions and assets for privatization in a way that would be acceptable for everybody and would be successful. They are measures that are allowing investors to have tax vacations. There is really a very developed simplification of investing in Slovakia as far as the bureaucratic process is concerned.

You may be aware that Slovak manpower is highly educated and prepared. There are really very good conditions as far as the region is concerned in central Europe. Our productive assets and factories are in very good condition. We need Canadian know-how and, of course, finances.

I would like to recall our meeting with the Minister of Foreign Trade, Pierre Pettigrew, just yesterday. We discussed this question very closely with him. He came for an official visit last September in Slovakia. He certainly promised that he will strongly support Canadian export and Canadian investment to Slovakia. We are looking forward to that.

The Chair: I understand you have another meeting at ll:15 a.m. Could we keep you here until ll:10?

Mr. Jozef Migas (Interpretation): Yes, please feel free to ask maybe two questions. We can handle it.

The Chair: Good.

Madam Marleau is next on my list. I don't know whether we'll get to anyone else.

[Translation]

Ms. Diane Marleau (Sudbury, Lib.): Thank you and welcome to Canada, our beautiful country in which every person, whether living in Ontario or Quebec, has a chance to flourish and grow.

[English]

I gathered from our chairman's presentation at the beginning that your grandfather is buried here somewhere. May I ask where?

Mr. Jozef Migas: Thunder Bay.

Ms. Diane Marleau: I say that because I represent a riding in northern Ontario—it's not Thunder Bay—and I was born in a place about 300 or 400 miles north of there where large numbers of refugees settled after the war.

I'm very curious to know how you do regional development and how you do outreach to the different regions of your country. I represent one of those ridings and it's very important to me.

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Mr. Tibor Cabaj (Member, National Council of the Slovak Republic) (Interpretation): Mr. Chairman, ladies and gentlemen, let me say some words concerning regional development.

In 1990 already, having had two republics, the Slovak Republic and Czech Republic, in this federation, we were able to change the law and create new structures at the regional level. I was a member of the previous Parliament from 1994 to 1995, when we were the governing party. We already shifted the power in the state structures from the capital to eight created regions. Slovakia has 5.4 million inhabitants, and so each of these regions may represent more than 700,000 inhabitants. But we didn't succeed in accompanying this reform by the creation of self-governing, local government that would be allowed to govern in reality, including some money inflow from the tax system to really gérer the region properly, not depending on the central power.

Just recently we have adopted in Slovakia the very long-term, fifteen-year plan of development for these eight regions. The asset was created, and the question is how to develop these regions and define also the interregional relationship and mutual help, because they are not fully balanced or developed in the same way.

We are about to adopt in May of this year—and certainly it will be completed in the first half of this year—this second step of decentralization, including the finance inflow and rights and duties of these regions, not only at the state level but also at the self-governance level. As a parliament, we do create the legal framework for this, and the election of representatives to these new regions will be held this fall.

[Translation]

The Chair: Mr. Patry.

Mr. Bernard Patry (Pierrefonds—Dollard, Lib.): I have a very brief question. Thank you very much, Mr. Chairman.

[English]

Thank you to our guests.

I noticed that Slovakia applied for observer status in La Francophonie, an organization of very specific importance to Canada.

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What is the position of French in Slovakia now? Is it studied at school and at the university level? And what are the Slovak aspirations for the observer status in La Francophonie?

Mr. H.E. Miroslav Mikolasik (Slovak Republic Ambassador to Canada): We have agreed that the ambassador will answer this.

[Translation]

I'll speak to you in French, just to prove to you that Slovaks speak French.

I accompanied the Slovakian Minister of Culture when Ms. Marleau kindly received us and for the first time ever, we talked about the possibility of joining La Francophonie and of being granted observer status. We missed by a mere three weeks the deadline for applying for...

An hon. Member: Applying for status.

Mr. H.E. Miroslav Mikolasik: That's right. This time, however, Canada is heading this organization. Our application was duly forwarded and received. In fact, Canada has been very supportive of Slovakia's request.

As for your question, French has a lengthy tradition in Slovakia as a diplomatic and cultural language, as the language of the great European culture. Between the two world wars, the first Czech Republic had much in common with France and La Francophonie, given that it was the only democracy in Central Europe. We won't talk about our neighbours, either Russia or Germany. During this period of time, French culture and language developed extensively through student exchanges, lycées and a range of cultural activities.

I'll make it quick because we are pressed for time, but in spite of many societal changes, French is still taught in lycées and in primary schools.

We are, after all, a relatively small nation of approximately 5 million, on par with the Scots and the Danes, and ensuring that our students speak a range of languages is important. English is also important, but it ranks second, along with German. French is the language taught in schools. There are a total of five lycées in Slovakia where all subjects are taught in French, with the exception of the Slovakian language and Slovakian literature. Several towns in Slovakia are also home to a branch of the Alliance Française.

Mr. Bernard Patry: Thank you.

The Chair: Thank you very much. That was very interesting.

Very quickly, Mr. Paradis.

Mr. Denis Paradis (Brome—Missisquoi, Lib.): Very quickly, Mr. Chairman, I'd like to welcome the Slovakian delegation to Canada, an extraordinary country.

I have two questions, or rather two points that I would like to raise. First, could you tell us a little about your country's legal system? What legal system do you use in your country? Is the judiciary independent?

My second question concerns the housing sector. Earlier, mention was made of the privatization of your country's banks. Interest rates are generally high. Is there hope for a person who is looking to buy his or her first home?

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Here in Canada, when a person wants to purchase a home for the first time, the Government of Canada can step in to provide assistance in the form of a guarantee. Do you have a similar system in place in your country?

Mr. Jozef Migas (Interpretation): Regarding the cost of housing and other broadly related issues, you are right. After 1980, the housing industry in Slovakia went into a slump, but in the last two years, the sector has experienced a rebirth of sorts and more office buildings and private homes are now being built. Slovaks like to build their own homes and banks arrange mortgages for them at very affordable rates.

The Chair: Thank you very much.

[English]

I want to just add that I made some inquiries about Canada's position on NATO. I understand the government's position is that we welcome the expansion of NATO, but we have not at this point determined any specific candidates to support. So we think your trip, in that case, is very opportune, Mr. President, and you have sensitized our parliamentarians to the wish of Slovakia.

I read a very interesting article in the Herald Tribune last week about your country—you might have seen that—which was very positive. We wish you all the best in your transformation. We hope that your trip here to Canada is both a political and personal success. Thank you very much for coming.

We're adjourned until Thursday, colleagues. On Thursday morning we're going to talk about the caucuses. We're going to do our last meeting on that.

[Translation]

You were there, Mr. Rocheleau, as was Ms. Marleau. This will be our last meeting regarding the caucuses.