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FAAE Committee Report

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The Government of Canada is pleased to respond to 17th report of the House of Commons Standing Committee on Foreign Affairs and International Development (FAAE or “the Committee”) tabled in March 2018, entitled “Focused, Independent and Patient:  Building a World-Class Canadian Development Finance Institution.”

The Government appreciates the work of the Committee and welcomes the consultation process it has undertaken, as well as the ensuing analysis and recommendations. The Government has carefully reviewed the Committee’s report and recommendations and welcomes the opportunity to provide a response to each of the report’s six recommendations.

The Government would like to thank the Committee for its report, for its continued interest in the Development Finance Institute (DFI), and for its work to ensure that Canada’s DFI is aligned with our international assistance priorities and international best practices.


Recommendation 1: The Government of Canada should design its DFI to prioritize the achievement of impactful and sustainable development and to strive to develop innovative solutions to current development challenges, while working to anticipate and adapt to future challenges.

FinDev Canada was created as a distinct commercial corporation, at arm’s length from the Government with its own governance, leadership, investments strategy and corporate policies. FinDev Canada’s strategic priorities are well aligned with the Government’s priorities and policies, and it remains accountable to Parliament, through EDC and the Minister of International Trade, in consultation with the Minister of International Development. FinDev Canada will support other key Government priorities, including the implementation of the 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Change. Importantly, it is aligned with the Feminist International Assistance Policy, including by prioritizing women’s economic empowerment and gender equality as an overarching objective.

FinDev Canada will build on Canada’s enduring expertise and will focus its efforts on areas that will have meaningful impacts. This also includes supporting sustainable economic development through job creation, as well as climate change mitigation and adaptation. It will target high-impact sectors (i.e., green growth, agri-business and financial services) with a focus on small and medium-sized enterprises. It will also focus investments in countries eligible for official development assistance, including those in Sub-Saharan Africa and Latin America and the Caribbean, further increasing Canadian engagement in these regions.

Recommendation 2: The mandate of Canada’s DFI should focus on the core objective of catalyzing private investment for international development; clearly state the institution’s objective of balancing development goals with financial returns; affirm that the DFI is a complement to, not a substitute for, official development assistance and aid agencies; and acknowledge that it must grow to reach profits where it is strong enough to take on an emphasis on development impact with an acceptance of greater financial risk.

It is clear that FinDev Canada’s activities should complement, not replace, international assistance programs, in catalyzing private investment for international development. To support this goal, FinDev Canada will prioritize financial services that have a development objective, respond to the needs of its clients and that cannot be obtained from traditional financial institutions or international assistance programs.

FinDev Canada will also operate as a distinct commercial corporation, at arm’s length from government, with its own investment strategy and incentive structure. This will help attract the right talent and reward innovative investments that add both financial and development value. FinDev Canada can also take advantage of EDC’s back office support, allowing its own staff to focus on the delivery of its mandate and develop its own culture.

Recommendation 3: The DFI’s board of directors should be made up of independent professionals that provide the institution with balanced expertise related to both financial management and international development.

Reflective of Crown corporation best practices, FinDev Canada’s day-to-day operations and transaction decisions are the responsibility of its Board and executives. To emphasize the core goals of FinDev Canada, development impact is embedded in its governance structure. FinDev Canada has a Board, appointed by EDC’s Board, that will include specialized professionals with business and development finance experience. Oversight from this qualified Board allows FinDev Canada to make strategic decisions and engage in business opportunities in line with the broad direction provided by the Government.

FinDev Canada has hired a Managing Director and staff with strong DFI and impact investment experience. The Managing Director will develop and execute FinDev Canada’s mandate and operations, including the identification and structuring of investment projects, which will be submitted to the Board for approval.

To ensure it maximizes its development impact, FinDev Canada has also appointed an external Advisory Council to provide advice to the institution on leading practices for executing its mandate and ensuring strong and clear development impacts.

The Committee will be able to follow FinDev Canada’s performance and impact through its reporting to Parliament and to the public that will be available on its website (

Recommendation 4: The Government of Canada and EDC should allow the new DFI to pursue its mandate in an independent manner, free from requirements to align its operating processes with broader government or corporate policies. At the same time, the DFI should ensure that it operates in a way that is not discordant with Canadian values and interests.

FinDev Canada operates at arm’s length from government, but is accountable to Parliament, through EDC and the Minister of International Trade, with key policy guidance provided by the Minister of International Development, as legislated in the Export Development Act.  FinDev Canada will prioritize investments that are in alignment with Government policies and international assistance priorities, but day-to-day operations and transaction decisions are the responsibility of its Board and executives. This will help to ensure FinDev Canada has the flexibility to make individual investment decisions based on its mandate and general guidance outlined by the Minister of International Trade in the annual Statement of Priorities and Accountabilities.

Recommendation 5: The Government of Canada should provide the DFI with a minimum period of 10 years to demonstrate that it can fulfil its mandate in a financially sustainable manner, and commit to providing additional funding to the institution during this period, as necessary.

In keeping with its arm’s length status from the government, FinDev Canada has not been given a timeline for achieving financial sustainability. This provides FinDev Canada with the flexibility to be patient in order to respond to the needs of private sector clients, while its $300 million capitalization allows for a stable foundation to plan its investments. FinDev Canada has the ability to offer a full range of financial services to support investments either directly or indirectly through intermediaries with other partners, as well as the flexibility to make smaller direct investments. It is also focused on building a diversified portfolio that balances risks and returns, while being impactful, in order to achieve financial self-sustainability within a reasonable period of time.

Finally, FinDev Canada is in the unique position to leverage EDC’s and Global Affairs Canada’s networks and offices around the world in order to build its operations more quickly and efficiently.

Recommendation 6: Canada’s DFI should put in place transparency and accountability mechanisms that match or exceed the standards currently set by DFIs in other countries.

As a subsidiary of a Crown corporation, FinDev Canada is subject to Canada’s robust financial accountability and integrity laws and standards, such as the Financial Administration Act, that require it to report regularly on its activities, including through EDC’s corporate plans and annual reports.

FinDev Canada is building on EDC’s strong corporate social responsibility standards, including due diligence and compliance. Its corporate social responsibility policies and impact framework have been designed to reflect and build on leading practices of international DFIs. In particular, FinDev Canada’s transparency and disclosure standards are designed to ensure that FinDev Canada is also aligned with applicable domestic and international obligations. FinDev Canada will post transactions on its website (, surpassing the transparency practices of many other DFIs. FinDev Canada has also developed an Environmental and Social Policy to mitigate negative human rights, social and environmental risks that was made available publicly on its website.