CANADA ECONOMICS
AVIATION
Innovation, Science and Economic Development Canada. June 8, 2018. Minister Bains' statement on Airbus/Bombardier strategic partnership. Statement
Ottawa, ON — The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development, made the following statement on the announcement by Bombardier and Airbus that their strategic partnership in the C Series program is proceeding.
"I am pleased to welcome Airbus's investment in Canada.
"The investment was subject to review and approval under the Investment Canada Act to ensure its overall economic benefit to Canada.
"I have concluded my review under the Act and am satisfied that this investment will benefit Canadians by growing our aerospace sector and creating good jobs.
"Canadians will be pleased to know that Airbus has committed to maintaining Mirabel as the primary industrial site for the C Series program, while prioritizing Mirabel for future growth investments. This is fantastic news for the talented women and men working in that important aerospace hub.
"The partnership will leverage Airbus's $82-billion global supply chain, which will provide significant opportunities for Canadian aerospace companies.
"In addition, Canada will be recognized as the fifth home country for Airbus, the first such outside of Europe, symbolizing Airbus's future commitment to Canada.
"This is a good day for Canada's aerospace sector."
FULL DOCUMENT: https://www.canada.ca/en/innovation-science-economic-development/news/2018/06/minister-bains-statement-on-airbusbombardier-strategic-partnership.html
BOMBARDIER. The Globe and Mail. 11 Jun 2018. A South African law firm questions payments made to Bombardier for hundreds of locomotives. South African law firm report says ‘vast and peculiar’ advances made for locomotives
GEOFFREY YORK
An investigation by a South African law firm has found that a state-owned freight company made “vast and peculiar” payments to Bombardier Inc. and a Chinese supplier for hundreds of locomotives that still have not been delivered.
The advance payments, which were later questioned by the company’s auditors, were cited by the law firm as examples of apparent “impropriety” and illegality in the locomotive contracts. It says the government should consider suspending the contracts.
Bombardier says it cannot comment on specific details in the report, but it says the report did not find any wrongdoing by Bombardier. So far it has delivered 13 of the 240 locomotives that were required under the four-year-old contract.
The freight monopoly, Transnet, awarded a US$1.2-billion contract to Bombardier in 2014 to produce 240 electric locomotives within four years. The contract was supported by US$450-million in financing from the Canadian government’s export bank, Export Development Canada.
Shelley Maclean, an EDC spokeswoman, would not comment on the law firm’s report, but she said EDC is now “actively reviewing” its financing agreement with Transnet.
By March of last year, Bombardier had been paid 38 per cent of the contract amount (about US$450-million) but had not delivered a single locomotive, according to an audit obtained by The Globe and Mail.
The audit by KPMG is an annex to a confidential report by the Werksmans law firm, which was retained by Transnet to investigate allegations of corruption and waste in the controversial US$5-billion locomotive project, the biggest in South African history. The project was divided among Bombardier, General Electric, China North Rail and China South Rail.
South African media have reported that the two Chinese suppliers made payments to littleknown consulting firms that had close connections to the Gupta brothers, business partners of the son of former president Jacob Zuma, who resigned in February as corruption allegations swirled around him. The Guptas, now the targets of arrest warrants and police raids, were central players in South Africa’s biggest postapartheid corruption scandal.
The Guptas gained heavy influence over the management of Transnet in the years leading up to the locomotive contract. An official investigation by South Africa’s anti-corruption ombudsperson found evidence of dozens of phone calls between the Guptas and Transnet’s chief executive officer, who presided over the locomotive deal.
The Guptas also obtained US$41-million in financing from EDC to purchase a luxury jet from Bombardier, in a sale that Bombardier approved just weeks before the locomotive contract was announced. EDC cancelled the airplane financing deal this year and is now embroiled in a court case against the Guptas to recover the jet.
When the locomotive project was announced in early 2014, it was nearly 40 per cent more expensive than the amount estimated by Transnet’s own experts just a few months earlier.
“There is support for a conclusion that the transaction is cloaked in corrupt and reckless activity,” the Werksmans report says in its conclusion about the US$5-billion project.
“An appropriately empowered judicial inquiry is required to be instigated by Transnet to properly investigate the various suggestions of bribery and similar unlawful conduct.”
The Werksmans report has not been officially released, but The Globe has obtained a copy of the report and the nearly 1,600 pages of documents in its annexes.
The Werksmans report calls for a police investigation to find the reasons for the mysterious increase in the project’s cost and to help recover any unlawful payments.
Much of the cost increase “appears inexplicable, unreasonable and excessive,” the report says. It cited “various instances of suspicious conduct suggesting at the very least wasteful expenditure or a wilful disregard for the interest of Transnet and a cavalier waste of vast sums of money.”
The Werksmans report and the KPMG audit found that the advance payments to Bombardier over the past four years were larger than the original contract had specified. Bombardier’s contract had authorized an advance payment of 27 per cent, compared with the 38-per-cent advance payment that it had received by March of last year, the reports said.
Among the payments questioned by the Werksmans investigators was a payment of about US$60-million to Bombardier to compensate it for relocating its locomotive assembly to a Transnet factory in Durban, instead of the earlier planned Transnet factory in Pretoria. A similar payment of about US$60-million was made to China North Rail (CNR) for its own relocation to Durban.
These payments were never verified or approved by Transnet’s auditors, the Werksmans report says. An official of CNR had earlier suggested that the relocation cost would be less than US$1-million, the report said.
The audit by KPMG last year warned that Bombardier might need a further payment of about US$200-million because of its “financial difficulty” with the relocation to Durban.
Another Transnet auditor told Werksmans last year that it had identified several “red-flag” items in the relocation cost estimates, supporting the suggestion that the estimates were “not sound.” Minority shareholders of CNR told Werksmans that the Chinese company had “significantly misrepresented” the cost of the relocation.
Olivier Marcil, vice-president of external relations at Bombardier, says the company will not comment on the Werksmans investigation because Transnet has not publicly released the report. “Bombardier was not contacted by Werksmans nor asked by Transnet to participate in any manner,” he told The Globe.
“Based on what has been reported in the media, we understand that the report does not suggest any wrongdoing by Bombardier,” Mr. Marcil said. “Nevertheless, Bombardier stands ready to assist with any formal inquiry into the project, and we stand behind the integrity of our work.”
The rising cost of the locomotive project was “aligned with our client’s own choices and requirements,” he said.
“The advanced payment structure is a standard practice across the industry, especially in contracts of this type that require critical investments in human capital, tooling and infrastructure from the manufacturer.”
Bombardier delivered its first locomotive under the contract last December and today has delivered 13 of the planned 240 locomotives, with another 15 in production, the company says.
South Africa’s new president, Cyril Ramaphosa, who replaced Mr. Zuma, has vowed a clean-up of corruption in state-owned companies. His minister of public enterprises, Pravin Gordhan, replaced the entire board of directors of Transnet for failing to act on the Werksmans report.
Police investigators and criminal prosecutors are reviewing the evidence from the Werksmans report and other forensic reports on state-owned companies, Mr. Gordhan said. “At Transnet, governance structures were repurposed to enable corruption and rent-seeking,” he said.
In the locomotive project, the corruption allegations have largely focused on China South Rail, one of the two Chinese manufacturers (now merged) that won contracts. China South Rail paid about US$320-million in “consulting fees” to a Guptacontrolled company in Hong Kong to help it win the locomotive contract, according to leaked e-mails reported in South African media.
The Werksmans report found a copy of the consulting contract between a China South Rail affiliate and the Gupta-linked company, signed by a senior Gupta business partner. It concluded that there was enough evidence of bribery in the China South Rail contract to warrant a full investigation.
INTERNATIONAL TRADE
Global Affairs Canada. June 11, 2018. Ministers from Global Affairs Canada to attend Conférence de Montréal
Ottawa, Ontario - Canada’s progressive trade agenda promotes more women entrepreneurs gaining access to every facet of our economy. It also means championing gender equality within trade agreements to ensure that economic growth benefits everyone and empowers women and girls to help build a more inclusive, peaceful and prosperous world.
The Honourable François-Philippe Champagne, Minister of International Trade, and the Honourable Marie-Claude Bibeau, Minister of International Development and La Francophonie, today announced that they will participate in the 24th edition of the Conférence de Montréal in Montréal, Québec, on June 12 and 13, 2018.
While at the Conférence, Minister Champagne will deliver remarks and co-host a panel discussion under the theme “Supporting the Economic Empowerment and International Reach of Women Entrepreneurs”. This panel will provide an opportunity to promote Canada’s progressive agenda and foster a discussion on the challenges faced by women entrepreneurs in Canada and around the world, as well as strategies that can be adopted to support their efforts to participate in global commerce.
Minister Bibeau will participate in a roundtable discussion entitled Africa: Paving the Way for an Era of Growth. This discussion will focus on empowering youth, particularly adolescent girls, in Africa to pursue successful entrepreneurial opportunities.
Quotes
“Our government is a proud partner of the Conférence de Montréal. The Conférence provides a unique platform to advance discussions and policies on the most important economic challenges of today. Too many women still face hurdles when trying to reap the benefits of trade and I look forward to using this opportunity to further advance our progressive trade agenda. Canada’s vision in the areas of gender equality and women’s economic empowerment will contribute to Canada’s economic growth and competitiveness.”
- François-Philippe Champagne, Minister of International Trade
“With the conclusion of the G7 meetings last week where investing in growth that works for everyone and gender equality were priority themes, I look forward to continuing to move the needle and bring about real change for women and girls globally. Our government is committed to bringing about solutions to ensure the full and equal participation of women and adolescent girls in decisions that impact their interests, life and future.”
- Marie-Claude Bibeau, Minister of International Development and La Francophonie
Quick facts
- Held since 1995, the Conférence de Montreal is the largest, oldest and most well-established event organized by the International Economic Forum of the Americas (IEFA).
- The Government of Canada has been a key partner of the Conférence de Montreal since 1996.
- This year’s conference theme is A New Globalisation: Managing Uncertainty.
Conférence de Montréal: http://forum-americas.org/montreal/home/
Canada and the Americas: http://www.international.gc.ca/world-monde/international_relations-relations_internationales/latin_america-amerique_latine/index.aspx?lang=eng
Global Affairs Canada. June 11, 2018. Minister Champagne announces $2.7 million for 35 industry associations to diversify into new markets
Ottawa, Ontario - Canadian industry associations play a key role in fostering international business development for thousands of small and medium-sized enterprises, which are the backbone of Canada’s economy and the engine for job creation. These associations benefit from Global Affairs Canada’s Global Opportunities for Associations (GOA) program, which funds international business development initiatives.
The Honourable François-Philippe Champagne, Minister of International Trade, today announced that the Government of Canada is providing $2.7 million to 35 industry associations to share the costs and risks of more than 140 separate international business development activities.
Through GOA, the Government of Canada encourages associations to look beyond Canada’s borders for new opportunities. As a pillar of Global Affairs Canada’s Global Markets Support Program, GOA provides contribution funding to support national associations undertaking new or expanded international business development activities.
GOA supports three types of international business development initiatives:
- direct contacts, such as trade shows, meetings, matchmaking, seminars, incoming visits and export training
- marketing tools, such as website development that targets foreign customers and other materials that promote trade opportunities
- research tools, such as market research studies, market intelligence reports and updates to multi-year international business development strategies for specific industries
Quotes
“Associations play important roles for their members in pursuing global market opportunities and coordinating support. Funding key projects will help their membership access new contacts, secure new clients and gain market intelligence around the globe. We are committed to diversifying our markets and to giving more Canadian workers the competitive advantage they need to compete and win in those markets.”
- François-Philippe Champagne, Minister of International Trade
Quick facts
- GOA is supporting the Canadian Association of Public Schools - International to enable it to travel to events in Asia, Europe and Latin America to promote educational opportunities in Canada for foreign students.
- GOA is supporting the Information Technology Association of Canada to enable it to undertake a business mission to Ireland led by female entrepreneurs.
- GOA is supporting the Art Dealers Association of Canada to enable it to bring U.S. buyers to Canada to meet with stakeholders in the visual arts market and to showcase Canadian art galleries.
- GOA is supporting the Canadian Hydrogen and Fuel Cell Association to enable it to attend the 22nd World Hydrogen Energy Conference, in Brazil, as well as events in Germany, Japan, South Korea and the United States.
- GOA is supporting the Canadian Dam Association to enable it to promote awareness of Canadian technical expertise at events in Austria, Brazil, India and sub-Saharan Africa.
Backgrounder
Global Opportunities for Associations (GOA) provides contribution funding to support national associations undertaking new or expanded international business development activities, in strategic markets and sectors, for the benefit of an entire industry (member and non-member firms). GOA shares the risks and costs of activities, thereby providing an incentive for associations and their members to be more ambitious in entering global markets.
Annual non-repayable contributions range from a minimum of $20,000 to a maximum of $250,000 and must be used for activities and related expenditures taking place between April 1 and March 31 of the following year. GOA provides matching funds of up to 50% of eligible expenses.
2018 to 2019 fiscal year Global Opportunities for Associations recipients by sector
Aerospace (sector total: $141,025)
- Aerospace Industries Association of Canada: $99,575
- Air Transport Association of Canada: $41,450
Automotive ($84,620)
- Automotive Parts Manufacturers’ Association: $73,000
- Canadian Association of Mold Makers: $11,620
Clean technology ($413,869)
- Canadian Hydrogen and Fuel Cell Association: $228,400
- Écotech Québec: $75,750
- Marine Renewables Canada: $96,025
- WaterTAP: $13,694
Creative industries ($371,010)
- Art Dealers Association of Canada: $22,500
- Canadian Association for the Advancement of Music and the Arts: $91,275
- Canadian Independent Music Association: $126,810
- Canadian Media Producers Association: $83,375
- Canadian Music Publishers Association: $12,900
- Folk Music Canada: $34,150
Defence and security ($243,000)
- Canadian Association of Defence and Security Industries: $243,000
Education ($495,140)
- Association des Collèges et Universités de la Francophonie Canadienne [Canadian association of francophone colleges and universities]: $64,500
- CALDO Consortium: $62,850
- Canadian Accredited Independent Schools: $87,400
- Canadian Association of Public Schools - International: $103,465
- Colleges and Institutes Canada: $110,250
- Languages Canada: $66,675
Industrial machinery ($77,725)
- CTT Group: $77,725
Information and communications technology ($168,375)
- Centre d’Entreprises et d’Innovation de Montréal [Montréal business and innovation centre]: $104,775
- Information Technology Association of Canada: $63,600
Infrastructure ($133,853)
- Canada Green Building Council: $43,028
- Canadian Dam Association: $71,700
- Canadian Geothermal Energy Association: $19,125
Life sciences ($67,700)
- BIOTECanada: $38,000
- MEDEC: $29,700
Natural resources ($152,995)
- Canadian Global Exploration Forum: $9,450
- Mining Association of Canada: $30,075
- Mining Suppliers Trade Association Canada: $113,430
Nuclear ($123,875)
- Organization of Canadian Nuclear Industries: $123,875
Transportation ($131,771)
- Intelligent Transportation Systems Society of Canada: $56,771
- National Marine Manufacturers Association: $75,000
See also:
Global Opportunities for Associations: http://tradecommissioner.gc.ca/funding-financement/goa-oma/index.aspx?lang=eng
Canadian Trade Commissioner Service: http://tradecommissioner.gc.ca/index.aspx?lang=eng
PM
G7 2018. RESULTS
FULL DOCUMENT: http://e-gonomics.blogspot.
Itinerary for Monday, June 11, 2018
Ottawa, Ontario
Personal
June 10, 2018. Statement by the Prime Minister on National Public Service Week
Ottawa, Ontario - The Prime Minister, Justin Trudeau, today issued the following statement for National Public Service Week, which runs from June 10 to 16, 2018:
“This week we celebrate Canada's public servants, whose hard work and dedication make a difference each day in the lives of Canadians.
“Canada’s Public Service has earned recognition worldwide – thanks to the leadership, passion, and commitment our public servants show every day. Whether helping those affected by the spring flooding across the country, welcoming the world to Canada during the G7 Summit, or supporting Canadians abroad, public servants are there time and again to deliver the essential services we rely on.
“Public servants continue to show unwavering professionalism as they face unacceptable hardships caused by the implementation of the Phoenix pay system. The government will continue to work diligently to make sure every employee gets the pay they are owed. As outlined in Budget 2018, we have added significant resources to boost processing capacity, improve support for employees within departments, and begin work on a new pay system. Working together with our public service labour partners, we are committed to resolving outstanding pay system issues as quickly as possible.
“From bringing new initiatives to life, to carrying out ongoing services, federal public servants continue to set an example for service excellence around the world. In communities across Canada, public servants are finding innovative solutions to the challenges we face, and tackling the issues that matter most to Canadians – from promoting diversity and inclusion, to growing economies that work for everyone.
“To all public servants, I say thank you. You play a vital role to keep our democracy healthy, strengthen communities, and grow the middle class. I look forward to continuing to work with you to build a Canada where everyone has access to quality services and a real and fair chance to succeed.”
_________________
LGCJ.:
