International Development Strategy

“Mission: To promote sustainable development in Canada and abroad by supporting internationally our earth sciences community in scientific collaboration, trade and investment, and development cooperation while advancing Canadian excellence in geomatics and geosciences.”

Introduction

The rapid economic and environmental challenges arising from the globalization of trade, social and environmental issues have also created significant opportunities for countries like Canada to establish a strong leadership presence in the use of earth science technologies and know-how to help meet those challenges. In this regard, the Earth Sciences Sector (ESS) has, over the course of the past several years, successfully developed a strong reputation in many areas of the developing world in the promotion and use of earth science applications and knowledge in the pursuit of real-time solutions to local, national as well as regional problems spanning several fields, e.g. agricultural and forestry management, natural hazards management, good governance, and sustainable land management.

The scope of ESS international activities ranges from trade and investment, science and technology collaboration, and international capacity building. The Sector’s international strategy is based on targeted outcomes which will guide the Sector’s plans and activities, specifically economic benefits to Canadian industry, as well as to mobilize and augment the Sector’s knowledge capacities in support of this primary outcome.

The primary aim of this strategy is to focus the Sector’s international initiatives that reinforce our strategic presence in key markets of the developing world, as well as the benefits that benefit both parties in our collaborative activities. To a large degree, the Sector’s range of science and technology collaboration initiatives will not be as emphasized in this strategy as those promoting Canadian trade and investment goals, as well as the building of capacity in host governments enabling adoption of Canadian standards and technologies. Instead, the Sector will seek to align our core science and technology activities with the department’s new Science & Technology Strategy to ensure that the Sector’s current and future scientific and technological cooperation are better integrated within the department’s emerging framework.

Why?

The key considerations that establish the context and the rationale by which the Sector and the department exercise leadership in the international arena to promote the use of earth sciences knowledge, and the adoption of Canadian technology and expertise are:

• Departmental mandate and priorities to promote greater market access and enhance the competitiveness of Canadian industry, as well as promoting international science and technology co-operation which are cornerstones of Canadian foreign policy goals.

• Respecting Canada’s international commitments to support national and international development and technical assistance goals. ESS objectives for sustainable development in fact are tied directly to four of the five priority themes for Official Development Assistance, namely addressing good governance, helping achieve environmental sustainability, tackling health related issues, and contributing to private sector development in targeted countries.

• Ensure equitable participation by all Canadian stakeholders in the resources invested in implementing the Sector’s international initiatives proportional to the level of risk assessed by the Sector in a given bilateral or multilateral co-operation.

(The international cooperative efforts by ESS also contribute to substantial cost savings in international aid. For example, the U.S. National Institute of Building Sciences concluded that every dollar spent on preventative measures saves four dollars in post-event rehabilitation and reconstruction costs.¹ As Canada is a strong donor nation in post-event rehabilitation and reconstruction, activities by the Sector and the department in this regard will help to prevent higher future costs incurred by the Government of Canada in subsequent emergency responses.)

Canada has developed a strong reputation as an “honest broker” sensitive to multicultural issues, purveyor of leading-edge technologies and know-how, and as an active participant in international co-operation. This reputation is a branding power that few other countries have, especially in the developing world. The branding power reflected in the Canadian public-private partnership (PPP) of teaming public sector expertise with private sector technological capacity, is becoming the standard of reference in many key markets in the developing world, as well as multilateral organizations such as the UN Economic Commission for Africa, and the UN Environment Programme.²

The Sector is therefore well positioned to capitalize on supporting or promoting opportunities that benefit Canadian industry, academia and research institutions, while helping other nations attain their respective developmental goals and priorities.

Where?

The international development strategy seeks to determine where the strengths of Canadian earth sciences can be best positioned in the developing world to achieve the most optimal outcomes relative to the resources invested by the Sector, in partnership with industry, academia, and foreign partners. The recommendations of the markets to be focused on are therefore based on Canadian foreign and development policy goals in East Asia, Latin America and Africa, and further refined by secondary considerations such as:

• Reviews of current socio-political and economic risk assessments, input from companies and institutions active in the selected region, to determine markets offer the potential for best return on results in the next 5 years
• Degree of assistance from international financial institutions such as the World Bank and similar multilateral agencies that provide extensive leveraging
• Key markets identified as being of primary and sustained interest by the Canadian earth sciences industry (e.g. some identified by the geomatics industry in a recent department sponsored study ³)
• ESS capacity and availability to offer assistance, within the Public-Private Partnership (PPP) approach for which Canada has developed a strong reputation
• The ability of participating Canadian companies to form partnerships or alliances to better pursue international opportunities
• Bilateral technical co-operation and assistance agreements with the country that will lead to building a terrain enabling easier adoption of Canadian standards, technologies and services

The Sector has had extensive experience in promoting Canadian earth sciences technologies and know-how in many parts of the world, principally in Latin America (Andean countries), Eastern Europe (Poland and Russia), Middle East (Saudi Arabia and U.A.E.), China, India, and Africa (Tunisia, and the UN Economic Commission for Africa). To date, the long term benefits to Canadian industry has varied significantly from one country or region to another, being highly dependent on the risk level of entering the market (as a function of state support of the general use of geo-knowledge in socio-economic development, local enforcement of intellectual property rights, efficiency of various state actors to support deployment of innovative geo-information tools, and level of resources to support such efforts).

These areas of the world also count on extensive sources of funding from different international financial institutions such as the World Bank, the Global Environmental Facility (GEF), Asian Development Bank (ADB), and the Inter-American Development Bank, in addition to the recipient country’s own resources. In 2007, it is estimated that such key multilateral agencies plan to distribute over $39B (Cdn) in technical assistance and leveraged funding, with a significant portion devoted to private sector development. This figure does not include sums allocated by bilateral development agencies such as CIDA, USAID, and the UK Department for International Development (DFID).

The Russian Federation, for instance, will be able to count on more than $3B (Cdn) of international assistance in 2007 from the European Bank for Reconstruction and Development (EBRD), the World Bank, and the GEF to support development projects affecting diverse sectors such as agriculture, environment, energy, mining, and cadastral development. As noted above however, one of the key (secondary) considerations to market support by ESS is also the continuing interest of Canadian industry which, to date, has remained at nascent levels despite the significant support given by the Sector between 1998 to 2002. Some of the reasons for the disinterest by the Canadian private sector were the inability of early Russian partners to follow through on project implementation, lack of support by local authorities to expedite approvals, and in one case, lack of payment by clients to one Canadian company which participated in one of the Sector-led trade missions to the country. The Russian business environment therefore carries a high risk level which is a significant impediment to expanding the Sector’s efforts to promote Canadian industry, and particularly when Canada no longer considers Russia a strong candidate for long term developmental aid and assistance.

Similarly, early efforts to support the industry in the Middle East such as the U.A.E. and Jordan has not borne fruit as there is significant competition from EU countries such as the UK and Denmark who are prepared to aggressively support their industries to a scale that cannot be matched by Canada. Although there is little international financial funding for many countries in this region, the private national resources of many states more than compensate for this absence. However, the long term relationship building so crucial to build a competitive edge for Canadian companies has not been sustained by both public and private sector stakeholders, and as a result, the niche opportunities have been frequently won by other competitors with deeper leveraging resources. The risk level for Canadian industry is consequently high without sustained and concerted government aid and support.

Results have been more encouraging from the Sector’s efforts of the last 10 years in the developing world such as Latin America and Africa (Sub-Sahara). Although there has also been occasional success stories in some European markets such as Italy, the Sector has generally not provided active support to industry in a regional market dominated by heavyweight competitors with deeper pockets, and who have privileged access to EBRD support. In this respect, given the limited resources (both financial and human) that the Sector could conceivably offer to the Canadian industry, the choice of countries for continuing support and development is also driven by the extent of our bilateral relationship (both official and personal), as well as the steady but sustained level of success experienced by many companies who have worked closely with this department in international trade and investment.

Market Recommendations

One of the corollary initiatives that the Sector will need to undertake to ensure that the following market opportunities can be effectively exploited would be to build a strong and on-going relationship with key multilateral financial institutions, in order to position Canadian firms strongly in the competition for lucrative contracts tendered every year. At present, the infrastructure to track program developments as well as to connect appropriate firms to potential opportunities is extremely limited, and a significant portion of the Sector’s success to leverage resources from these sources will be dependent on the relationships built with:

• World Bank
  • International Development Agency (IDA)
  • Global Environmental Facility (GEF)
  • International Bank for Reconstruction and Development (IBRD)
• International Finance Corporation (IFC)
• Inter-American Development Bank (IDB)
• African Development Bank (AFB)
• Asian Development Bank (ADB)

Based on previous experience by the Sector, and a review of opportunities in select countries identified by Canada as fast growing developing economies with relatively strong public infrastructure, available international resources for leveraging, level of organized interest by industry, opportunities to expand on Sector knowledge base, and recommendations by Canadian commercial posts, it is recommended that the Sector focus their international support for Canadian industry in:

• Sub-Sahara Africa (Senegal and South Africa)
  • Sustainable Land Management (cadastral surveys)
  • Spatial Data Infrastructure (support to land planning, and public health)
  • Risk-Based Natural Hazards Management

Senegal and South Africa are the two fastest growing markets in Africa, and have drawn growing interests by Canadian companies, multilateral development agencies, and full support by Canadian posts. Their governments have requested for Canadian assistance and have demonstrated sustained capacities to reform their governance structures using Canadian standards to meet their respective economic and environmental challenges related to land management, and transparent decision-making processes. The approach to Africa is based on successful collaboration with these two key African countries in a “hub and spokes” model, from which future opportunities would be identified within these countries and also in neighbouring markets. This is co-incident with the approach adopted by DFAIT and CIDA as well.

South Africa is the only developed economy on the continent, and the largest as well. The country possesses significant resources to deal with its many challenges in urban development, health care, security, mining, and the environment. International financial support come primarily from the Global Environmental Facility and the African Development Bank, and this amounts to more than $40M (US) per year. The government has put a high priority on using geo-information tools in support of more effective and transparent public policy decision making processes; in this regard, has requested Canadian assistance in CIDA-funded pilot project in the health care sector which is experiencing critical challenges in addressing HIV infection with limited resources. Successful demonstration of SDI tools in this project could lead to other opportunities in security and environmental fields.

Senegal is the fastest growing economy in West Africa and a highly stable democracy. This socio-political environment has attracted massive aid flows from the World Bank and the African Development Bank. Current undisbursed aid in 2007 runs close to $450M, and areas of focus are infrastructure, agriculture, rural development, health care, natural disaster management, and energy. As a result of a highly successful project undertaken by ESS in Tunisia, Senegal approached Canada to help develop a SDI-based framework and the use of geo-information tools to build more effective and transparent decision making processes in the public infrastructure sector. CIDA has awarded the Sector a $5M (Cdn) project to assist Senegal in this regard, and fully 70% of this amount will be allocated to participating Canadian firms. This initiative is attracting significant interest from Quebec-based firms (given linguistic ties) and will be part of the Sector’s beachhead in West Africa to develop a strong regional market position for Canadian firms.

• Latin America (Andean region, i.e. Chile and Peru)
  • Risk-Based Natural Hazards Management
  • Spatial Data Infrastructure (support to public policy planning and decision-making processes)

The Andean region has received sustained Canadian and multilateral support to develop more effective infrastructure based on Canadian expertise to address and manage natural hazard risks. The 7-year and $50M geoscience project undertaken by ESS with the Andean nations in addressing natural hazards management has been hugely successful, and has helped to establish a strong reputation for Canadian expertise and know-how. There have been considerable efforts made by Canadian firms in Peru to promote both geomatics and geoscience technologies over the last 3 years. Canada has successfully branded its technologies and public-private partnerships in these two countries that have strong ties with Canada. These two countries will receive in from 2007 to 2011 upwards of $3.5B from the Inter-American Development Bank and the World Bank to focus on state modernization, infrastructure development and health care improvements. ESS support to these two key countries will help solidify the Canadian brand image in South America as part of the same “hub-and-spokes” model mentioned in the African approach.

Peru has been a popular focus for Canadian geomatics firms, and Géo-Québec has signed two MOUs with Peru in the last 2 years to establish a strong Canadian presence in the promotion of geo-information tools and training in fields such as agricultural management, mining, and disaster management. Continued support from the Sector has been requested by Canadian firms to help trouble shoot project implementation issues, liaising with new government authorities, and to further provide technical advice and capacity building to Peruvian academic and government stakeholders.

Chile has a free trade agreement with Canada, and is Canada’s largest trading partner in South America. It is also one the key linchpins of the Canadian new Americas Strategy to reinforce bilateral ties and relationships. Chile also passed a new legislative framework to establish the new SDI framework upon which new initiatives using geo-information tools will be built into a wide ranging number of policies in urban planning, transportation, health care and agriculture. Chile in particular is signing a MOU with Canada to develop a spatial data infrastructure based on the Canadian Geo-Connections program, and is seeking to emulate the Canadian public-private partnership (PPP) approach to drive private sector development, while adopting Canadian standards, tools and technologies.

• China
  • Risk-Based Natural Hazards Management (landslides and earthquakes)
  • Earth Observations applications and satellite data acquisitions
  • Groundwater exploitation and management
  • Agricultural development and management
  • Energy (gas hydrates)

The Chinese economy is still showing a sustained expansion for the near and medium term. China is one of Canada’s two key Asian trading partners, and in spite of the huge growth registered over the last 15 years, still faces enormous challenges in environmental management, waste management, groundwater resource deficiencies, energy resources, urban planning, agricultural management, and natural hazards issues. The scale of these challenges demands new tools and management approaches to address them in order to improve the quality and standard of living for its citizens.

Between 2007 and 2008, China will receive over $4B from the World Bank, the ADB and GEF to help address these challenges and issues; 40% will be devoted to transport infrastructure, 25% in agriculture and natural resource protection, 23% for urban and water supply development, and 11% for energy development.

Canada has had an active relationship with China in the promotion of the use of geoscience knowledge and policies to support the Canadian mining industry. Canada and China also signed a treaty in 2007 to promote co-operation in science and technology that could lead to opportunities for earth science technologies of use in critical economic sub-sectors. Further, the two countries have just signed a MOU to promote co-operation in earth observation data that should lead to exports of Canadian application technologies that will have direct impact on agricultural management, groundwater resource management, and natural hazards responses. Further demonstrations and joint development of Canadian application technologies based on these ties of bilateral cooperation will position Canadian companies strongly to compete.

• India
  • Mitigation of natural disasters (landslides and urban flash flooding)
  • Spatial Data Infrastucture (disaster management)
  • Geospatial information for agricultural development

Canada has cultivated a receptive market in India over the last 5 years for geomatics and geosciences technologies and solutions. India is Canada’s second key Asian trading partner, and demands are growing for better technological solutions to India’s challenges in managing its environment, cadastral management, agriculture, and natural hazards and disaster management. The two countries signed a treaty to promote science and technology co-operation in 2006 which will create more opportunities for Canadian industry to showcase their applicability in areas important to India such as agricultural and energy development, as well as disaster management.

India also benefits from large aid funds from the World Bank, the ADB and the GEF to the tune of $3B for 2006-7. This developmental aid is aimed at building solutions focused on infrastructure development, human development and improving livelihoods, and is largely based on the country’s own development agenda and road map. Competition is extremely fierce in this country, and the business environment is further complicated by overlapping federal and state jurisdictions, that may pose operational challenges to new and inexperienced firms. Sector support to Canadian firms greatly interested in this market is essential to ensure a strong relationship with government stakeholders, and thus their commitments to incorporate Canadian solutions into their plans and initiatives. The Indian approach is based on developing closer contacts with state and local actors, and piloting small scale controlled projects while advocating for transparent decision-making processes between the public and private sectors. On-site support and working relationships with Canadian posts is imperative, and more so in India than in China but the pay-off in terms of Canadian market position could be extremely significant if sufficient patience and long term perspective are given.

Sector-supported initiatives to promote Canadian industry in international markets

The international work to promote Canadian industry for trade and investment objectives, as well as supporting development cooperation with foreign governments are also supported by three enabling initiatives; i.e. the International Opportunities Service (IOS), the Innovation Acceleration Centre (IAC), and leveraging through International Financial Institutions;

The International Opportunities Service (IOS) was formed in 2006 to provide core or start-up funding for pilot/demonstration projects to showcase and test the viability of Canadian technology and know-how in target markets, as well as to build and strengthen the capacity of developing countries that will enable the adoption of Canadian standards, technologies and services;

The Innovation Acceleration Centre (IAC) was established in 2000 to help accelerate the deployment of innovative Canadian technologies in the marketplace, and will also facilitate the development of synergies among the mentored companies to help develop other applications that can be deployed in the international marketplace;

And as part of a larger effort to diversify the resources and promote greater coherence with multilateral efforts in achieving developmental goals, the network of partnerships will be expanded with international financial institutions such as the Global Environmental Facility (GEF), the Inter-American Development Bank, the International Development Agency and other similar multilateral agencies. This effort would further advance the leadership position and credibility of Natural Resources Canada in delivering on the Government’s foreign policy goals as well as enable Canadian industry to be better linked into established international sources of finance and support.

ESS success in leveraging support from international financial institutions would also enhance the Sector’s support to track quantifiable data of the ability of Canadian firms to compete and win in these key markets described above. A new cost and benefit analytical framework will be developed to assist in the tracking of this information, particularly in light of the required performance measurement indicators as described in the attached Annex: International Activity Plan and Travel.

Conclusion

This strategy is based on the earlier work captured in the International Strategic Framework that has been used by the Sector for the last several years, but further develops a more strategic and outcome-driven focus that would enable the Sector to play a more effective and focused role in the developing world in fostering S&T collaboration, promoting the capabilities of Canadian technologies and services in new and emerging markets, and also to enable the Government meet its international commitments to support developing countries in attaining their respective developmental goals.

It is critical that a focused results-based management approach be adopted to ensure an appropriate alignment of the Sector’s international efforts with the departmental priorities that support the Government’s key policy goals. Although the developing markets recommended in this strategy were selected for their potential to help the Sector meet its immediate strategic outcomes, there are other countries in the developed world with whom the Sector has entered or will enter into bilateral or multilateral co-operation as long as the activities help meet one or more of the outputs and outcomes described above, e.g. research co-operation with the U.S., Japan, Germany and India on gas hydrates in the Mackenzie Delta region.

An inclusive approach needs to be taken into consideration when assessing whether a proposed international activity helps to support or build economic benefits to Canada, for in the end, it is not just a product or service that is being purchased by a prospective client of Canadian technologies, or a standard adopted haphazardly by a governmental or non-governmental organization, but the conscious establishment of a direct partnership with Canada in the realization of mutual interests that benefit both parties. It is nothing short of the expansion of Canadian values into the international domain. The international strategy for ESS will continue to evolve based on this ultimate foreign policy objective.

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