Report

Introduction

A delegation of six Canadian parliamentarians participated in a bilateral visit to Santiago and Valparaiso, Chile from 11 to 14 March 2018, and Montevideo, Uruguay from 14 to 16 March 2018.  The delegation head was Mr. Dan Vandal, M.P.  Accompanying Mr. Vandal were the Hon. Anne Cools, Senator; the Hon. Michael MacDonald, Senator; Mr. William Amos, M.P.; the Hon. Candice Bergen, P.C., M.P. and the Hon. Thomas Mulcair, P.C., M.P.

While separated by a great physical distance, Canada and Chile have long maintained a close relationship as hemispheric partners.  The two countries share similar geography, have populations guided by community-minded principles, and enjoy a history of international collaboration and cooperation.  The Chilean diaspora resident in Canada is the largest diaspora of any Central or South American country[1].

Similarly, Canada and Uruguay share a host of similar values and interests.  Uruguay’s capital, Montevideo, serves as the permanent secretariat of Mercosur, a key regional trading bloc. The city is also a regional office for the International Development Research Centre, a Canadian Crown corporation that funds research in developing nations. 

Despite the close ties between these two hemispheric partners and Canada, the Canadian Section of ParlAmericas had yet to hold a bilateral visit to either Chile or Uruguay. 

ParlAmericas is one of the only organizations that brings together parliamentarians from all 35 countries of the Americas.  From the time when ParlAmericas was established in 2001, the Latin American and Caribbean region has evolved from a region of emerging markets to one characterized by thriving modern democracies.  Many of the countries in the region share the same values and outlooks as Canada, and make important, like-minded partners.

Briefing withOfficials of the Ambassador of Canada to Chile

On 12 March, the Canadian delegation met with Canada’s Ambassador to Chile, Patricia Pena, and Embassy officials to receive a briefing on political, trade, social and security matters in Chile.

Ambassador Pena noted that Chile’s new president, Sebastian Pinera, took power the previous day and that the newly elected National Congress would begin its sittings during the current week. The delegation was also informed about Chile’s political system and parties and the new government’s priorities, which focus on economic growth.  To this end, the government intends to simplify the tax system, amend the pension system, improve technical skill education in the country and improve social security for the middle class.

In terms of economic matters, the delegation heard that bilateral trade between Canada and Chile is around $3 billion annually.  It was noted that Chile is Canada’s top destination for direct foreign investment, that Canadian businesses remain active in Chile’s financial services market, and that several large Canadian pension funds have substantial investments in business operations in Chile. Chile is considered by Canadian companies to be a country with low corruption and high institutional stability.

Also of note, the prospects for Chile’s economy have improved as the global price of copper had risen (copper accounts for about 40% of Chile’s exports).  In addition, Chile has become a tourist destination for Canadians, with 7,000 to 8,000 Canadians visiting annually.

It was also noted that Chile is prone to natural disasters.  As an example, since 2010 there have been three earthquakes that have measured higher than 8.0 on the Richter scale.

Roundtable with representatives of Canadian investors/investments in Chile

In the morning of 12 March, the delegation met with numerous representatives of Canadian companies operating in Chile. 

The discussion held between the delegation and business representatives covered a number of topics, including Chile’s extractive industry, utility projects, sustainable development and environmental considerations.  It was noted that labour shortages in Chile provided a potential opportunity to involve a greater number of women in the work force, and that the Canada-Chile Free Trade agreement had recently been amended to include a chapter on gender.  Also, the delegation heard that Chile plans to invest heavily to renew its infrastructure and that this represented a potential opportunity for Canadian companies to provide their expertise. 

Greetings and question and answer session with staff at Canada’s Embassy

In the afternoon 12 March, the delegation held an informal gathering with staff from Canada’s Embassy in Chile.  The discussions were wide-ranging and some of the matters raised during this session included voter turnout in Chile, the interaction between the houses in Chile’s bicameral Congress and the attitudes of young Chileans. It was noted that both Canada and Chile shared the same democratic ideals and attitudes about prosperity.

Reception with alumni of Canadian education institutions

In the evening of 12 March, the delegation attended the Canadian Embassy to Chile’s annual reception for alumni of Canadian education institutions. The event gathered Chilean students who attended post-secondary institutions in Canada by virtue of being awarded scholarships through the Emerging Leaders in the Americas and the Canada-Chile Leadership programs. Delegates held informal discussions with participants and organizers of this program about their experiences and potential opportunities for continued collaboration between the two countries.

Meeting with a ParlAmericas member of the National Congress of Chile

In the morning of 13 March, the delegation travelled from Santiago to the National Congress of Chile in Valparaiso. The first meeting the delegation attended was with Mr. Ignacio Urrutia, member of the Chamber of Deputies and a long-serving and current member of the ParlAmericas board of directors. Mr. Urrutia explained that this was the first week of sittings for Chile’s newly elected National Congress and that he held fond memories of his visit to Ottawa in the spring of 2016. Speaking on behalf of the delegation, Mr. Vandal thanked Mr. Urrutia for meeting with the delegation during this busy time in his schedule. He also noted that Canada and Chile had many areas of common interest, such as enhanced trade, human rights, and indigenous peoples.

Following the meeting with Mr. Urrutia, the delegation sat in the visitor’s gallery of the Chamber of Deputies for a portion the sitting and were recognized and introduced by the Speaker.

Roundtable with Indigenous members of the National Congress of Chile

In the morning, on 13 March, the delegation met with four Indigenous members of the National Congress. These were Ms. Emilia Nuyado Ancapichun, member of the Chamber of Deputies; Mr. Francisco Huenchumilla, Senator; Ms. Yasna Provoste Campillay, Senator; and Ms. Aracely Leuquen, member of the Chamber of Deputies. Senator Campillay is of Diaguita descent while the other are of Mapuche descent.

The discussion focussed on advancements made by Indigenous peoples in Canada and Chile, along with opinions about some of the intransigent challenges that remained. The delegation heard that Chile’s Indigenous peoples have used Canada’s experiences regarding the relationship between government and Indigenous peoples to gain insights about their own domestic situation. It was noted that Indigenous peoples in Chile desired to replicate Canada’s nation-to-nation approach to holding discussions between government and Indigenous peoples.

The Indigenous members said that issues of concern to Indigenous peoples in Chile included questions related to land ownership, development and stewardship. The delegation heard that Indigenous peoples in Chile wanted to establish formal legal and constitutional recognition of their traditional lands. Further, it was noted that the introduction of legislation was being considered to protect natural resources, land and water. However, it was recognized that political will would be required to enact such legislation.

The Indigenous members also brought to the delegation’s attention an issue that had recently arisen involving a Canadian company that, in their view, did not respect certain environmental standards in conducting their business in Chile. The members expressed the view that Canadian companies ought to adhere to the same standards abroad as they did domestically.

The delegation provided information on Canada’s on-going process of reconciliation and its adoption of United Nations Declaration on the Rights of Indigenous Peoples. Members of the delegation also remarked that Canada was seeking to learn from the mistakes made in the past and that new solutions were being sought.

Meeting with members of the Senate’s Foreign Affairs Committee

During the afternoon of 13 March, the delegation met with members of the Senate’s Foreign Affairs Committee. The topics covered during the discussion included Chile’s views on defence, the conservation of marine areas and the extractive industry.

With respect to defence, the delegation heard that Chile holds an interest in strengthening partnerships with countries located on the Pacific Ocean. Members of the Foreign Affairs Committee spoke favourably of the benefits to date of the Canada-Chile Free Trade Agreement. In their view, both countries share like-minded outlooks and geographic similarities; the two countries ought to deepen their partnership in trade and as defence allies.

Members of the Foreign Affairs Committee told the delegation that 42% of Chile’s coastline is considered protected, a status which requires both surveillance and enforcement. Further, marine conservation must be balanced with the needs of local maritime communities that depended on the ocean to earn their livelihoods. Also, the notion of creating a national park program in Chile, such as that which exists in Canada to protect and conserve large parcels of land, was of interest to members of the Foreign Affairs Committee. A view was also expressed that surveys had consistently indicated that Chileans in general, and youths in particular, had grown increasingly dissatisfied with national politics. It was noted that environmental and oceanic conservation represented opportunities for members of the National Congress to engage young people and interest them in participating in the work of Congress.

Sustainable development and corporate social responsibility in the extractive sector in Chile were also raised during the meeting. Members of the Foreign Affairs committee indicated that communication, commitment and trust were important pillars for companies seeking to operate in the Chilean extractive sector. They also noted Chile’s desire to strengthen and clarify the application process for extractive sector projects and to build the oversight capacity of the institutions tasked with regulating the sector. Members of the delegation noted that an unlevel playing field can be created for Canadian companies operating in the extractive sector abroad in instances where Canadian companies adhere to higher regulatory standards than do their counterparts from other countries.  

Meeting with members of the Chamber of Deputies’ Human Rights Committee

Also during the afternoon of 13 March, the delegation met with members of the Chamber of Deputies’ Human Rights Committee. During the meeting, they exchanged views about human rights issues of importance in their respective countries.

Members of the Human Rights Committee outlined the past and recent work their committee had undertaken. The human rights abuses that occurred during the military regime that ruled Chile following the 1973 coup d'état remained a source of study and inquiry for the committee. The delegation heard that this matter was being dealt with in a non-partisan manner, with the focus remaining on finding truth, justice and reconciliation. Members of the committee also noted their work, in a broad sense, entailed identifying and aiding vulnerable groups in society. A comment was made that while many in Chile currently enjoyed a good quality of life, it was important not to neglect the suffering of certain vulnerable populations. Members of the committee also lauded Canada’s international reputation for maintaining high standards for environmental protection, human rights and treatment of Indigenous peoples.

Members of the delegation noted that Canada has at times and in different ways, mistreated its Indigenous population. The establishment of the government-sponsored residential school system to attempt to assimilate Indigenous people was cited as an example. It was also noted that Canada has, in recent times, taken steps to acknowledge past mistreatment of Indigenous peoples and improve their current circumstances. To that end, members of the delegation provided information on the Truth and Reconciliation Commission tasked with documenting the impacts on Indigenous peoples of the residential school system and the work of the National Inquiry into Missing and Murdered Indigenous Women. Members of the delegation noted that many of the challenges currently facing Canada’s Indigenous population are deep-seated, and have led to notable statistical discrepancies between Indigenous people and the general population in terms of incarcerations, illnesses and education levels.

Members of the delegation and members of the Human Rights Committee agreed that human rights inquiries can be viewed as an important self-reflection exercise. It was also noted that, at times, economic interests and human rights interests can be at odds. Further, human rights issues span borders and, as such, they highlight the importance of frank discussions held at multilateral forums, such as ParlAmericas.

Site visit and meeting with the Head of the National Office for Emergencies

In the morning of 14 March, members of the delegation visited the National Office for Emergencies (ONEMI) located in Santiago, and met with Mr. Ricardo Toro, the head of ONEMI. Due to its geographical location and topography, Chile is susceptible to experiencing numerous kinds of natural disasters, including earthquakes, tsunamis, drought, floods and volcanic eruptions.

ONEMI is responsible for coordinating the National Civil Protection System. The purpose of this system is to educate and prepare the public for natural disaster emergencies, while providing prompt, coordinated and efficient responses during such emergencies. The national coordinating centre located in Santiago monitors meteorological, seismological and environmental data and relays information to all parts of the country in real time.

The delegation heard that, over the past three years, Chile had experienced three earthquakes measuring at least 8.0 on the Richter Scale. During those incidents, ONEMI helped to coordinate the evacuation of more than one million residents. Further, Chile has over 2,000 volcanos, of which 90 are currently active. ONEMI has also developed an online portal for use by citizens to learn about the potential natural disaster threats in their region and what they can do to be prepared in the event of an emergency. The delegation heard that the main goal of ONEMI’s work was to save lives, whereas buildings can always be rebuilt.

Site visit to project funded by the International Development Research Centre

In the morning of 14 March, members of the delegation visited a women’s leadership project in Santiago funded by Canada’s International Development Research Centre (IDRC). The project was called Women Supporting Women: Network to Support Inclusive Policy Making and was being implemented by Fundacion Democracia y Desarrollo (the Democracy and Development Foundation). The delegation met with the project leaders Mr. Ricardo Lagos, former President of Chile, and Ms. Clara Budnik, Executive Director of the foundation, along with workers at the foundation and participants in the project. The IDRC and the foundation collaborated since the 1980s on projects to increase citizen participation and community building.

The delegation was provided with an overview of certain past projects undertaken by the Foundation, including a project to equip all public libraries in Chile with the internet, and another that sought out citizen input online in a non-binding exercise to redraft Chile’s constitution.

The Foundation’s current project involved connecting women leaders in Santiago who were in different stages of their careers, so that they could transmit experiences, share perspectives and mentor one another. The professionals involved in this project had developed a network to provide aid to recently arrived immigrants to Chile, such as helping them find employment and legal support for settling into their new country.  

That afternoon, the delegation flew from Santiago, Chile to Montevideo, Uruguay.

Working breakfast with Uruguayan business leaders with interests in Canada

In the morning of 15 March, the delegation met with businesspersons living in Montevideo who work for or with Canadian businesses. Attending the meeting were representatives from the following business sectors: agriculture, plastic injection, software, biotechnology, financial services, real estate, airport equipment supplies, lighting, the extractive industry and fishing and fish processing.

The main topics of discussion were free economic zones (i.e., special economic zones in which the goods and services produced or provided are not subject to customs duties), Mercosur and Uruguay’s experience with legalizing recreational cannabis as of December 2013.

The functioning and the merits of operating in the free economic zones in Uruguay were discussed. Overall, the delegation heard that these free economic zones were viewed positively for providing, among other things, employment and an industrial base. Uruguayan participants in the discussion encouraged members of the delegation to promote the utilization of Uruguayan free economic zones by Canadian companies. In their view, the benefits included that the free economic zones could be used as an important entry point to markets in Brazil and Argentina; that lessons about operating a business in South America could be learned; there were no tariffs on exported products; and that Uruguayan workers have high education levels.

Mr. Vandal noted that Canada and Mercosur had recently launched discussions on the potential of a trade deal.  The delegation heard that Uruguay and Paraguay are the diminutive partners in Mercosur, as compared to the populations and economies of Brazil and Argentina. It was noted that under the Mercosur trade agreement, companies in the four member countries could not enter into bilateral trade deals with non-member countries without express permission from all member countries. Also, it was noted that companies operating within Mercosur countries tended to compete with one another for access and a greater share of trade markets outside of the trading bloc.

A variety of opinions were expressed in the discussion about Uruguay’s legal cannabis market. Some indicated they felt the legalization of cannabis had created jobs and investment. Others expressed concerns about worker productivity and occupational safety. Still others stressed the importance of education efforts on the part of the government about the use and/or non-use of legal cannabis.

Meeting with the National Drugs Board

In the morning of 15 March, the delegation met with representatives of the National Drugs Board, including Dr. Juan Andrés Roballo, Deputy Secretary of the Presidency, in Montevideo. Topics discussed at the meeting revolved around the production and distribution of legal recreational and non-recreational cannabis in Uruguay.

The delegation heard that the national government in Uruguay regulated the production distribution and use recreational and non-recreational cannabis in the country. The reasons why cannabis use was legalized included that research had indicated that a prohibition on cannabis had largely been ineffective, black market cannabis was creating wealth for organized crime, and public health risks from consumption of unregulated cannabis was a concern.

It was noted that the Uruguayan government did not promote consumption of cannabis. The public education program warned users and potential users about the risks of consuming cannabis and discouraged its consumption. Further, Uruguay does not encourage other countries to legalize cannabis.

The delegation was told that the National Drug Board, which is responsible for implementing the legalized cannabis regime, is a ministry created under the President, and it has its own special secretariat. The board is composed of representatives from the health, agriculture and social development sectors, and receives input from a scientific advisory committee and the University of the Republic, the oldest and largest university in the country.

Production of cannabis is provided by two companies operating under strict government regulations. These companies report to, among other bodies, Uruguay’s anti-money laundering secretariat and have to declare and account for the source and spending of all of their money. Supply of cannabis to the public is controlled by pharmacies. It was noted pharmacies have, at least thus far, been reluctant to embrace this role.

Additionally, the government created a registry of users of cannabis, in order to enforce a maximum amount of cannabis that an individual was permitted to purchase, which is 40 grams per month and 10 grams per week, at a price set by the government. It was noted that privacy concerns about this registry remain an important issue among the public. However, the delegation heard that numerous safeguards exist to secure this registry, and that Uruguay has a federal access to information law, a privacy law, and that individuals have certain guaranteed rights related to privacy under Uruguay’s constitution.

The delegation was told that, at present, supply does not cover demand. It was estimated that Uruguay had approximately 120,000 cannabis users, but about 30,000 have their cannabis supplied by the government. As such, the goal is to increase supply to cover demand. It was noted that black market cannabis holds many risks, including a lack of quality and sanitary controls and the possibility that the product may have been altered.

Other miscellaneous matters that were raised during the discussion included that:

• no part of the sale of cannabis was profitable as the purpose of legalizing cannabis was to replace the black market;
• Uruguay has had to conduct the entire business in cash, as the country has encountered difficulties related to dealing with national-level U.S. financial institutions. The U.S. has a federal prohibition on cannabis and U.S. banks are reluctant to accept cannabis industry money for fear of breaking the law;
• recent scientific research indicated that cannabis use led to positive results in palliative care, in particular for those suffering from epilepsy; 
• uses for industrial hemp were being explored including in textiles, cosmetics and nutrition; and
• self-cultivation in Uruguay is set at six plants and 450 grams per year.

Meeting with Uruguayan parliamentarians

In the afternoon of 15 March, the delegation visited the General Assembly of Uruguay and met with a large group of members of the Assembly. During the ensuing discussion, a number of diverse topics were raised including the environment, the extractive industry, gender equality and legalized cannabis.

Members of the Uruguayan Assembly were interested in exchanging information about environmental protection laws. The Canadian delegation heard that in Uruguay, there currently is no federal department for the environment (environmental matters fall under the department of Housing) but consideration is being given to creating a separate department for the environment.

In terms of gender-equality issues, the delegation heard that members of the Assembly were seeking to promote equal participation between men and women in carrying out their legislative duties. Women accounted for about 20% of the composition of the Assembly. Some members of the Assembly noted that other gender-related issues of note before the Assembly include studies being conducted on femicide and human smuggling.

Members of the delegation and of the General Assembly engaged in a lengthy discussion on the legalization of cannabis in Uruguay. Members of the Assembly told the delegation that the debate over the legislation to legalize cannabis was, at times, heated and contentious. Some members of the Assembly expressed the view that the effort on the part of the government to educate the public about the negative health effects caused by substance abuse and to promote substance abuse prevention remained insufficient. Others stated that Uruguay’s regulatory regime for cannabis did not promote or encourage cannabis consumption. Rather, the regime served to prevent use and addiction and promote nutrition and a healthy lifestyle. Some stated that illicit drug trafficking harmed society and disproportionately placed youth at risk. Still others were of the view that cannabis should be legalized as a matter of personal freedom. Comparisons were made between the treatment of alcohol consumption by society and that of cannabis. Some noted that legalized cannabis created a grey market in the country, in which cannabis was purchased legally then sold illegally. Lastly, some stated that the results of the legalization of cannabis needed to be studied and that time would provide evidence. In some members’ view, Uruguay considered the legalization of cannabis to be its best option and they did not recommend that other countries emulate their approach.

Working breakfast with civil society groups (equity and inclusion)

In the morning of 16 March, the delegation met with representatives from Uruguay’s national access to information agency and with a representative of the Lesbian, gay, bisexual, transgender and intersex (LGBTI) community in Montevideo.

The delegation heard that Uruguay’s access to information and privacy legislation were enacted in 2006. The Uruguayan access to information and privacy regimes were described as having been modeled after the regimes in Europe, and were rights-oriented and consumer-based. It was stated that while the access to information agency in Uruguay was housed under the presidency, this did not cause concern among the public. Rather, the agency operated with full independence from the presidency. Further, the delegation heard that Uruguayans ranked among the top countries in South America in having trust and confidence in their public institutions.

The representative from the LGBTI community provided the delegation with information about the anti-discrimination law that passed in 2004, the 2009 gender identification law and the 2013 equal marriage law. Her organization was currently lobbying the General Assembly to update Uruguay’s human rights law. In her view, the most important vehicle to promote positive change for the LGBTI community was through education. Other topics raised during this discussion included the treatment of LGBTI community throughout the region, including Argentina, Brazil and Chile, and the challenges faced by individuals who undergo sex change operations. The representative from the LGBTI community indicated that she planned on attending a forthcoming international LGBTI conference to be held in Canada.

Meeting with the International Development Research Centre (IDRC)

In the afternoon of 16 March 2018, the delegation met with officials working for the International Development Research Centre (IRDC) and partners working with it, at the IDRC regional office in Montevideo.

IDRC is a Canadian Crown Corporation created in 1970 under the International Development Research Centre Act.  Its mandate is to initiate, encourage, support and conduct national research into the problems of the developing regions of the world and into the means for applying and adapting scientific, technical, and other knowledge to the economic and social advancement of those regions. IDRC has its headquarters in Ottawa and maintains regional offices in Cairo, Nairobi, New Delhi and Montevideo.

The delegation heard that the IRDC funds or supports research projects aimed at improving the quality of life and providing employment opportunities for communities located in the southern hemisphere. Often these projects were considered riskier investments, in that they involved low-income communities located in remote areas. The goal was for a given project to become self-sustaining and reproduceable in other similar communities. Often projects were run in iterations, where, ideally, costs decreased and efficiency and effectiveness increased with each iteration. Generally, projects were co-funded, with the IRDC covering the initial test phases and the host country funding the implementation.

In 2016-17, the Montevideo office received about $19 million in funding for projects, of which 70% was derived from parliamentary allocation and 30% from private donors. At the time of the delegation’s visit, the IRDC was overseeing 100 projects in 33 countries. The delegation was told about the following three projects being run in Latin America.

• A project meant to increase the inclusivity of the economy. Its focus is on overcoming barriers and creating economic opportunities for women and youth through improved financial literacy. The project involves intensive online coaching that lead to small microprojects pilots implemented by non-governmental organizations in controlled environments. The delegation heard that about half of the women in Uruguay are economically disadvantaged (e.g., earning less than $2 a day) and that economic inequality among the general population throughout region is acute. The project has been successful and is beginning a new phase of “scaling up.”
• A project to create a network or alliance between professional businesswomen. The delegation heard from a participant in the project who is the head and founder of a Benefit Corporation or “B Corp.” These new types of corporations receive certification for voluntarily meeting higher standards of transparency, accountability, and performance than they are obliged to under law. The purpose of the project is to act as an incubator for new business ventures and to connect and empower women.  
• A project run in conjunction with the Inter-American Development Bank to address gaps in the Latin American education system. The delegation heard that in global rankings for academic achievement in science, Latin American students are routinely at or near the bottom. Further, the region also suffers from a high drop-out rate among students in primary and secondary schools. The delegation heard that the IDRC was investing in technology to aid education and close gaps based on evidence and the needs of students.

Site visit to a free economic zone (Zonamerica)

In the afternoon of 16 March, the delegation visited the Zonamerica, a business and technology park operating in a customs-free economic zone, located on the outskirts of Montevideo. There, the delegation met with directors and officials and was given a presentation about Uruguay-Canada relations, and the background and operation of Zonamerica.

The delegation heard that, according to the World Value Survey, Uruguay and Canada reside closer to each other in terms of shared values than Uruguay does with its regional neighbours in South America. These values included a shared attachment to democracy, freedoms and political rights, transparency, freedom of the press and political stability.

Further, the delegation was told that, according to evaluations done by the Economist Intelligence Unit in 2018, Uruguay and Canada share similar attitudes and opinions on electoral processes, pluralism, the functioning of government, political participation, political culture and civil liberties.

The delegation heard that the Zonamerica campus is composed of 30 buildings, housing 350 companies and 10,000 total employees. Zonamerica produced 1.8% of Uruguay’s gross domestic product (GDP) in 2017 and had an estimated economic benefit or spillover to the rest of the country calculated at about 30% of its GDP. Companies operating in Zonamerica included those in financial services, information technology, call centres, professional services, biotechnology, distribution, light manufacturing and assembly, and pharmaceuticals.

The delegation heard that the first free economic zone was established in 1923. At that time, bullfighting was banned and the government used the land previously used for the bullfighting arena to create the country’s first free economic zone. Zonamerica was established in 1990. Currently, about 12 free economic zones operate throughout Uruguay. The delegation heard that the allure for companies to operate out of a free economic zone in Uruguay include the exemption from taxes for all goods and services produced in the zone, the high quality of life in Uruguay, the abundance of skilled local workers, economic freedom, and a vibrant democracy.

Respectfully submitted,

Hon. Robert Nault, P.C., M.P.
Chair
Canadian Section of ParlAmericas