CIDA in hotseat over wine and lingerie

OTTAWA — A foreign aid program that gave a big Niagara winery $108,000 to study icewine prospects in China is being reviewed by the Harper government.

The same business partnership program handed over $103,000 to a Montreal company to run a sewing factory in China that makes women’s sleep wear and lingerie.

Critics have questioned why the Canadian International Development Agency (CIDA) still sends aid to one of the world’s emerging economic superpowers.

The agency’s industrial co-operation program, which matches Canadian companies with job-creating partners overseas, has been an especially broad target for skeptics and auditors.

And federal officials are asking if it’s the best use of funds desperately needed in the world’s poorest countries.

“We want to make sure that our aid dollars bring results — maximum results,” said Jean-Luc Benoit, spokesman for International Development Minister Bev Oda.

“If this program either needs to be overhauled or moved somewhere else, that’s what we’ll do.”

A decision is expected in the spring, Benoit said.

“Accountability is one of the priorities of this government.”

That said, Benoit acknowledged that the Statistical Report on Official Development Assistance — which details more than $4 billion a year in federal aid spending, including the program in question — has not been publicly updated since 2005-06.

“I was as surprised as you were when I saw that,” he said in an interview.

Oda’s department now says the report for 2006-07 will be released in six weeks. Officials blamed the delay in part on the need to gather information from various third-party agencies.

That explanation didn’t sit well with Gerry Barr, head of the Canadian Council for International Co-operation. The council includes 100 volunteer organizations working to cut global poverty.

“Plainly, a statistical report is needed and can be done,” he said. “Other global agencies like CIDA, working with exactly the same international partners, are able to do it in significantly less than 12 months following the end of their fiscal years.”

As for the business-partnership program, Barr cited a wince-worthy audit that was quietly posted on the agency’s website just over a year ago.

It found that from the program’s inception in 1978 until 2005, Canadian firms received $1.1 billion for just under 4,000 proposed projects. Of those, 972 projects — about one-quarter — got off the ground.

More stringent federal paperwork demands cut proposals in half over the years but didn’t lift success rates, the audit found.

It looked at 721 projects in 22 countries — including Algeria, Brazil, China, Mexico and Thailand — between 1997 and 2002. Of those, the evaluation team found that just 112 or 15 per cent actually did business.

Companies generally weren’t required to repay federal cash unless two conditions were met: the contribution exceeded $100,000 for the same project, and if the recipient or related companies landed contracts or made export sales of at least $5 million.

CIDA publicly claimed that the program drew investments worth more than $10 billion into recipient countries and racked up sales of Canadian goods worth $6 billion.

“Updated figures have not been provided and the evaluation team was not in a position to confirm these numbers,” said the audit dated December 2007.

Nor were there solid reports on the number of poverty-cutting jobs the program was supposed to create.

Private-sector development can be an excellent weapon to fight poverty, Barr said. “But the point is that it has to be done well and effectively.”

Charles Pillitteri, son of former Liberal MP Gary Pillitteri, says his winery in Niagara-on-the-Lake, Ont., applied to the program after his father left politics. The vineyard is billed as one of the largest icewine producers in the world.

Pillitteri Estates received $108,263 over two years ending last year to study the potential for a joint icewine venture in Xinjiang, an autonomous region of northwestern China.

“The CIDA program actually went very well,” Pillitteri said in an interview.

He can understand the skepticism raised by the program’s track record. Byzantine paperwork and dealing with an entirely different culture half a world away are likely deal-breakers for firms not committed to the long haul, he said.

But Pillitteri says his company has spent many times the amount of federal cash it received and will exceed its proposal to create 30 full-time jobs in China.

“You can’t look at the CIDA program as a handout. It’s not a handout. It’s an investment. The government of Canada is investing with me to expand the markets for Canadian business but also to expand Canadian lifestyle, passion, ethics and human rights.

“There’s value in all of that.”