Export Development Canada

Export Development Canada (EDC) is Canada’s export credit agency. The Corporation offers financial services, insurance and bonding products, as well as analyses of global markets and economic conditions to help Canadian exporters and investors expand their international business. As a Crown corporation EDC is wholly owned by the Government of Canada and is financially self-sustaining.

EDC’s Mandate

EDC’s mandate is to grow and develop Canada’s trade, and the capacity of Canadian companies to participate in and respond to international business opportunities. Approximately 80 per cent of EDC’s customers are small- and medium-sized businesses. EDC also works in partnership with other government agencies and the private sector to increase the competitiveness and success of Canadian companies abroad.

Recently, the Government of Canada temporarily expanded EDC’s mandate to enable the Corporation to provide its financing, bonding and insurance services, in partnership with private sector financial institutions, to the domestic market.

Working in Canada’s interests
Since EDC was founded in 1944, it has facilitated more than CAD 780 billion in exports and foreign investment by Canadian companies. When participating in a transaction, EDC always considers its potential benefit to Canada and takes into account factors such as:  

• research and development potential
• number of start-up firms created
• employment growth
• quality of jobs created
• market share growth (particularly for new products or technologies)
• potential for small and medium sized business growth

In 2008, EDC served 8,312 customers and facilitated $85.8 billion in exports and investments in 184 markets. This business during 2008 helped generate $57.8 billion of Canadian GDP, about 4.4% of GDP, and supported 572,000 jobs. Since 2002, EDC has paid $695 million in dividends to the Government of Canada.

EDC’s Response to the Credit Crunch

EDC’s Financial Flexibility

Recognizing that companies need additional financial resources of the type EDC provides, the Government increased EDC’s financial flexibility in the 2009 Budget, by increasing the limit for paid-in capital to $3 billion from $1.5 billion. This permits the Government to inject more capital into EDC if needed.

As well, it has increased EDC’s limit for contingent liability to $45 billion from $30 billion. This gives EDC more room to issue insurance and guarantees.

The Government also increased the limit for Canada Account to $20 billion from $13 billion to enable it to provide additional support to business. The Canada Account is used by the Government to support transactions that are deemed to be in the national interest but that fall outside of EDC’s capacity in some measure.

These measures give EDC the flexibility to adapt to the evolving needs of Canadian companies and to develop solutions in partnership with financial institutions. EDC will continue to respect commercial principles in the business it supports using these powers.

Expanded mandate to serve the domestic market
During this credit crunch, the Government of Canada has temporarily broadened EDC’s mandate and scope of activity for two years to enable the Corporation to provide its financing, bonding and insurance services, in partnership with the private sector and Business Development Bank of Canada (BDC), to the domestic market. This measure will add much-needed capacity to the Canadian financial system to help Canadian companies get credit during these exceptional times, so that they can remain viable and grow, both at home and abroad.

Under the recent changes to its mandate, EDC can now provide services to the domestic market, including:

• Re-insurance to credit insurers on their domestic coverage;
• Re-insurance and guarantees to the surety industry on domestic bonding; and
• Loans and guarantees with banks to Canadian companies for domestic financing

EDC is expanding its products to the domestic market in a manner that complements the products and services of the private sector. Working with private financial institutions is the fastest way for EDC to get its extra capacity into the market and be available to help Canadian business. 

For details on how EDC is adding capacity to the domestic surety, bonding and credit insurance market, please visit www.edc.ca

Business Credit Availability Program (BCAP)
EDC is also working with private financial institutions and BDC to develop ways to collaborate and bring capacity to the market through the Business Credit Availability Program (BCAP). The BCAP initiative enables all partners to identify and share market information, bring forward and triage transactions that require additional capacity from EDC and/or BDC. For more information, please go to www.edc.ca