(OTTAWA) – February 25, 2010 – Export Development Canada (EDC) today announced total business volume of $82.8 billion with a record 8,469 Canadian companies, despite a 24 per cent decline in Canadian exports in 2009.
"The recession and credit crunch constrained the capacity of financial institutions to fully support Canadian companies, triggering an increase in demand for our financial products in the last quarter of 2008 and throughout 2009," said Eric Siegel, President and CEO of EDC.
Last year, the Government of Canada asked EDC to increase the availability of domestic credit to Canadian businesses during the credit crunch. Working closely with private Canadian banks, Business Development Bank of Canada (BDC), credit insurers and sureties, EDC increased its capacity to serve Canadian businesses during the downturn, adding $2.5 billion in credit to the Canadian domestic market when it was needed most.
EDC's domestic activities directly helped 208 companies with their trade-related business in Canada during 2009. EDC will continue to support domestic transactions for the duration of its domestic powers. In addition, EDC increased the amount of business volume conducted in partnership with Canadian banks, BDC, sureties and other financial institutions both in Canada and internationally by 20 per cent, reaching $16.9 billion.
EDC's emerging market business volumes reached $18.7 billion, a decline of 15 per cent compared to 2008 but less than the overall decline in Canadian exports. Similarly, EDC's business volume for Canadian Direct Investment Abroad was $4 billion, a decline of 15 per cent compared to 2008.
EDC continued to expand its regional presence in Canada, bringing its services closer to the exporting community and to its strategic partners clustered in exporting regions, with new offices in Ville St. Laurent and Drummondville. EDC now has 17 offices across Canada. EDC also grew its international network with a new permanent representation established in Lima, Peru to serve exporters to the Andean region, bringing its number of international representations to 14.
EDC's net income for 2009 was $258 million, an increase of $52 million from 2008. The key components affecting net income were an increase in net financing and investment income and an increased provision for credit losses. The increase in net financing and investment income in 2009 was due to lower interest expense. This was because investor preference for securities issued by higher-quality entities during the credit crunch enabled EDC to borrow at more favorable rates. EDC recorded a provision for credit losses of $431 million in 2009, an increase of $85 million over 2008 as a result of credit deterioration in our loan portfolio.
Other key financial results include:
- EDC provided $4.5 billion in commercial financial solutions to Canada's auto sector, including $3.2 billion in Accounts Receivables Insurance (ARI) and $1 billion in financing;
- EDC provided $16 billion in commercial financial solutions to Canada's forestry sector (lumber, pulp and paper), including $15 billion in ARI and $870 million in financing;
- EDC's assets decreased by 6.7 per cent to $32.9 billion from December 31, 2008, as a result of a stronger Canadian dollar;
- The total allowance for loan-related losses and insurance claims was $3.2 billion as of December 31, 2009;
- Total paid-in capital, retained earnings (including other accumulated comprehensive income) and allowances at December 31, 2009 were $9.8 billion;
- Impaired loans as a percentage of gross loans receivable increased from 2.9 per cent at the end of 2008 to 3.4 per cent as at December 31, 2009;
- The number of insurance claims paid was 2,339, a 59 per cent increase from 2008. The dollar value of those claims was $258 million compared to $104 million in 2008; and
- Administrative expenses increased by three per cent to $246 million from $240 million in 2008.
Last year also included several endorsements by the Government of Canada of EDC's operating model and management practices, including:
- a strong endorsement of EDC's mandate and business model following the Government's mandatory 10-year Legislative Review, which concluded in 2009. The Government noted that EDC is playing a critical role in facilitating Canada's capacity to compete and succeed internationally;
- following a special examination concluded in 2009, the Auditor General of Canada (OAG) noted that EDC "had the key elements of good governance framework" and a "sound corporate planning process that provides clear direction for its activities"; and
- a June 2009 review of EDC's Environmental Review Directive (ERD) by the OAG found that the corporation's environmental policies reflected international best practices.
EDC is Canada's export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business. EDC's knowledge and partnerships are used by more than 8,400 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining, a recognized leader in financial reporting and economic analysis, and has been named one of Canada's Top 100 Employers for nine consecutive years.
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Media contacts:
Phil Taylor
Export Development Canada
Tel: 613.598.2904
BlackBerry: ptaylor@edc.ca
