EDC: Positive Signs For Canadian Exporters

In 2008, Export Development Canada (EDC) undertook the most business in its corporate history, and the business we facilitated helped support well over half a million jobs in Canada.

In fact, exports maintain one out of five jobs in Canada and generate a quarter of our national income. Together with imports and investments abroad, trade represents about 70% of our total gross domestic product.

But 2008 also presented us with new challenges. The global financial crisis that began last fall showed the world what real financial risk could mean to our businesses, our jobs, our confidence.

With traditional credit a scarce commodity, EDC was suddenly cast into a new role: our mandate and scope of activity has been broadened for a two-year period so that we can help Canadian companies overcome domestic business challenges.

We can now apply our financing and credit insurance programs to a wide range of Canadian domestic activities, in co-operation with the private financial sector and Business Development Bank of Canada.

So far, initiatives launched under EDC’s new domestic powers will add a total of $3 billion to the Canadian credit market, allowing private financial institutions to do more for their customers and take on new business.

EDC’s core business is still about developing and expanding Canada’s international trade — getting more companies trading globally or trading and investing more in new markets.

This is a key part of our solution to the credit crunch, because the more we can help companies diversify their business opportunities, the less they are limited by the conditions in Canada, the U. S. or any other single country.

Emerging markets are set to outperform average world growth this year — and will certainly outperform our biggest trading partner, the United States.

And while no one can predict when or how the economy will get back on track, there are some positive signs for Canadian business in the latest EDC numbers. Already this year, we have facilitated $22.5 billion in business on the part of Canadian companies, rising just above our volume at this time last year. Seen against the 22% decline in Canadian exports that our chief economist Peter Hall is forecasting this year, this strong demand for our services is even more noteworthy.

Our export business volume in emerging markets — especially Brazil, Russia, India, China and Mexico — tells a similar story. It reached nearly $5.6 billion in the first four months of this year. That’s tracking about the same as our results at this time last year, in spite of today’s more troubled economy.

What this means is that Canadian exporters and investors are not sitting still and waiting for trade in the United States to revive.

As painful as it is, this credit crunch will pass — the first step towards a broader economic recovery. Meanwhile, EDC is helping position Canadian businesses for recovery, so that we can all focus on unleashing our trade potential in an increasingly interconnected world.

— The author is president and CEO of Export Development Canada (www.edc.ca),a Crown corporation that provides financing, insurance and risk management solutions to help Canadian exporters and investors expand their international business.