Export Development Canada - Brochure

A TRUSTED PARTNERin Trade for CanadaEXPORT DEVELOPMENT CANADA2EDC AT A GLANCETABLE OF CONTENTS02 EDC AT A GLANCE04 EDC – WHO WE ARE05 CHAIRMAN AND PRESIDENT07 EDC’S PARTNERS08 EDC’S TRADE SOLUTIONS10 EDC AND CORPORATE SOCIAL RESPONSIBILITY12 HELPING EXPORTERS – HELPING CANADA13 EDC’S SMALL BUSINESS SERVICES14 EDC IN EMERGING MARKETS16 EDC’S REPRESENTATION ACROSS CANADA AND ABROAD17 FREQUENTLY ASKED QUESTIONS18 FOR MORE INFORMATION Who We Are Export Development Canada (EDC) is a Crown corporation and Canada’s official Export Credit Agency. Mandate To support and develop, directly or indirectly, Canada’s export trade and Canada’s capacity to engage in that trade, and to respond to international business opportunities. In March 2009, EDC’s mandate was extended through Canada’s Economic Action Plan to enable it to engage in trade-related domestic activity for two years. In March 2011, these temporary powers were extended until March 2012. Organization Headquartered in Ottawa, EDC has 17 Canadian regional offices: › Vancouver › Edmonton › Regina › Calgary › Winnipeg › Windsor › Toronto › Mississauga › London › Ottawa › Montreal › Quebec City › Ville St. Laurent › Drummondville › Halifax › Moncton › St. John’sEDC also has 16 representations abroad in: › Chile › Peru › Russia › Singapore › United Arab Emirates › Brazil (2) › China (2) › India (2) › Mexico (2) › Turkey › Panama › GermanyA TRUSTED PARTNER IN TRADE FOR CANADA 32010 Results › $84.6 billion of facilitated business: $24.7 billion in emerging markets, $8.9 billion to SMEs, $3.4 billion in domestic support; › The business EDC facilitated helped generate $63 billion of Canadian GDP, about 4.9% of total GDP and supported 627,000 jobs; › Net income was $1.53 billion; and › $350 million dividend to the Government of Canada. ProductsEDC’s financial services include: › loans to foreign companies looking to buy goods and services from Canada; › working capital loans to Canadian companies with export contracts; › loans and insurance to help Canadian companies invest abroad; › guarantees to banks, making it easier for them to lend to Canadian companies; › insurance to protect Canadian companies against a variety of risks, including non-payment; › bonding services to help Canadian companies guarantee their performance; and › equity solutionsEDC is also a recognized leader in financial reporting and economic analysis. EDC’s 2010-2014 Corporate Plan and 2009 Annual Report were recognized as best produced by a large federal Crown Corporation by the Canadian Institute of Chartered Accountants in November 2010.CustomersIn 2010, EDC served 8,236 Canadian companies in 186 markets. FundingEDC is financially self-sustaining. It operates on commercial principles collecting interest on its loans and premiums on its insurance products. EDC does not receive annual parliamentary appropriations.EXPORT DEVELOPMENT CANADA4EDC – WHO WE AREExport Development Canada (EDC) is a Crown corporation owned by the Government of Canada. As an instrument of public policy, EDC’s activities support and are aligned with the government’s international commerce agenda. EDC has been facilitating the international business activities of Canadian companies both large and small, in every industry across the country for more than 66 years and has facilitated more than $950 billion in export and investment activity. More than 80 per cent of EDC’s customers are small- and medium-sized companies and more than 25 per cent of its annual activity is in emerging markets.As a customer-centric organization, EDC is focused on being a trusted partner to its customers, using its knowledge and understanding of clients’ needs to deploy innovative solutions and deliver real value. EDC plays a critical role in helping companies successfully compete in the global economy. The corporation’s expertise in risk management, its relationships with domestic and international partners and its commitment to sound financial management have enabled EDC to deliver valuable services to its customers while strengthening Canada’s financial and economic capacity, particularly with respect to its trade performance.A TRUSTED PARTNER IN TRADE FOR CANADA 5CHAIRMAN AND PRESIDENTChairman of EDC’s Board of DirectorsJim Dinning is the chair of Export Development Canada and the Western Financial Group (WES-T). He is chair and director of a number of public and private companies and not for profit organizations. Previously, Mr. Dinning held key positions during his 11 years as a member of the legislative assembly in Alberta, including a term as provincial treasurer from 1992 to 1997. Subsequently, he served as executive vice president of TransAlta Corporation.Mr. Dinning is a graduate of Queen’s University with a Bachelor of Commerce and a Masters in Public Administration. He received an honorary Doctor of Laws degree from the University of Calgary in 2002. In June of 2010, Jim was elected the twelfth chancellor of the University of Calgary and also serves as the Chair of Canada West Foundation.President and Chief Executive Officer Stephen Poloz was appointed President and Chief Executive Officer in January 2011, after nearly 30 years of public- and private-sector experience in financial markets, forecasting and economic policy. He joined Export Development Canada (EDC) in 1999 as Vice-President and Chief Economist, and in 2004 was promoted to Senior Vice-President, Corporate Affairs and Chief Economist, which added responsibility for Corporate Planning, Communications, Government and International Relations, Engineering, Corporate Social Responsibility and Corporate Research. From 2008 to 2010 he was Senior Vice-President, Financing, with responsibility for all of EDC’s lending programs, in addition to the Economics and Corporate and International Trade Intelligence groups. Prior to joining EDC, Mr. Poloz spent five years with Montreal-based BCA Research, and fourteen years with the Bank of Canada in Ottawa. He has been a visiting scholar at the IMF in Washington, and at the Economic Planning Agency in Tokyo. He has also served as the President of the Ottawa Economics Association.Mr. Poloz holds a PhD and an M.A. in economics from the University of Western Ontario, and a B.A. (Honours) in economics from Queen’s University. He is a Certified International Trade Professional and a graduate of Columbia University’s Senior Executive Program.Jim DinningStephen S. PolozEXPORT DEVELOPMENT CANADA6Accountability EDC reports to Parliament through the Minister of International Trade and is governed by the Export Development Act, the Financial Administration Act, the Corruption of Foreign Public Officials Act, the Public Servants Disclosure Protection Act, and the Federal Accountability Act. EDC conducts its business in a manner that respects applicable international agreements to which Canada is a party that is consistent with its Corporate Social Responsibility (CSR) commitments and that ensures the sound financial management of its activities. At EDC, CSR is an operating principle that guides all of our business decisions and enables us to build public confidence and trust in what we do to facilitate Canada’s international trade.EDC is a signatory to the Equator Principles, a financial industry benchmark for determining, assessing and managing social and environmental risk in project financing. Adopting the Equator Principles reflects EDC’s ongoing commitment to conduct its international business in a socially and environmentally responsible manner and confirms the strength of its existing CSR policies. Every 10 years, the Government, through parliamentary procedures, conducts a legislative review of the Export Development Act which governs EDC’s mandate and legal framework to ensure it meets the evolving needs of Canada’s exporters and investors in the global marketplace.EDC is also required by legislation to submit to Parliament annually a report on its operations, as well as a summary of its five-year Corporate Plan and Budget.The Auditor General of Canada is EDC’s auditor and conducts annual reviews, as well as conducting a Special Examination every five years.A TRUSTED PARTNER IN TRADE FOR CANADA 7EDC’S PARTNERSPublic Sector Partnerships EDC and the Department of Foreign Affairs and International Trade (DFAIT) are important players in helping the Government of Canada strengthen Canada’s trade capacity. Operating at different points along a continuum, EDC and DFAIT’s Trade Commissioner Service work together to promote international trade and provide support to Canadian companies. EDC’s activities in support of Canadian companies are enhanced by its relationships with other Crown corporations including the Business Development Bank of Canada (BDC), Farm Credit Canada (FCC) and the Canadian Commercial Corporation (CCC). By leveraging relationships with these organizations, EDC is able to present a wider variety of solutions to meet the needs of Canadian companies, better positioning them for success.Through greater information sharing, collaboration and joint activities, EDC is a key player in the larger Canadian team. Private Sector PartnershipsWhenever possible, EDC seeks to partner with the private sector to leverage the complementary capabilities of other service providers and offer better overall service and capacity to Canadian businesses. Through the expansion of EDC’s network with the Canadian financial industry, the corporation is better able to serve a wider range of companies across the country. EDC’s ability to meet the needs of Canadian global businesses is dependent on its strong relationships with public and private sector partners. Partnership is a longstanding priority for the corporation, and allows EDC to leverage information and expertise from government departments, financial institutions and other Crown Corporations. By leveraging our respective capacity, expertise, ideas and business networks, EDC has been able to enhance overall market capacity and ensure that more Canadian companies have access to the support they need. In 2010, EDC saw record partnership volumes and number of transactions. In fact, partnership volume exceeded target by 65 per cent and the number of transactions increased by 10 per cent.EXPORT DEVELOPMENT CANADA8EDC’S TRADE SOLUTIONSEDC’s business strategy is framed around strengthening Canada’s economic and financial capacity within a trade-focused mandate by being a trusted partner with Canadian exporters and investors, financial institutions both in Canada and around the world, foreign buyers of Canadian goods and services, and with its shareholder, the Government of Canada.EDC works with Canadian companies or partners with their financial institution to provide additional credit. EDC provides customers with both the market intelligence they need to make informed business decisions and the insurance and financial solutions they need to support and grow their international sales and investment activities by:PROTECTING FOREIGN RECEIVABLES EDC can offer insurance solutions that will meet the needs of Canadian companies and protect them against a wide range of risks, including: › protecting single contract sales or covering entire books of receivables;› providing coverage for foreign affiliates;› providing coverage for commercial and political risks;› providing better payment terms and credit options; and› freeing up operating lines with their financial institutions.GETTING THE FINANCING YOUR CONSTITUENTS NEED EDC financing solutions can help Canadian companies by providing their foreign customers with medium- or long-term financing for larger sales to providing them with working capital support for export sales and foreign investments including financing for:› growing their international sales;› breaking into new markets;› financing export- and investment-related capital needs; and › financing and insuring investments in foreign markets, including equity investments in support of next generation Canadian exporters and investors.A TRUSTED PARTNER IN TRADE FOR CANADA 9FREEING UP YOUR CONSTITUENTS’ OPERATING LINESWith EDC’s wide range of bond and guarantee solutions, companies can free up their operating lines and cash flow to keep their businesses running smoothly. Solutions include:› getting a performance bond without affecting their operating line of credit; › protecting against a fluctuating dollar with EDC’s Foreign Exchange Facility Guarantee; and› obtaining a line of credit or other financing from a foreign bank.It is important to note that all of the companies EDC supports under its corporate account have viable business plans, and the financial services provided are on commercial terms. EDC does not provide subsidies of any kind to any industry.EDC is committed to providing solutions that meet the changing needs of Canadian exporters and investors as trusted partners. An integral part of that commitment is to work in close partner- ship with Canadian companies’ financial institutions and other public institutions, such as the Business Development Bank of Canada and the Canadian Commercial Corporation, so that together we can create more credit capacity and help your constituents grow their export business.EXPORT DEVELOPMENT CANADA10EDC AND CORPORATE SOCIAL RESPONSIBILITYCorporate Social Responsibility (CSR) means more than compliance with legal standards; it is an underlying principle which guides EDC’s activities. CSR is a key component to realizing our goal as a trusted partner to our financial services peers and customers. We do this not just by promoting international trade and investment, but by promoting responsible international trade and investment.Striking the right balance between meeting the expectations of Canadians while maintaining a level playing field for Canadian exporters is a priority for us. EDC continues to strengthen its CSR practices in keeping with evolving international standards to help guide its business in a manner that promotes the reputation and credibility of Canadian companies. In doing so, EDC draws on the collective experience of the distinguished Canadians who comprise our Advisory Council on CSR. EDC also consults regularly with NGOs and our international partners to incorporate emerging best practices into its due diligence processes.Ethics and Transparency EDC is committed to safeguarding business integrity through our Code of Conduct which guides all employees and Board members on CSR principles. EDC’s anti-corruption program builds awareness of Canadian laws and international conventions and requires customers to submit anti-corruption declarations and accept covenants to ensure EDC does not support improper transactions. Since 2001, EDC has a disclosure policy that calls for details to be posted on our website on any transaction that falls under our financing, guarantee, political risk insurance (to lenders) and equity programs. In 2010, EDC took steps to increase transparency of its business. The new Environmental and Social Risk Management Framework provides for the disclosure of more information on projects with a high potential for environmental and social impacts (Category A), including the rationale for support and the relevant environmental and social issues reviewed.Human Rights Performance EDC recognizes its responsibility to assess potentially adverse human rights outcomes and to consider such assessments in determining whether to provide support. In 2009, EDC introduced a standardized human rights impact assessment process to objectively determine whether and the degree to which a human rights impact assessment is required. EDC also participates in the work of Dr. John Ruggie, Special Representative of the United Nations Secretary General, on business and human rights. Following the release of Dr. Ruggie’s final report and in view of the continuing evolution in international standards for assessing human rights impacts, EDC will continue to review its present human rights risk assessment practices and adjust them, taking into account the new gains in this emergent field.A TRUSTED PARTNER IN TRADE FOR CANADA 11Environmental PerformanceEDC conducts environmental reviews and analyses of transactions prior to commitment. EDC participation reliably indicates that environmental and social risks will be managed according to international standards and is widely viewed as an added value, beyond the financial support itself. In addition, EDC’s ongoing monitoring ensures that projects approved continue to meet international environmental standards. In 2010, EDC took the first step towards developing a climate change strategy. EDC’s new Environmental and Social Risk Management Framework requires sponsors of Category A projects to provide greenhouse gas emissions data in their environmental and social impact assessments. Additionally, EDC plans to engage more with clients on this issue, in order to better understand and assess carbon and climate risks and opportunities associated with their business. EDC continues to seek opportunities to support the environmental export sector.Social Performance At EDC, we invest in the communities where we live and work, as well as in emerging markets where EDC customers are active. EDC helps to deepen employees’ involvement through its Charitable Donations Program, as well as through a program that allows employees two days of company-paid time to dedicate to the charity of their choice. As well, EDC and CARE Canada have set up a joint, four-year Global Community Investment Initiative. EDC employees are deployed internationally to work with local companies to develop their businesses, capitalize on opportunities and increase profitability. EXPORT DEVELOPMENT CANADA12HELPING EXPORTERS – HELPING CANADABy providing the financing and insurance solutions that Canadian exporters and investors need to compete on the global stage, we also help our economy prosper here at home. Canada is a trading nation and our job is to enhance Canada’s trade performance.Canadian Benefits Scorecard 2007 2008 2009 2010Total Volume Facilitated ($ billion) Percentage of Canadian Exports Facilitated70.0 1485.8 1482.8 1884.6 19SME – Number Served SME – Volume ($ billion)6,204 18.86,866 17.86,886 20.46,628 8.9Volume in Emerging Markets ($ billion) 16.8 22.0 18.7 24.7Estimated Contribution to Canada’s GDP ($ billion) Estimated Contribution to Canada’s GDP (percentage)51.5 4.259.3 4.461.0 5.063.4 4.9Number of Jobs Supported Percentage of National Employment578,434 3.4572,523 3.3642,465 3.8627,704 3.7As global commerce has evolved, so has our Canadian benefits policy. The framework EDC uses today not only takes into account the Canadian content of an export, it also recognizes the beneficial effects of research and development spending, securing a world product mandate, or participating in the supply chain of a multinational company.All of the business facilitated by EDC is reviewed to ensure it brings tangible benefits to Canada. The Canadian Benefits Scorecard below presents EDC’s key measures of performance. By facilitating the exports and investments of Canadian companies, EDC helps to grow Canadian businesses, create Canadian jobs and contribute to the economic growth of our country.A TRUSTED PARTNER IN TRADE FOR CANADA 13EDC’S SMALL BUSINESS SERVICESEDC focuses on serving the needs of Canadian companies, particularly small- and medium-sized businesses (SMEs), and emerging markets. In 2010, EDC supported 8,236 companies through the global economic downturn. Of these customers, 6,628 were SMEs. Understanding and meeting the challenges facing Canadian exporters and investors continues to be a high priority for EDC. We are committed to helping Canadian companies of all sizes develop into bigger and more successful players in the global marketplace. Flexibility, security and access to capital are just some of the benefits of EDC’s small business credit insurance. A TEAM OF SMALL BUSINESS SPECIALISTS AT EDC CAN HELP CANADIAN COMPANIES PROTECT AND GROW THEIR INTERNATIONAL SALES BY: › protecting a Canadian company’s sales whether they need insurance for one sale or project or multiple contracts; › financing a customer’s sales through our Export Guarantee Program while providing their financial institution with a risk-sharing guarantee to encourage them to give a company access to more working capital; › financing work in progress and inventory; › financing ongoing export-related working capital needs; › financing the purchase of equipment or other expenses; › providing support for those looking to expand their business by making business investments outside Canada; › financing a customer with a direct loan to help support specific export contracts; and › providing a customer’s financial institution with a guarantee which covers them up to 100 per cent if a customer makes a wrongful call which in turn frees up working capital.EXPORT DEVELOPMENT CANADA14EDC IN EMERGING MARKETSSince 1997, EDC has been establishing foreign representations in key emerging markets, providing on-the-ground knowledge and business expertise to help Canadian companies expand into new markets. As Canadian companies are increasingly being drawn to emerging markets for their exports and investments, EDC has seen a rapid increase in the need for its services in these strategic locales. In 2010, EDC facilitated $24.7 billion in 147 emerging markets.In this globalized economy, economists and investors forecast that the next decade will belong to key emerging economies. There continues to be a small but steady shift to greater market diversification outside the United States. Given that Canada is a trade-dependent nation, Canadian business will need to accelerate their activities in these markets in the coming years in order to stay on a level playing field with their competitors. Understanding the financial and procurement needs of foreign buyers and borrowers in emerging markets enables EDC to anticipate requirements for Canadian goods and services, identify opportunities for investment, and offer financial solutions that benefit Canadian companies.A TRUSTED PARTNER IN TRADE FOR CANADA 15Successfully navigating riskier emerging markets requires a deeper understanding of each region’s unique risks and the risk management options. EDC’s expanded business volumes in countries where we have foreign representation support this. That is why markets such as Brazil, Russia, India, China and Mexico are priority markets for Canadian companies particularly because of their growth rates, importance to global supply chains and alignment with Canada’s strengths.EDC continues to expand its global network of representations to deepen its long-term relationships with foreign buyers and borrowers – the key customers of Canadian exporters and investors in these opportunity-rich markets.EXPORT DEVELOPMENT CANADA16EDC’S REPRESENTATION ACROSS CANADA AND ABROADThe strengthening of EDC’s regional business development capacity allows EDC to be more accessible to its customers across Canada and enables the corporation to provide more timely service to Canadian companies. Through the knowledge and relationships developed both within our networks across Canada and representations around the world, EDC is working to strengthen Canada’s trade performance.EDC Offices in CanadaEDC has 17 offices across Canada staffed with trade experts who can assist your constituents with their trade requirements and help them identify relevant trade-finance solutions that best suit their needs. Please refer to the EDC at a Glance section (page 2) for a list of locations.As a trusted partner, EDC continues to maintain and broaden its regional network in Canada to ensure it better understands the needs of your constituents who are engaged in or are interested in trade while focusing on its relationship with the company, their customers and their financial partners.EDC Representations AbroadEDC’s network also extends far beyond Canadian borders. A list of EDC’s foreign representations can be found in the EDC at a Glance section (page 2). Operating in 16 representations in 12 countries around the world, EDC’s global trade experts represent a diverse, multilingual group workforce, seeking to open new markets and new opportunities for EDC and its customers. EDC’s on-the-ground market knowledge helps Canadian exporters diversify their business. Through our local expertise and matchmaking opportunities, we can help Canadian companies break into new developed and emerging markets.Relationships may be founded on transactions, but they are built and maintained by collaborating and developing meaningful business solutions face to face. Our international representatives can help your constituents develop these in-market relationships so that they can pursue investment opportunities and enter into global supply chains.A TRUSTED PARTNER IN TRADE FOR CANADA 17Q. DOES EDC FUND ITS OPERATIONS WITH TAXPAYERS’ DOLLARS? No. EDC is a financially self-sustaining Crown corporation and does not receive annual appropriations from Parliament. EDC charges interest on its loans and premiums on its insurance services. Q. DOES EDC REPORT TO PARLIAMENT? Yes. EDC reports to Parliament through the Minister of International Trade. EDC’s Annual Report and Corporate Plan Summary are tabled in Parliament and the Auditor General of Canada is its auditor.Q. WHAT DOES EDC DO WITH ITS PROFITS? EDC’s profits are reinvested into retained earnings to strengthen its financial capacity for taking on more business. Since December 2006, EDC has paid $950 million in dividends to the government.Q. DOES EDC OFFER PREMIUMS AT LOWER RATES BECAUSE OF ITS CROWN CORPORATION STATUS? No. EDC’s premiums are on average priced higher than Canadian private-sector insurers. EDC competes on the basis of service and coverage and not price.Q. WHY DOESN’T EDC CONCENTRATE ON TRANSACTIONS THAT THE COMMERCIAL FINANCIAL INSTITUTIONS CANNOT TAKE ON? It is difficult to remain self-sustaining and be a lender or insurer of last resort. If EDC took on only those transac-tions that were too risky for commercial institutions, it would operate at a deficit and require taxpayer support for its operations.FREQUENTLY ASKED QUESTIONSQ. DOES EDC HAVE A MONOPOLY IN THE CREDIT INSURANCE MARKET? No. EDC works in partnership with private-sector insurers to fill market gaps in order to grow the market in Canada and help the private sector maintain and build relationships with their clients and prospects. Q. DOES EDC PUBLICLY DISCLOSE INFORMATION ON THE TRANSACTIONS IT SUPPORTS? EDC operates in a manner similar to a bank or insurance company and does not disclose commercially confidential information. Since October 2001, EDC has a disclosure policy that calls for details to be posted on its website on any transaction that falls under EDC’s financing program, including guarantees, political risk insurance to lenders and equity transactions. In 2010, EDC took steps to increase transparency of its business. The new Environmental and Social Risk Management Framework provides for the disclosure of more information on projects with a high potential for environmental and social impacts (Category A), including the rationale for support and the relevant environmental and social issues reviewed.Q. HOW DOES EDC ENSURE THAT PROJECTS IT SUPPORTS DO NOT HAVE NEGATIVE ENVIRONMENTAL AND HUMAN RIGHTS IMPACTS? EDC has a responsibility to assess the potential adverse environmental and human rights effects on communities impacted by projects involving EDC and has a rigorous due diligence process for doing so prior to its involvement in a project. EDC continues to look to enhance its human rights impact assessments in keeping with international best practices. The corporation is a strong proponent of the UN’s Representative, John Ruggie, and his study on the rapid evolution in the development of international standards for assessing human rights impacts. EDC continues to work with Mr. Ruggie and will be reviewing and revising our practices accordingly.www.edc.caEDC is the owner of trademarks and official marks. Any use of an EDC trademark or official mark without written permission is strictly prohibited. All other trademarks appearing in this document are the property of their respective owners. The information presented is subject to change without notice. EDC assumes no responsibility for inaccuracies contained herein. Copyright © 2011 Export Development Canada. All rights reserved.FOR MORE INFORMATIONCe document est également disponible en français.Members of Parliament and staff can contact EDC’s Planning and Government Relations team for further information or to request an EDC briefing:Judy Casselman Morgan Wells Etienne GrallParliamentary Relations Parliamentary Relations Directorjucasselman@edc.ca mwells@edc.ca Planning and613-598-2583 613-597-7936 Government Relations egrall@edc.ca 613-597-8513 EDC AT A GLANCE EDC – WHO WE ARE CHAIRMAN AND PRESIDENT EDC’S PARTNERS EDC’S TRADE SOLUTIONS EDC AND CORPORATE SOCIAL RESPONSIBILITY HELPING EXPORTERS – HELPING CANADA EDC’S SMALL BUSINESS SERVICES EDC IN EMERGING MARKETS EDC’S REPRESENTATION ACROSS CANADA AND ABROAD FREQUENTLY ASKED QUESTIONS FOR MORE INFORMATION