March 21, 1990
It contributes to the Third World’s debt and to the destruction of the Third World’s environment. It provides handouts to Canadian corporations, and administers a multi-billion dollar federal government pot called the “Canada Account,” which provides still more handouts and contributes to our own deficit. It acts so irresponsibly that Kenneth Dye, Canada’s Auditor General, rebuked it for misleading the public by failing to follow “generally accepted accounting principles.”
The “it” is the Export Development Corporation, a federal Crown Corporation whose only job is to promote exports by providing subsidies of various kinds to big banks such as the Bank of Montreal and TD Bank, and to other corporations such as INCO and Canadian General Electric. Too often, these companies turn around and use our tax dollars in ways that wreak havoc in the Third World.
In Argentina, the EDC backed construction of a Candu nuclear reactor that continually breaks down, creating chaos for the economy, threatening the environment, and resulting in millions of dollars in losses to the Canadian taxpayer. In Mexico, EDC support for another Candu to be built by Atomic Energy of Canada Ltd. – this one was never even begun – likewise pushed Mexico further into debt.
In Colombia, EDC backed the Guavio hydroelectric complex, which has become synonymous in that country for white elephant. As the leading Colombian newsmagazine, Semana (their Time magazine) pointed out, the cost overruns alone from this ill-conceived project equalled half the nation’s entire budget for social programs. Colombians suffered as a result, but not Canadian General Electric, who carried out the work – the EDC saw to that.
And just last month, we learned from our contacts in Thailand that the EDC, along with its counterpart in the U. S., the Ex-Im Bank, is providing one of Thailand’s largest pulp companies with handouts that will lead to the conversion of natural forests and farmland to eucalyptus plantations for pulp.
Thai peasants hate eucalyptus because it dries up natural springs and destroys fragile tropical soils, but the peasants have another reason as well for hating these plantations: up to half a million families are threatened with eviction from their lands to make way for these plantations.
Because Thai environmentalists have difficulty getting information about this project, we asked the EDC if an environmental assessment had been done, to ensure that the project was environmentally and economically sound, and that those affected would be properly compensated. The EDC replied that it had not; in fact, the EDC never considers environmental impacts when approving loans, even though those impacts could render the project uneconomical, making loan repayments difficult or impossible.
The Thai business press gave front page coverage to this pulp loan giveaway, calling it “the single largest loan and grant package, with the best terms ever awarded to a private Thai group.” It went on to say “Financial experts expressed amazement at the group’s successful efforts to clinch the favourable package deal.”
With our government agencies throwing money at environmentally harmful projects like these in order to promote exports at a loss, is it any wonder that Canadian taxpayers are suffering, or that the Third World’s economy and environment is in such shambles?
Until recently, the federal government was considering making all government agencies take the environment into account before allowing tax dollars to be spent, but federal environment minister Lucien Bouchard decided to make an exception in the case of the EDC after intense lobbying by the exporters.
But there is no legitimate reason to exempt EDC and the companies to which it doles out money from obeying laws that apply to everyone else – no project should escape environmental scrutiny. There is no economic rationale for redistributing our national wealth to a select number of favoured corporations.