Cost to Taxpayer

Crown Corp. is owed $22 billion for mystery loans

The Ottawa Citizen
March 18, 2000

$2.8 billion in bad debts is almost 3 times amount of Shovelgate grants; Even Canada’s auditor general doesn’t know who owes what
(Excerpt)

While billing itself as “Canada’s secret trade weapon,” the taxpayer-backed Export Development Corporation has racked up $22-billion in outstanding loans — of which $2.8 billion has already been declared deadbeat.

The loan losses are nearly three times the amount involved in the $1-billion Shovelgate job-grants scandal.

The EDC, which spent $40 billion last year giving loans and credit insurance to back private Canadian companies abroad, has borrowed $13 billion against the “full faith and credit” of the government of Canada.

No one outside the EDC’s downtown Ottawa headquarters — not even Auditor General Denis Desautels — knows precisely who owes the $22 billion. Or when it will be repaid. Or what portion is so high-risk it will go into default and never be repaid.

The EDC — the chairman of which is Patrick Lavelle, a longtime political ally of Prime Minister Jean Chretien — is the federal government’s best kept secret, because virtually every deal is done behind closed doors.

Exempt from federal access to information laws, the EDC tells neither the public nor Parliament who gets assistance, the amount of financing, the terms, the collateral, or the risk of non-payment.

“The Corporation has always been exempt to reflect the fact that its operations would be constrained, if not rendered impossible, it if was expected to fully disclose,” says EDC vice-president Eric Siegel. “Companies could not have the assurance that they could proceed without reasonable commercial confidentiality.

“The Corporation seeks to disclose as much as it can, and we are continually looking at ways to disclose more and more information without breaching commercial confidentiality.”

Yet he says the EDC is flatly opposed to being governed by federal access to information laws.

What makes the EDC money trail even murkier is that billions are being transferred annually — under confidential agreements — to foreign governments or state-controlled banks and agencies which can only use the money to purchase Canadian goods or spur foreign investment by Canadian-based companies.

Advertisements

Categories: Cost to Taxpayer, EDC, Export Credit, News, Secrecy

Tagged as: ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s