EDC

EDC doles out cash as corporate backstop

National Post
October 18, 2002

Money-making body.

(Excerpt)

Export Development Canada is no stranger to
controversy, having suffered attacks in recent years over its lending
policies as well as over issues of transparency and environmental
responsibility.

EDC’s mandate is to help customers in other countries buy Canadian
products. The Crown-owned financial institution offers a range of
services, including loans to foreign purchasers and insurance that
protects Canadian exporters for up to 90% of an outstanding balance if
the overseas buyer goes broke or refuses to pay.

Opposition politicians have attacked the federal government in
Parliament for using EDC has a vehicle to issue “sweetheart deals” —
long term, interest-free loans – to developing countries.

The government insists those loans are commercial deals extended from EDC’s own coffers, not taxpayers’ money.

Critics have also argued EDC’s assistance to overseas customers makes
it easier for countries to pursue projects that harm the environment.

A May, 2001, report by Sheila Fraser, the Auditor General, concluded
that 24 out of 26 EDC-backed projects in 2000 were not properly
assessed under the corporation’s own environmental review directives.

“The corporation does not have sufficient information to know if
environmental risks exist and are being adequately addressed, and how
Canadians could be supporting projects which they would feel do not
meet environmental standards,” Ms. Fraser said.

The embarrassing report was one factor that eventually persuaded EDC to
increase the amount of information it releases to the public.

As a Crown corporation, EDC is exempt from the federal Access to
Information Act, and has therefore come under fire for a lack of
transparency.

In a speech in October, 2000, Ian Gillespie, EDC’s chief executive,
fired back, denying charges the corporation is a “rogue organization
accountable to no one …. We have a very strong governance structure
that needs to be kept strong.”

 

Categories: EDC, Export Credit, News

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