EDC

Financial sinkhole

(October 25, 2002) The National Post writes: Export Development Canada has hung like an albatross around the neck of the Canadian taxpayer for far too long. It must stop making new loans, wind down its operations and then shutter itself for good.

(Excerpt)

Canadian business supposedly has no better friend than Export Development Canada, a federally funded agency that provides billions of dollars in loans and lines of credit to foreign companies that want to buy Canadian products.

But helping foreign buyers does not help Canadian taxpayers. Instead, it is costing them billions. Half of EDC’s $21-billion portfolio is loaned to customers of Bombardier and Nortel, high-profile companies operating in the aerospace and information technology sectors that have taken a terrible beating in the current recession. It has now emerged that in March, 2001, when he was still EDC chairman, Patrick Lavelle warned Ottawa that $10-billion of exposure to Bombardier and Nortel customers was at risk.

Around the world, clients of Bombardier and Nortel face grim economic forecasts, and some will be unable to pay what they owe. According to Probe International, a watchdog group, Canadian taxpayers bailed out $800-million worth of dud EDC loans between 1990 and 2000. The agency’s latest extravagance with Canadians’ money may prove much more costly.

Click on the image below to read a copy of the original editorial in full.

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