Finance Committee on June 9th, 2020

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

This is an interesting discussion. It's impressive to see how quickly EDC can change its fields of action.

Mr. Marc-André Viau, from Équiterre, said when he appeared before this committee that his environmental partner organizations had had a study done on your organization. The study found that since 2016, EDC has provided $45 billion in assistance to oil and gas companies, but $7 billion to the clean energy sector.

Can you corroborate those figures? In your opinion, will the ratio between the two sectors continue or will it change in favour of clean energy during and after the COVID-19 pandemic?

[The Chair, Liberal, Wayne Easter]

Who wants to take that? Would it be Ms. Lavery?

[Mairead Lavery]

I'll let Mr. Burlock start, and then I can weigh in.

[The Chair, Liberal, Wayne Easter]

Go ahead, Mr. Burlock.

[Carl Burlock]

Thank you.

Our clean technology initiative started in 2012. It's come from zero seven years ago to what it is today, which is about $2.4 billion per year. It's been a growing part of our business.

That said, we still do business across all Canadian sectors. The energy sector has been a big component of the Canadian economy. We continue to support it. We did make commitments in our climate change policy, which we publicly issued in 2019, to set a target for the percentage of our portfolio in carbon-intensive industries. We set a target to reduce our carbon-intensive sector portfolio by 15% through 2023.

[The Chair, Liberal, Wayne Easter]

Okay. We'll turn to Mr. Julian.

Do you have a supplementary question, Gabriel, or are you okay on that answer?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

I just want to make sure I understand. The clean energy sector is weaker because it is a new sector, since 2012. However, as I understand it, this portion of your portfolio should continue to grow because you have made a commitment to it. Is that right?

[Carl Burlock]

That's exactly right.

I'm sorry: when you first asked the question, I heard the interpretation, not the French.

[The Chair, Liberal, Wayne Easter]

Thank you both.

Mr. Julian will be followed by Mr. Cumming.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you. I'd just like to clarify something.

Thank you very much, Mr. Burlock. You said there was $2.4 billion last year for clean energy. How much in supports through the EDC went to the oil and gas sector? You didn't answer that part of Mr. Ste-Marie's question.

[Carl Burlock]

I don't have the exact number for last year, but it is higher than the $2.4 billion. I can come back with an exact number, unless one of my colleagues has it.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Okay. Thank you.

Équiterre has said it's $45 billion compared to $7 billion for clean energy, but it would be great if you could clarify that with us.

I have a quick question around conditions on the credit facility. You alluded, Ms. Lavery, to share buybacks. Are dividends and executive bonuses also included as part of the credit facility, and when the credit facility is approved, is it transferable? In other words, if a bank is really gouging a business that is trying to make a go of it, can they take it to another financial institution so that they can get a less onerous interest rate?

[Mairead Lavery]

We have been very specific in the conditions for the BCAP guarantee to eliminate any payments in dividends or increases in CEO or executive compensation as shared by banks, etc. Those are not permissible under the program itself.

With respect to dodging and transferring, it is a specific loan between a financial institution and its customer that is supported by EDC. We do internally ensure that we are providing the same facilities to the 120 institutions that are in the program, so if a customer wanted to break their loan with their financial institution and move to another one, as long as that financial institution is in the 120 programs where the guarantee is offered, it would be available to them from us.

[The Chair, Liberal, Wayne Easter]

Go ahead, Peter. You have time for a quick one.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you.

To come back to violating the issue around executive bonuses, share buybacks and dividends, who polices that? Is it the bank that polices it, or is it EDC that gets a report from the company and makes sure that it doesn't happen?

[Mairead Lavery]

This would be a specific term and condition of a legal agreement. We would continue to monitor the companies we have relationships with, as would the banks with respect to their agreements. I would say there is both self-monitoring and monitoring from all parties to the agreement. It is a legal agreement.

[The Chair, Liberal, Wayne Easter]

Thank you.

Mr. Cumming will be followed by Mr. Fragiskatos. James, you have five minutes.

[James Cumming, Conservative, Edmonton Centre, AB]

Thank you.

On the BCAP loans, if the bank ends up having to extend the term because the client is in a bit of trouble, does it follow that you will extend the guarantee over the term?

[Mairead Lavery]

Carl, would you like to answer that one specifically?

[Carl Burlock]

Yes, typically we're open to doing that. The BCAP guarantees were modelled after our existing export guarantee program that we've had in place for many, many years. That program supports over 1,500 Canadian companies, and those are the principles by which we've always operated. If a bank is willing to renegotiate the term with a company, they have to ask EDC, and then we consider that request.

[James Cumming, Conservative, Edmonton Centre, AB]

This question is probably for Mr. Burlock because he dealt with the CEBA loans before.

One thing you didn't mention with the changes that are coming in the next week is personal bank accounts. Will those provisions be included with the upcoming changes, the use of personal bank accounts?

[Mairead Lavery]

It's for Mr. Winterhalt.

[James Cumming, Conservative, Edmonton Centre, AB]

Mr. Winterhalt, sorry.

[Todd Winterhalt]

That's okay. I can take that one.

Under CEBA 3.0, that's not contemplated. The policy owners of the CEBA program are both the Department of Finance and Global Affairs Canada, and they've taken any further discussion on program evolution away with them.

[James Cumming, Conservative, Edmonton Centre, AB]

The announcement that the minister made that they will consider personal bank accounts will not be coming with the changes coming up in this next version. Is that correct?