Evidence of meeting #35 for Finance in the 43rd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was companies.
A recording is available from Parliament.
Senior Vice-President, Communications and Corporate Strategy, Export Development Canada
That's correct. They're not part of the 3.0 version.
Conservative
Senior Vice-President, Communications and Corporate Strategy, Export Development Canada
I do not.
Conservative
James Cumming Conservative Edmonton Centre, AB
Can someone tell us what the actual size of loans within the CEBA program is, on average?
Senior Vice-President, Communications and Corporate Strategy, Export Development Canada
I'm happy to do that.
Actually, that is a program where we do have a fair amount of data, given that it's a little bit longer in the tooth, so to speak. In terms of average size, it is pretty close to the full $40,000 that is eligible. That's partially a function of the fact that the grant component is attached to that. Companies that apply for the loan to get the $10,000 grant amount take the full $40,000, of which $10,000 is repayable.
Conservative
James Cumming Conservative Edmonton Centre, AB
With regard to the $10,000 repayable, if a company starts to pay down the loan before 2022, how do you determine what the forgivable amount is?
Senior Vice-President, Communications and Corporate Strategy, Export Development Canada
It is a flat forgivable amount, so for that up to $10,000, that's forgivable, regardless of when the payment occurs, as long as it's before the end of the period, as you indicated.
Conservative
James Cumming Conservative Edmonton Centre, AB
If they only have the capacity to repay $15,000, then the forgivable amount is not forgivable. It's not pari passu or pro-rated.
Senior Vice-President, Communications and Corporate Strategy, Export Development Canada
That's correct.
Liberal
The Chair Liberal Wayne Easter
Okay, we'll turn to Mr. Fragiskatos, and if Mr. Cooper wants in, there will be time. Then we'll go to Mr. McLeod.
Mr. Fragiskatos.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Thank you, Mr. Chair.
Ms. Lavery, you said in your opening statement that at the heart of EDC's work is risk mitigation. What is understood by risk mitigation? How do you conceptualize it?
President and Chief Executive Officer, Export Development Canada
Yes, we do see ourselves as risk mitigators, whether that's by providing insurance products, which are a very traditional risk product, to ensure that people get paid, or by providing some of the knowledge products that we provide, ensuring that people have the knowledge to reduce the risk of actually entering into specific export transactions. It's also with respect to even the due diligence that we will do with our customers with regard to CSR, for example, and non-credit risks. Those are ways in which we can ensure that exporters are evaluating all of the elements of their international deals, whether they're sales agreements or expansions abroad.
When we work with them to understand their financing needs, we're also working to ensure that they understand issues like human rights, climate change and business integrity so that even just that process is very helpful to them. This is because we truly do believe in responsible business.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Thank you very much.
EDC's mandate says that export credit insurance is offered “to protect against uncontrollable events such as a buyer refusing to pay.”
My question relates to the understanding of uncontrollable events. How flexible is that definition and how stable is the fund? Simply put, is there enough money there to ensure that insurance payments are made and that companies that might be in need are supported?
President and Chief Executive Officer, Export Development Canada
Yes, absolutely. With regard to uncontrollable events, we have very specific insurance policies and insurance agreements. We try to simplify those as much as we possibly can. In fact, we've developed an online product, and for some of our smaller customers who just need to know if the buyer is in fact creditworthy, they can even just do a credit check with us. That's a way that we can help them. Then it goes to the policy itself. It's very clear, particularly with our online products, what the coverage provides, what would be examples of events, and what the obligations are of the companies themselves because we've also seen examples whereby people want to make an insurance claim, but they haven't actually provided the product to the foreign buyer.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Ms. Lavery, I'm sorry. I hate to interrupt, but time is limited. When you say that the understanding of uncontrollable events is flexible, if reasons for non-payment include COVID-19, simply put, would that be something EDC would accept?
President and Chief Executive Officer, Export Development Canada
We have actually been working with our clients on issues such as this, where goods have not been received...or, sorry, have not been able to be delivered, just because of closures of borders, etc. Those are all examples of where we will work with the policyholder to make sure we understand very specifically what was needed.
With respect to your second question, on whether there are sufficient funds, the answer is yes. EDC has for a long period of time been self-sustaining in terms of its own performance. We are able to meet the requirements of insurance claims that may be posed upon us.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
If you don't have this today, that's fine, but do you have the figure for what was paid out in 2019 in terms of insurance? Is there an estimate that the EDC has come up with at this point in time as to what could be paid out in 2020, this being obviously an extremely difficult year?
President and Chief Executive Officer, Export Development Canada
I apologize, but I don't have that with me. When you say “paid out”, I assume you mean the claims that we have actually paid on our insurance program.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
That's right, for the year 2019. If you don't have it today, that's fine.
I ask the question because when we talk about whether or not there are enough funds there, it would be interesting to see what was paid out in 2019 and if there is an analysis on an estimate for 2020, comparing the two.
Liberal
The Chair Liberal Wayne Easter
We'll look forward to that information. You can send it to the clerk.
We'll split the remaining time. That will give each of you about two minutes, Mr. Cooper and Mr. McLeod.
Mr. Cooper.
Conservative
Michael Cooper Conservative St. Albert—Edmonton, AB
I will pass. I'll concede to Mr. Cumming or Mr. Morantz, if they have anything to follow up on. Otherwise, I'm good.