Thank you very much, Mr. Chair. I am happy to appear before the committee again.
The committee is examining how the machinery of government is delivering on trade and investment services for Canadian business. I must say, I'm glad to have this opportunity to share my views on where we are today and where we expect to be tomorrow. I'm also looking forward to your comments and your findings and to be able to integrate them into our own research and planning.
If there is one position that I think all committee members share, it is that trade is key to the continuing prosperity of Canada. EDC plays an important role in sustaining the health of Canada's trade. To be effective, we have to be strongly connected to our partners within the international trade portfolio, and more specifically, International Trade Canada, both at home and abroad, as well as the sister corporations, the Canadian Commercial Corporation and the Business Development Bank of Canada, which share our interest.
If I could, I'd like to recap briefly our 2006 performance. Last year, our combined insurance and financing volumes topped $66 billion. We work with over 6,000 Canadian companies of every size, from every industry sector and from every corner of the country. We work with them in over 184 markets around the world, and almost one-quarter of that business, some $15.2 billion, is in emerging markets. Those are the opportunity-rich but riskier markets where Canadian business knows it has to increase its presence if it is to remain competitive.
EDC now participates in 30% of Canada's trade with emerging markets, and we expect that to continue to grow as Canada's interest in those markets continues to grow. Markets like Brazil, Russia, India, China, and Mexico are the priority emerging markets for Canadian companies because of their growth rates, their importance to supply chains, and the alignment of their markets with Canadian strengths.
EDC's business volumes in these key markets totalled more than $6.8 billion last year, up 26% from the year before. Growth was particularly notable in Mexico, with a 60% increase to $2.6 billion; in Russia, a 50% increase to $750 million; and in India, where business nearly doubled in 2006, to $730 million. Overall, transactions facilitated by EDC in 2006 are estimated to have generated $44.6 billion of Canada's GDP, or about 3.9% of the total. All of that activity is also associated with sustaining some 546,000 jobs.
EDC is a key element within the government's international trade portfolio. We provide finance and risk management services to Canadian exporters and investors and complement the trade promotion activities of International Trade Canada and other trade players. Our responsibility in financial services is heightened because the market for trade finance in Canada is much weaker than in many of our competitors. This simply reflects the size of our economy and the limited number of Canadian transnationals. Smaller companies, particularly those intent on growing their business in riskier markets, have comparatively fewer financial institutions available to them than their foreign competitors.
As a public agency, we have to bridge that gap to provide Canadian companies with the breadth of financial services that is internationally competitive. This is particularly the case for SMEs, for young high-growth firms, for firms that do not have a long-standing relationship with their financial institution, and for business that carries a higher risk profile, like emerging markets. To reach that group, we have to work closely with other government partners to raise awareness and increase access to those services among all companies that could use them to succeed abroad.
Within government, we have to share information with each other so we collectively better identify the needs of Canadian exporters. We at EDC can then use that information to not only improve our own services, but understand how and when they can be leveraged with those of others to better meet exporters' needs. Given our public mandate, it is vital that EDC's activities and planning are solidly aligned with and support the government's global commerce strategy. We work closely with DFAIT and other agencies to ensure our objectives match government goals, our strategies work effectively with theirs, and that contact at both operational and leadership levels is constant.
EDC regularly consults and exchanges information with all levels of government, from the working level to the ministerial level, as required formally by the provisions of the Export Development Act and the Financial Administration Act. It is the informal day-in, day-out contact, however, that deepens those relationships and generates the understanding that makes those partnerships work.
In Ottawa, we constantly share market information. The country desks of International Trade Canada are well connected to our own international business development teams. Our group that assesses market and political risk relies on the most up-to-date reports and information that are available from Canadian missions abroad. We work together not only through our headquarters in Ottawa, but also in the 12 other cities across Canada where EDC has offices.
That connection continues overseas in 10 key centres in strategically important markets where we have permanent EDC representation. All of our representatives are co-located with Canada's Trade Commissioner Service in Canadian embassies, high commissions, or consulates. This has proven particularly effective in those key strategic markets I mentioned earlier, the BRICM countries. What we have found is that our financial relationships with key buyers and borrowers combined with the experience and knowledge of the Trade Commissioner Service has enabled both of us to better match buyers' needs to the best products and technology that Canada has to offer. This in fact creates new opportunities.
In Brazil and Mexico, our work with Canada's trade team in those countries has led to an EDC business development plan that is completely aligned on the priority sectors in those markets for Canadian involvement. Joint research with DFAIT has also enabled us to take our strategies to a new level. In Mexico, for example, we have just jointly funded a study focusing on the needs of Mexican affiliates of Canadian companies that are engaged in manufacturing. The results will enable us to move beyond broad economic and trade statistics to specific strategies to help Canadian companies grow their business in that market.
In Russia, our collaboration with DFAIT and with CERBA, the Canada Eurasia Russia Business Association, directly led to that 50% growth in EDC business that I referenced earlier. It also led to our posting of our first permanent representative in Moscow in January of this year, and has led to some very specific programs targeting Russian agriculture, mining, energy, and telecom needs.
EDC is also a key participant in the government's global online services committee, which has been mandated to determine how the government's online trade and investment services can be better leveraged to enhance productivity and improve Canada's competitiveness. EDC has some unique capabilities in government. Close working relationships mean that they can be fully utilized when fast-breaking events occur.
An excellent example is EDC's role in managing the softwood lumber duty deposit refund process for the government last fall. Once the Canada-U.S. Softwood Lumber Agreement became into effect, the government wanted refunds paid out as fast as possible. EDC had the contractual expertise, the experience in making disbursements, and the ability to manage a complex program within strict costs and do so quickly. We stepped up to the plate, providing an accelerated payment process that fast-tracked refunds. The process handled nearly 900,000 transactions involving 829 companies, with a total disbursed value of $3.1 billion. Canadian producers and sawmills began to receive those refunds just three weeks after the agreement took effect, and 99% of those refunds had been effected by the end of the year, more than half of them just within the first month.
You cannot anticipate these sorts of requirements, but it's an excellent example of how knowledge, content, and relationships can lead to original thinking and overcome complex problems and deliver results when needs arise.
Let met then conclude by briefly outlining some of our future plans.
We have adopted a very ambitious business strategy that focuses on responding quickly to the evolving needs of Canadian companies. The strategy has three basic pillars: connecting with Canadian exporters and investors, facilitating integrative trade, and leveraging the organization. This strategy also supports the key initiatives set forth by the Minister of International Trade, which are to actively support Canadian direct investments abroad and facilitate equity investments, to work in partnership with the private and public sectors, to increase representation abroad, and to focus on how EDC can enhance Canada's position in the United States and in emerging markets. We will continue to strengthen our links within government.
I'm pleased to advise you that we are about to sign a memorandum of understanding with the Department of Foreign Affairs and International Trade and the Canadian Commercial Corporation. The objective of this agreement is to develop systematic means for the exchange of market sector and company knowledge.
In closing, section 24 of the Export Development Act requires that the Minister of International Trade in consultation with the Minister of Finance initiate periodic independent reviews of EDC's mandate. The next review must be initiated in 2008 and will involve consultations with an extensive number of stakeholders, including Parliament, government departments, Canadian business and their associations, financial institutions, academia, and civil society.
We at EDC look forward to working with more financial partners in more creative ways to meet our clients' needs. We also look forward to working with the government to fulfill our mandate and to increase our contribution to growing Canada's trade.
Mr. Chair, I am at your disposal to answer any questions.
Thank you.