Evidence of meeting #63 for International Trade in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was chair.
A recording is available from Parliament.
Conservative
The Chair Conservative Leon Benoit
Mr. Julian, I make the decisions at this committee. I consult the clerk if I choose to.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Mr. Chair, I will ask you the question then. How will that appear, as it is circulated to the Canadian public, who are very interested in the SPP plans of the government and want to learn more?
Conservative
The Chair Conservative Leon Benoit
I've been told by the clerk it will be circulated any time the evidence of the committee meeting is circulated.
Conservative
Conservative
Conservative
Ted Menzies Conservative Macleod, AB
On a point of order, can we have a clarification from the clerk if this is procedurally correct, when we're using terms like “non-meeting”? Is it within procedures to even consider a motion like this?
Conservative
The Chair Conservative Leon Benoit
Mr. Menzies, I've already discussed this with the clerk. This is something that we have discussed, and it is in order. As you know, Mr. Menzies, the committee is the master of its destiny. This can happen. This motion is in order.
Could we go to the question on the motion?
(Motion agreed to)
Conservative
The Chair Conservative Leon Benoit
Now, if we could have the witnesses come forward, please, we will deal with the business before us.
We still have an hour with the witnesses. It's not much time, but we certainly look forward to their presentations.
We will continue with our study on the machinery of government and the implementation of Canada's trade policy, looking at the various departments and agencies and so on, that deal with trade in the Government of Canada.
We have as witnesses, from Export Development Canada, Eric Siegel, president and chief executive officer, international trade; from the Canadian Commercial Corporation, John McBride, president, and Marc Whittingham, vice-president, strategy and organizational development; from the Business Development Bank of Canada, Edmée Métivier, executive vice-president, financing and consulting, and Jacques Simoneau, executive vice-president, investments.
We will have the presentations by each group in the order listed, starting with Export Development Canada.
You have up to eight minutes, Mr. Siegel. We're looking forward to your presentation today.
Eric Siegel President, & Chief Executive Officer, International Trade, Export Development Canada
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.
Conservative
The Chair Conservative Leon Benoit
Thank you very much, Mr. Siegel.
We will now go to the presentation from the Canadian Commercial Corporation, Mr. McBride.
If you want to bring your colleague into the presentation, feel free to do so. Just go ahead, please.
John McBride President, Canadian Commercial Corporation
Good afternoon. I thank the members of the committee for inviting my colleague Marc Whittingham and myself.
I understand that you've received a copy of our corporate plan, which was tabled in Parliament two weeks ago, on May 1, and it amplifies many of the comments that I'll make today.
At CCC, since we are a smaller crown corporation employing only 100 people, the interrelationships between us and other government departments and agencies are paramount to our success. Before I speak about these linkages, let me tell you a bit about CCC and how it helps Canadian exporters.
The Canadian Commercial Corporation's focus is to increase trade by helping foreign governments to benefit from Canada's export capabilities through CCC's procurement and contracting expertise. It works in areas where there is a clear role for government intervention in the procurement and contracting process. In practice, this means CCC focuses on two main markets. The first is defence, which comprises approximately 75% of the contract billings of the corporation, or about $1 billion a year. The sensitive nature of defence products and the significant role played by governments in this market necessitate a government-to-government contracting mechanism to inter-mediate trade.
The second business line for CCC is emerging and developing country markets. In particular, the corporation works with countries that do not have the capacity to undertake effective contracting and procurement efforts on their own. This latter part has been part of CCC's focus since it was created in 1946 to assist with the reconstruction of Europe after World War II by connecting Canada's export capabilities to European needs after the war. To enable its work, CCC was given broad legislative powers to develop trade between nations by exporting or importing.
Now I am going to compare the two main business lines, government-to-government contracting and supply officer services. In government-to-government contracting, the CCC signs a contract with a foreign government buyer and another contract with a Canadian exporter. As the middle man, the CCC makes sure that the contract with the exporter is carried out in accordance with the terms of the contract reached with the international buyer.
We transfer the contractual obligations to the Canadian exporter. This results in a secure government-to-government contract reached under the best of conditions for all parties. As well, the CCC manages the payment cycle between the foreign government buyer and the Canadian exporter. This allows a predictable and regular schedule of payments to be established and maintained.
As regards the supply officer services, the CCC accesses goods or services on behalf of public buyers or a multilateral organization for final use abroad, and manages both the contracting process and the purchasing cycle. In 2006-2007, the CCC worked with almost 200 Canadian exporters in 25 countries and conducted business worth in excess of $1 billion.
Let me talk a bit more about CCC's defence business line.
Since 1956, CCC has been responsible for helping Canada meet its commitments under the Defence Production Sharing Agreement. The DPSA is an important part of the Canada-U.S. relationship. For Canadian companies, the agreement has ensured that they are able to compete on equal footing with American defence companies when bidding on American military contracts. For the U.S. and Canadian governments, the DPSA has ensured a strong North American defence industrial base. It remains the single largest element for the corporation, and between $650 million and $750 million of business with the U.S. DOD annually.
In addition, CCC facilitates procurement for NASA from Canadian sources, in a similar type of arrangement as that under the DPSA. While it remains optional for NASA to work with Canadian exporters through CCC, over 90% of all NASA work from Canadian sources is managed through the CCC, demonstrating the corporation's value to NASA and Canadian exporters.
Going forward, CCC will continue to strengthen the relationship with the U.S. government and examine other ways to work together to achieve a strong North American defence industrial base.
CCC has also leveraged its relationship with Canada's Department of National Defence. This has two distinctive elements.
First, the corporation leverages the Canadian Forces' traditional relationship with other militaries to learn about opportunities for Canadian suppliers in markets abroad.
Second, CCC leverages domestic equipment procurement internationally to the benefit of Canadian exporters. As Canada and our allies consider purchasing or upgrading equipment, changes in military operations require highly sophisticated capability and quality over quantity.
The cost of acquisition for highly complex equipment in very small quantities is often prohibitive for many militaries. CCC is well placed to provide to like-minded countries the ability to join with Canada in programs that DND has initiated or is considering. The combination of two or three buyers has the potential to provide economies of scale and make a program more affordable for both Canada and allied forces.
Let me talk a little bit about CCC's work in emerging and developing country markets. In these countries, where there is often insufficient capacity within local government to conduct efficient and transparent contracting activities, this can be an impediment for Canadian exporters and for achieving effective international development results. CCC employs unique relationships and contracting expertise to address these issues and generate benefits for both parties. CCC's government-to-government contracting and procurement services offer a valuable competitive advantage to Canadian companies operating in these complex public sector markets.
CCC contracts with a foreign government in an emerging or developing country to ensure due diligence and a fair and reasonable transparent proposal from Canadian exporters.
CCC also works with international funding and financing institutions to provide transparency in contracting and procurement in order for them to deliver their official development assistance programs.
On average, CCC's work in emerging and developing countries and markets represents about 25% of our business, or $250 million to $350 million per year.
I'm also very proud of CCC's contribution to wider Government of Canada policy goals, which have made a real difference to Canadian exporters and help foreign governments access Canadian solutions. For example, because of CCC's excellence in contracting and procurement, we were brought on board to Action Canada's contribution to promoting peace in the Sudan.
CCC is also making a tangible contribution to stabilization and reconstruction efforts in Afghanistan, for example, through our organizing and executing delivery of equipment for the Afghan National Police force. The dedication and professionalism of CCC personnel has made this possible.
With the Canadian International Development Agency, CCC is well positioned to work with companies that use CIDA Inc., a cost-sharing program that provides financial support to Canadian companies to carry out feasibility studies or provide implementation support in developing countries. With CIDA Inc.'s financial support at project inception and completion, CCC's role as a final contractor fits squarely in the middle and acts as a complement to CIDA Inc. to support Canadian firms wishing to undertake development infrastructure projects.
With EDC, the focus has been on connecting CCC's government-to-government contracting and procurement service options with EDC's finance and insurance offerings for the benefit of Canadian exporters. Joint EDC-CCC missions to Asia, Africa, and the Caribbean have proven to be valued tools for Canadian exporters wishing to advance and secure contracts in emerging and developing country markets.
Finally, CCC was recognized by the Treasury Board Secretariat with the award of excellence for outstanding teamwork in developing online client-centric service. Specifically, the award commended the electronic client relationship management and the virtual trade commissioner services created through a partnership with CCC, DFAIT, EDC and Agriculture and Agri-Food Canada. This initiative underlines the collaborative approach that exists throughout the federal government to better coordinate service offerings to Canadian exporters through a single point of entry.
As Ken Sunquist, the assistant deputy minister for global operations and Canada's chief trade commissioner, mentioned when he was here to speak to you last week, CCC has recently signed an MOU with DFAIT to implement a pilot project in Montreal. Officers in the regions will do the front-line work of promoting and counselling for the corporation. CCC will also sign an MOU with EDC and DFAIT to enhance business development and information-sharing activities.
In summary, the CCC works in collaboration with several departments and federal government agencies. This year, our goal, as our business plan shows, will be to work even more closely with the Department of Foreign Affairs and International Trade, Export Development Canada, the Department of National Defence, and the Canadian International Development Agency to develop more sophisticated partnerships in order to better serve Canadian exporters and to increase Canada's international trade.
Thank you for the time that you have kindly granted me and I am at your disposal to answer all your questions.
Conservative
The Chair Conservative Leon Benoit
Thank you very much for your presentation.
We'll go to the last presentation of the day, from Ms. Métivier. You have up to eight minutes. Go ahead, please.
Edmée Métivier Executive Vice President, Financing and Consulting, Business Development Bank of Canada
Mr. Chairman, thank you very much. This is the first opportunity BDC has had to meet the members of this committee formally.
Executive Vice President, Financing and Consulting, Business Development Bank of Canada
It's pleasant. So thank you for allowing us a few minutes, actually, to share our story with all of you.
We welcome your examination of the roles and responsibilities of the departments, agencies, and crown corporations that deliver our government support for entrepreneurs. We welcome any discussion and all ideas that will help us continue to meet our one goal: to make the most relevant, helpful contribution we can to the health of Canada's small and medium-sized businesses in Canada.
Our president and CEO, Jean-René Halde, could not be here today. He sends his regrets. Respectful of prior engagements, he is visiting our operation and clients in B.C. and Alberta. Jacques, my colleague, will answer any questions on venture capital later on, as it is his area of responsibility.
On behalf of BDC, we would like to share with you who we are and what we do to help entrepreneurs meet the competitive challenges of globalization. BDC has been helping SME exporters since 1944. We have much to offer, and l trust that you will find our contribution helpful to your work.
As you know, BDC is a business development bank. Parliament created us to support entrepreneurs and to promote entrepreneurship. We do this by offering financing, consulting, and venture capital services to SMEs. We offer these services on a pan-Canadian basis. Our employees work from 92 offices across the country, from St. John's to Vancouver, from Rimouski to Whitehorse.
We use partnerships to reach entrepreneurs who do not live in cities and towns. The best example of this would be our work with Community Futures development corporations, a network of more than 200 centres in mostly rural areas. Every day, about 600 BDC employees visit hundreds of SMEs. This direct access places BDC in a privileged position with SMEs.
At present, more than 27,000 Canadian entrepreneurs are BDC clients. To support them, we have invested over $10 billion in committed financing and venture capital. We have close to 200 companies in our venture capital portfolio, and through our investment in 17 funds, we have an equity position in more than 65 other companies. In total we have $770 million committed to about 250 companies in Canada.
Last year alone we also provided more than 2,400 business consultations. These were in areas like strategic planning, productivity improvement, and so forth. Of our 27,000 clients, more than 6,000 are exporters. In value, this is almost 40% of our portfolio, or a little over $4 billion.
As you know, BDC is commercially viable. The main thing to remember about our ability to be profitable is that this dictates the mode of operation that makes us constantly anticipate and meet SME needs. As the needs of SMEs evolve, so do our services. Indeed, we resemble SMEs ourselves in that we have to stay relevant to be profitable.
If we do not evolve with them, we will not be able to attract them as clients. It is as simple as that. Relevance is the key to our success. One has to remember that we succeed even though we price our loans at a higher interest rate than do other financial institutions to compensate for the greater risk we take.
In recent years we have been actively looking for ways to help SMEs deal with globalization and constant changes triggered by new market forces. The key to competitiveness is adaptation. Simply put, SMEs have to change to sidestep threats and seize opportunities.
To show the support provided by the BDC in assisting entrepreneurs to achieve success in global markets, I am now going to give you two examples of BDC clients. The first is a traditional client, a manufacturer who adapted, and the second is quite a different client, one who understood globalization from the beginning and who is transforming an innovation into a product and service successfully sold around the world.
Client One is a company that produces slate roofing tiles. Its manufacturing processes are rooted in the traditions of European master quarry workers. But in a global market, its competitors are not the ones in the next quarry. They are in Spain, in Brazil and in China. Wishing to remain competitive, this company has invested in research and development in order to improve its productivity and the quality of its products. At the same time, it clearly realizes that reaching new markets needs excellent preparatory work.
So its owners came to BDC for help in developing a strategic plan for the company's future growth. Our consulting services helped them to objectively analyze the strengths and weaknesses of their company, with a view to identifying a successful structure. Today, the company exports its products to Europe, to the United States and to Australia. It has increased its production twentyfold, and it now employs 300 people.
Client two is different. It sprung from the results of almost a decade of research and development in welding, metallurgy, and artificial intelligence. This R and D produces a niche product, that is, highly specialized high-tech robots that do sophisticated welding on production lines. Ninety percent of client two sales are exported to the United States, Europe, and Asia. To most firms, this percentage would be astonishingly high, at least for an SME. To our client, it is all they have ever known.
You will not be surprised to hear that these entrepreneurs were also global in outlook when they decided to open branches. They did so in Asia and the United States. This is in part because their competitors are as globalized as their clients: a handful of specific companies in England, Germany, the U.S., and Japan.
As I said, client two is a special breed of entrepreneur that deserves close attention for a minute. These entrepreneurs are the ones who are trying to create the globally competitive companies that must be part of Canada's long-term recipe for prosperity. When they succeed, Canadian society benefits.
In the case of client two, our support will help build operational and management capacity here in Canada. Three-quarters of their employees are highly qualified engineers, software specialists, and physicists. The company's annual revenues are in the range of $4 million. I think it's important to remember that this breed of entrepreneur embraces a degree of risk and complexity that most people would actually shun or flee.
To turn a new idea or innovation into a globally successful company takes several years and a range of separate sophisticated skills. Every step of the growth cycle requires learning and financing. There's no simple recipe here. Supporting venture capital clients takes great skill and patience. These are qualities that BDC has developed over its 30 years of experience in the venture capital sector. Increasingly, supporting them also requires support of a more aggressive kind, such as trade missions to Asia for the companies into which we invest, to help them break into these new markets.
So if we start with the premise that globalization is pushing our SMEs into a more knowledge-based, innovation-driven economy, forcing them to climb up the value chain, it follows that part of Canada' s response to globalization must be support to SMEs. I would suggest that BDC, a cross-country, flexible instrument of public policy, with a hard-wired focus on SME needs, six decades of experience with exporters, and three decades of experience in venture capital, is an important part of that response.
To remain relevant and of value to our customer, we will have to support a rising number of clients facing a rising number of tough challenges. Part of our strategy to do so is to find or create collaborative partnerships that can increase our impact and that of our peers. For example, we are working to get closer to NSERC and the National Research Council. We give NRC employees training sessions on venture capital, how it works and what the rules of the game are. Indeed, we also have some of its employees positioned in some of our offices. We have begun discussions with the international trade department about stepping up our support to SMEs and about how to help finance foreign direct investment in Canada. We have also started discussions with EDC to see how we might bring our existing cooperation to the next level.
With this partnership-seeking mode in mind, the question is, how do we ensure that departments, agencies, and crown corporations that support Canada's interests in international trade provide the most effective and collective contribution? We think a good start would be to leverage rather than replicate each others' trends. That is why we are here. BDC has deep knowledge of SMEs, and expertise in venture capital and other types of financing, and we are happy and willing to contribute within our means and our mandate.
We welcome your deliberation, Mr. Chairman, and we look forward to your report.
Thank you.
Conservative
The Chair Conservative Leon Benoit
Thank you, Ms. Métivier.
We'll go now directly to questions. Mr. Bains, for seven minutes.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
On a point of order, Mr. Chair, since there's only 24 minutes left, might I suggest that we do six minutes per party?
Conservative
The Chair Conservative Leon Benoit
We'll continue with the seven-minute round, as the chair is instructed to do.
Go ahead, please, Mr. Bains.
Liberal
Navdeep Bains Liberal Mississauga—Brampton South, ON
Thank you very much.
Again, I want to thank the witnesses for their patience. As you witnessed today, we had a little bit of housekeeping to do, and we greatly appreciate the fact that you had an opportunity to see that first-hand, at times, some of the housekeeping items that need to be addressed in the committee.
Mr. Siegel, I appreciate your remarks initially, because I did have some questions with respect to the softwood lumber agreement, and I think with respect to machinery of government, that's a very important issue that has come forth. You outline in your remarks some of the achievements with respect to that agreement and the processes involved around it.
As you know—I just want to give you some background, but you're probably fully aware of this—we are in consultation and possibly might go to arbitration with respect to the softwood lumber agreement. So I've received a lot of calls and concerns and e-mail from many people regarding this agreement.
The question I have is with respect to the implementation—and you alluded to this—the process of how EDC got involved with respect to these duties. These duties were held by the United States, and now these duties are being dispersed to Canadian companies, and EDC has helped facilitate that. Have the full amounts been returned to the companies that were owed the moneys?
President, & Chief Executive Officer, International Trade, Export Development Canada
Mr. Chairman, I thank the member for the question.
Let me clarify a couple of things. Obviously EDC was not involved in the negotiation on the agreement. That was handled by the government directly with the U.S. government. We were asked to develop and implement a process such that once the agreement had come into effect, rather than exporters having to wait what was estimated potentially to take up to two years for the U.S. government to actually liquidate the duty refunds, it would allow for those moneys to flow to exporters much faster. Our involvement was merely to develop and implement that process. It was voluntary as to whether companies chose to participate in it or not, and that was their assessment as to whether they felt that they were better off waiting for the refund from the U.S. government as opposed to following the process that EDC provided.
About half of the overall eligible recipients participated in the program. Of the total $5 billion, roughly, of rebates, $3.1 billion is what I said was the amount that was liquidated by EDC through the 829 participants in the program. All of those liquidations have taken place now. Actually, all but one of them were completed by the end of the year. The vast majority of them were completed within the first four weeks of the program.
We have now completed the program. We are also in the process of completing an audit. The Auditor General will, in conjunction with its normal Canada Account audit, audit the process to ensure that it met all the requirements and conformed to all the processes. So it is now complete.
Liberal
Navdeep Bains Liberal Mississauga—Brampton South, ON
So the refund has been provided to the companies.
In terms of EDC, has it received the moneys from the United States government?