International Trade Committee on June 11th, 2026

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call the meeting to order. This is meeting number 43 of the Standing Committee on International Trade.

Welcome to all of the committee members and to our witnesses.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Tuesday, May 5, 2026, the committee is resuming its study of international trade-related activities of certain federal entities.

We have with us today, from the Business Development Bank of Canada, Véronique Dorval, chief operating officer and executive vice-president, and Pierre Cléroux, vice-president of research and chief economist, who is joining us by video conference. From Export Development Canada, we have Todd Winterhalt, senior vice-president of international markets and head of communications and public affairs, and Joanne De Franco, vice-president of global business development.

Witnesses, I'll remind you to have your earpieces on. You'll have questions in both English and French. If you need interpretation, please ensure that you're ready. I know you're very well equipped for all of this.

Welcome, again, to all of you. We'll have opening remarks.

Ms. Dorval, I invite you to make your opening remarks for up to five minutes.

[Véronique Dorval, Chief Operating Officer, Executive Vice President, Business Development Bank of Canada]

Madam Chair and members of the committee, I'd like to thank you for inviting me to speak to you about the Business Development Bank of Canada.

The Business Development Bank of Canada is the only bank dedicated exclusively to Canadian entrepreneurs. Its mission is to support them by providing financing, advisory services and venture capital.

We operate on commercial principles, supporting over 107,000 clients across the country. Of these, about 7% export. As outlined in the BDC Act, we are focused on the domestic market, with the export-enabling role for businesses well served by sister Crowns, such as the EDC.

Our view is that the BDC's role in helping create, grow and scale SMEs creates the ideal preconditions for exporting companies. Small and medium-sized enterprises are the backbone of the Canadian economy. They represent 99.7% of all businesses and account for 64% of private sector employment.

That's why the Business Development Bank of Canada has a presence across the country, with 109 business centres. Thanks to this nationwide presence, our loan and interest portfolio stood at $57 billion at the end of the 2025 fiscal year.

This work generates tangible economic benefits for Canada. Based on the 2025 fiscal year, the Business Development Bank of Canada estimates that its activities will contribute $25 billion to Canada's gross domestic product over the next five years.

We are equally committed to delivering value to our shareholder, the Government of Canada, by operating as a well-managed Crown corporation. The BDC operates on commercial principles, remains profitable and fully funds its core operations. This ensures that we do not rely on taxpayer funding. In fact, our profitability has allowed us to return dividends back to Canadians. Over the past five years, BDC has paid $1.4 billion to the Government of Canada.

When it comes to international trade, the Business Development Bank of Canada makes a meaningful contribution to the broader effort to support businesses grappling with tariffs and the persistent uncertainty associated with them.

Through our core activities, we provide working capital to help businesses continue to grow while protecting their liquidity. We also offer advisory services to strengthen businesses' strategies, operations and productivity.

I'm joined today by our chief economist, Pierre Cléroux, whose team has delivered over 280 presentations across the country since the tariffs were introduced, in addition to producing accessible research and tools that support entrepreneurs and inform them in their business decisions.

We also play a key role within the Government of Canada's broader tariff response, delivering a number of tariff relief programs with flexible financing and advisory services to help businesses adapt and continue to grow. This includes about $200 million in loans and close to 600 advisory mandates delivered under the pivot to grow program for smaller businesses directly affected by U.S. tariffs or the uncertainty they cause.

For softwood lumber businesses, the BDC has guaranteed over $300 million in loans and letters of credit through partner financial institutions.

More recently, the Business Development Bank of Canada was tasked with implementing a $1 billion funding package for companies in the steel and aluminum sectors to help viable businesses remain operational and resilient in the coming months.

The Business Development Bank of Canada remains firmly committed to supporting Canadian entrepreneurs during this period of uncertainty, while continuing to operate on a financially sustainable basis and delivering value to Canadians.

Thank you. I would be happy to answer any questions from committee members.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Dorval.

We're going on to Mr. Winterhalt and Ms. De Franco, please, for opening remarks of up to five minutes.

[Todd Winterhalt, Senior Vice-President, International Markets, and Head of Communications and Public Affairs, Export Development Canada]

Good morning, everyone.

Madam Chair and members of the committee, I'd like to thank you for inviting me to appear before you.

With me today is Joanne De Franco, vice-president of global business development.

EDC is very pleased to be back at the international trade committee and looks forward to contributing to the committee's study on key challenges, opportunities and support tools available to Canadian exporters as they navigate a challenging and evolving trade landscape.

If I may, Madam Chair, I would like to summarize the mandate of Export Development Canada for the benefit of those who are less familiar with us.

We are part of Canada's international trade ecosystem, and our mission is to support and develop Canada's international trade.

We support Canadian companies with insurance, direct lending and working capital to help them manage risk, find new buyers, participate in large projects or establish operations overseas. Leveraging our 26 international representations around the world, we offer market insights and connections to help exporters find new trading partners. Together, this helps exporters and investors lower risk and access the capital they need to enter new markets.

In 2025, EDC served approximately 24,000 Canadian exporters, facilitating over $135 billion in exports, foreign investment and trade development. EDC's business supported an estimated $97 billion of Canada's gross domestic product, or more than 3% of total Canadian GDP. It also supported approximately 580,000 full-time jobs across the country.

Like our colleagues at BDC, we operate on commercial terms, which ensures that our work complements that of private commercial banks and insurers. Consistent with this model, EDC does not provide grants or subsidies.

At our core, we are a customer-needs driven organization, and in 2026, Canadian exporters and investors are very clearly telling us that they are looking to diversify. In fact, our 2025 trade confidence index survey found that over 65% of Canadian companies were planning to diversify their markets into new regions within the next two years. This is a continuation of an upward trend towards diversification that started in earnest following the end of the pandemic.

Furthermore, over the past 10 years, EDC research has found that the export pathway for Canadian companies has fundamentally shifted. The share of Canadian companies that start out by exporting only to the U.S. has declined by nearly half. Over the same period, the share of companies that start out by exporting to multiple global markets has more than tripled.

The U.S. remains and, in our view, will always be Canada's most important market, with nearly three-quarters of exporters being either highly or moderately dependent on it, but the imperative to diversify now, in this transformational moment for global trade, is exceptionally strong. Working with our diverse group of buyers and multiple markets has long been known to boost an exporter's performance and prosperity. Today, it has become an imperative. The Canadian trade ecosystem has begun to galvanize around this purpose, and now we need to execute.

The performance highlights I shared earlier underscore EDC's propensity for impact. Our primary focus is to help Canada become a more resilient, competitive and secure trading nation. EDC is proud to serve as a catalyst for growth in Canada's most promising and future-oriented sectors, sectors such as critical minerals, energy and energy transition, agri-food, and defence and security. We can leverage our extensive and growing international presence to grow Canadian business in high-potential markets such as Europe and the Asia-Pacific region.

Finally, with our project finance team, one of the largest and most experienced in all of Canada, we can help support the domestic infrastructure build that supports trade and productivity enhancements here at home and facilitates diversification at the necessary scale.

Thank you for giving me the time to share some information with you about EDC and international trade.

We look forward to offering you some more information and addressing your questions.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We will now open the floor for questions.

Mr. Mantle, you have six minutes, please.

[Jacob Mantle, Conservative, York—Durham, ON]

Thank you, Madam Chair.

Thank you to our witnesses for appearing and providing their valuable testimony.

Ms. Dorval, you mentioned the pivot to grow loan program. I understand there are several other programs that BDC operates with respect to what I would generally call tariff relief or mitigation: forestry support program; steel and aluminum industries support program; small business loans; business purchase or transfer loans; working capital loans; and the softwood lumber guarantee program. Have I captured all of them?

[Véronique Dorval]

We have the pivot to grow program, softwood lumber guarantee, LIFT, steel and aluminum, and forestry.

[Jacob Mantle, Conservative, York—Durham, ON]

Of the programs, these are the ones that are targeted at mitigation.

[Véronique Dorval]

Yes, that is right.

[Jacob Mantle, Conservative, York—Durham, ON]

Excellent.

The committee is obviously very interested in the programs that the government is operating to help mitigate some of the effects of tariffs on Canadian companies. Would you undertake to provide the committee with a list of the companies that have taken advantage of those programs and the amounts of the contributions they've received?

[Véronique Dorval]

I can give you, here, numbers of how many companies have taken advantage of the program. I don't have all the names of the companies available, but if it's helpful....

Pivot to grow is a program that focuses on helping entrepreneurs affected by either the tariffs or the economic uncertainty. It has an envelope of $500 million. For now, a little more than $200 million has been deployed across 157 loans and more than 600 advisory mandates. There is an important component here that is beyond financing. It's just helping entrepreneurs define their strategy of how they adapt to the environment.

[Jacob Mantle, Conservative, York—Durham, ON]

In the interest of time, could you submit in written form to the committee some of that information on the size of the program and, in particular, the names of the companies that have taken advantage of that?

[Véronique Dorval]

We can provide more details on those programs in writing, absolutely.

[Jacob Mantle, Conservative, York—Durham, ON]

Thank you very much. I appreciate that.

I'd like to ask you a little about some of the economic analysis that BDC undertakes. I know you do your monthly economic letter, forecasting what the economy looks like.

My understanding of a recession is two quarters of negative or stagnant growth. Is that correct?

[Véronique Dorval]

I'm going to let Pierre, our chief economist, answer your question about that.

[Pierre Cléroux, Vice-President, Research and Chief Economist, Business Development Bank of Canada]

Thank you.

The definition of a recession is quite complex. In Canada, C.D. Howe is the organization that will make a decision on, I would say, whether Canada is in a recession or not. The two quarters in a row refers to what the media is calling a technical recession, but this doesn't mean that it's a formal recession.

[Jacob Mantle, Conservative, York—Durham, ON]

Could you define for me the difference between a formal recession and a technical recession?

[Pierre Cléroux]

A technical recession is, as you said, two quarters in a row of negative growth. To have a recession—and as I said, in Canada, C.D. Howe is the organization that is responsible for deciding if we are in a recession or not—you basically require a deeper decline in economic growth and more job layoffs. These are different components that will make the decision of a recession for any country.

[Jacob Mantle, Conservative, York—Durham, ON]

Thank you.

Is a technical recession a good thing for a country to be in? Is a technical recession an indicator of a strong economy?

[Pierre Cléroux]

A technical recession means that the GDP declined two quarters in a row. That's really the definition of a technical recession.

[Jacob Mantle, Conservative, York—Durham, ON]

Thank you.

In your economic update, you talked about residential investment weighing on growth. One thing the letter doesn't refer to is the non-residential investment. In my last minute and a bit, I want to get your views on that, because non-residential investment is critical for productivity, as I understand it.

C.D. Howe has recently—I guess in March—put out their analysis that we're 25% below the 2014 peak of non-residential investment. Productivity investment in machinery, plants and equipment is below the replacement rate. Is it BDC's view as well that productivity-related investment is below our peak and declining?

[Pierre Cléroux]

In 2025, non-residential investment had zero growth for the year. This is really related to the fact that there was a lot of uncertainty in the economy.

Businesses have been very cautious about investing more. If we didn't have an increase in business investment in 2025, we can conclude that the investment in terms of productivity is probably slowing down.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We have Mr. Lavoie, please, for six minutes.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

Thank you, Madam Chair.

I'd like to thank the witnesses for accepting our invitation. I imagine you didn't really have a choice, but we're pleased to have you here. The study we're conducting here is important. I'm the one who moved the motion for this study because I wanted to have the opportunity to speak with you. The two institutions you represent play an essential role. I've worked in commercial banking, and I've seen projects carried out through EDC and BDC. You play a truly essential role for our Canadian businesses.

As my colleagues know, two of the words that have come up most often since I joined the Standing Committee on International Trade are “predictability” and “unpredictability”. All the businesses we've met with talk only about that. However, the world has changed. Many international experts have appeared before us and told us that it could stay like this for a very long time. Having worked in banking, I know that these are often cycles. The cycle slows down, and then investment picks back up. However, in this kind of unstable context, which is likely to last for a long time, adjustments will likely be needed, both on the banks' side and on your side.

I've read your annual reports. For example, I very much appreciated EDC's report. There is one sentence I would like to quote. It's something we've heard often, but it sums up the situation well. It's under the heading “Global trade is evolving”. It says, “Contrasting trends are at play in global trade, with protectionist and liberalizing forces evident in different markets and regions”. Your strategic priorities are clear.

The same applies to BDC. In the section entitled, “Redefining bankable”, you compare data between 2020 and 2025. It shows that you are closely monitoring changes.

Having said that, I will now turn to my question. It's for both organizations, so you can answer it in turn.

There's a before and an after. What I mean, for instance, is that you made some changes at BDC between 2020 and 2025, and we can see the trend between 2020 and 2025 with regard to SMEs. However, this was a process that began in 2018-19, before those changes were implemented.

Here's what I would like to know today. Given the changes we've been experiencing over the past year and a half to two years, what measures are you currently considering or implementing that differ from what you were doing before to address these changes, which are not temporary and may well be permanent?

I'd like to make one final comment. If you don't have the answers today, that's fine; you can provide us with detailed answers later. I would ask you to provide concrete, down-to-earth answers. I say this because, when we met with representatives from the Canadian Bankers Association and asked them a similar question, they were 50,000 feet up in the air. It was too far removed.

We know that the majority of businesses you can serve are SMEs. I'd like you to tell us about the concrete actions you're currently implementing or plan to implement, not what you did in the past, to adjust and help our businesses export, diversify their markets and move into new sectors. I'm thinking of BDC, which can adapt and finance sectors that weren't previously financed. I'm thinking of defence, for example.

My question is quite broad. I hope it will allow us to have a meaningful discussion today about how you plan to support SMEs. Your two organizations can act in a complementary way in this regard.

I'll leave it at that. I'll give you time to answer the question.

Who wants to start? It could be Ms. Dorval or Mr. Winterhalt.

[Véronique Dorval]

I'll start.

First of all, we're well aware that the changes we're facing are not just temporary, but structural.

Over the past year and a half, we've adapted very quickly to the situation. Many of the programs we're discussing today were launched in a matter of weeks—some of them in just days—to address these challenges. Indeed, we're well aware that entrepreneurs also have to adapt quickly.

In the current context, we believe that our core offerings remain relevant, but that we need to tailor our support to the affected sectors while investing in measures that will help businesses.

For example, we recently launched the LIFT program to help companies invest in productivity. We know that businesses need to invest in AI, robotics and automation, and we want to help them by offering consulting services and financing so they can implement measures that will make a difference. This is a more structural type of support aimed at improving productivity.

You also mentioned more support for strategic sectors. Defence is one of those strategic sectors. We are about to roll out a platform worth more than $6 billion over the next few years to support this sector, which is essential to our economic sovereignty and security.

We are currently reviewing our strategy, and we'll continue this work over the coming months to move forward in this direction. We'll determine which other strategic sectors we want to invest more in. I can tell you that productivity will continue to be a truly important factor.

The third aspect I'd like to address is business transition. Many business owners are reaching a point where they want to sell their companies, and this is a key opportunity to create value. We know that this turning point can either destroy or create value because it's also a time when organizations can significantly boost their productivity. This is another key area in which we're now actively engaged.