Finance committee  The answer to that would be, no, never in our history, and not just domestically but internationally, which is our primary role. The international markets are very tight for financing also. Ordinary trade finance has shrivelled up. So we are very much in demand across the board.

Finance committee  Thank you. Yes, that paragraph you're referring to relates to the financing side of EDC. EDC is both, if you like, a bank and an insurance company. And it's true that easily two-thirds of the trade that we support uses our insurance products, but the other third or so uses our financing products.

Finance committee  That's an interesting question. We don't have a threshold under our export guarantee program for small companies. Their bank does the loan, and the bank has a channel by which they ask for a guarantee. It's 50% or 75%, depending on the situation. The amount is not really a question for us.

Finance committee  I am going to respond hypothetically, because I cannot discuss specific transactions. If a Canadian export company comes to see us and requests funding for machinery and equipment that will improve its ability to export, EDC will certainly be able to grant it a loan. In such a case, it is clear that this loan will depend on the quality of the Canadian company and its financial situation.

Finance committee  Thank you, Mr. Chair. Yes, the agreement is respected. EDC must comply with international legislation, which governs the agreement, and therefore, the commercial rate must definitely be commensurate with the risk. If we share the risk with another bank, we are sure to have the commercial rate because we are on an equal risk basis with the same conditions.

Finance committee  That would be a very difficult scenario for us.

Finance committee  Are you referring to the rate paid by the Canadian company?

Finance committee  EDC operates on a commercial basis. Its rates are determined by the commercial market. This is very important, because the EDC does not give subsidies to businesses. That would go against international rules set by the World Trade Organization. It is very useful for Canadian companies.

Finance committee  Thank you for the question. The Canada Account is a separate facility that is actually run by the government itself, and EDC is simply the agent that takes care of the transactions on behalf of the government, so the loans that appear on Canada Account are government risk as opposed to EDC risk.

Finance committee  That's a difficult judgment for me to make. The restructuring plans are very good plans. I think the economy will recover next year. Car sales will recover, so I think there's a reasonable expectation.

Finance committee  A loan of that degree of risk would normally be provisioned on the order of 30% or 40%. That would be normal commercial practice. These rules of thumb are followed by almost all banks, including EDC.

Finance committee  It's just a provision to ensure that you have a reasonable amount of funds in the vault in case there is a writeoff. It's attaching a probability based on the rating. Let's say it's a triple-C rating or a double-B rating; these are formulas all banks follow. The provisioning rates would vary from as low as 4% or 5% for a very high-quality loan to something over 30% for a lower-quality loan.

Finance committee  I'm generalizing. In response to your question, I don't actually know exactly what provision rate was chosen for these particular loans.

Finance committee  The honourable member is correct in thinking that it's obviously not a commercial loan in the usual sense, and that therefore the provisioning rate would theoretically be higher. However, it is a very complicated process to choose that rate, and I don't really know what the government has chosen.

Finance committee  Certainly. When we're in a phase of the business cycle when risks are higher, such as now, companies are much more likely to make use of EDC's insurance services. Exporting sounds like a very easy thing of getting a sale and getting the money, but in fact there's a lag between making the sale and getting the money, and that lag can be 60 days, 90 days, 120 days, this sort of thing.