If 2020 was a year that will always be remembered for keeping people apart, it may also be remembered as the year in which the Canadian financial system – government departments, Crown corporations and financial institutions – pulled together like never before.
The Chair’s message in any annual report usually references global events to provide some colour for the corporation’s story the previous year. But reflecting on 2020, it’s one global event – the COVID-19 pandemic – that was the story, and still is. It touched everything: our people, customers, priorities, programs, and even our mandate.
More change has taken place at Export Development Canada over the last year than in the previous five years combined. I’m proud to say that the corporation met the moment and stepped up in a big way for Canada.
But before I get into accomplishments and the year that was, I think it’s important to make clear, on behalf of everyone at EDC, our recognition that there is still much more work to be done. Canada and the world remain in a crisis. Canadian businesses are still suffering, and there is a long road ahead. While EDC did a lot of good in 2020, the details of which you’ll find in the pages of this report, there are a lot of companies out there that still need help.
EDC employees have a tradition of bringing real passion to their work in support of Canadian companies. This crisis has added gravity and urgency to this mission, and our people have responded by doing more and doing it faster, even while dealing with their own personal pandemic challenges. EDC’s President and CEO, Mairead Lavery, touches more extensively on that story in her message. On behalf of the Board, I’ll just say that the level of agility and innovation shown by our employees was inspiring. It carried us through this unprecedented year, and I know it will continue to drive us forward in the year ahead.
If 2020 was a year that will always be remembered for keeping people apart, it may also be remembered as the year in which the Canadian financial system – government departments, Crown corporations and financial institutions – pulled together like never before. In a banking career that spans more than 30 years, and which includes the 2008–2009 recession, I have never seen such teamwork displayed on a national level. In name and in character, it truly was a Team Canada approach to the pandemic response.
The Canada Emergency Business Account (CEBA) is perhaps the best example of this. The Government of Canada announced the $73 billion program in March, when the economic toll of the pandemic was first becoming clear. The program offers interest-free loans of up to $60,000 for small businesses and eligible non-profits to help bridge them through the crisis.
EDC manages all aspects of the CEBA program and acts as a conduit – using its expertise to manage the transfer of funds from federal coffers to financial institutions, where those monies could then be disbursed to business owners. EDC worked closely with the Government of Canada and leveraged its extensive reach with Canadian financial institutions to deliver the program quickly. In response to feedback from Canadian business owners – some of it coming through a call centre managed by EDC – CEBA has been expanded and enhanced several times.
By the end of 2020, more than 800,000 loans had been issued through the program, getting almost $40 billion into the hands of Canadian businesses.
The Business Credit Availability Program (BCAP) was another great example of Team Canada collaboration. Also launched in March, it brought EDC together with Business Development Bank of Canada (BDC), the Government of Canada and Canadian financial institutions to support the immediate cash flow needs of companies in crisis. Several products were rolled out as part of BCAP; prominent among them were EDC loan guarantees for banks that enabled them to lend with greater confidence to businesses in need.
As of December 31, 2020, EDC had completed almost 800 guarantees through BCAP, guaranteeing $850 million of the $1.1 billion in loans extended to Canadian companies by financial institutions.
In the months following the launch of BCAP, EDC announced the creation of an investment matching program; its purpose was to deploy matching capital in companies that were raising funding from the private sector, including institutional investors, venture capital funds, private equity funds and corporate partnerships. This was an innovative way to help high-potential companies, many of them in the cleantech sector, weather adverse economic conditions and execute on commercialization and growth plans that were affected by the pandemic. The program supported 56 companies in 2020 with a total of $126 million in funding.
Building on the momentum gained through these special programs, at the end of 2020 the Government of Canada launched the Business, Economic and Trade Recovery (BETR) committee. This brought together all the organizations under the portfolio of the Minister of Small Business, Export Promotion and International Trade, including EDC, BDC and the Canadian Commercial Corporation, with the goal of forming a web of support for Canadian companies. BETR will identify and fill gaps in service, catalyze business growth and enable seamless support across all the member organizations. It will also launch initiatives that target specific sectors and markets of opportunity. The committee’s activities will play a big part in Canada’s pandemic response efforts in 2021.
These initiatives helped a lot of companies last year, but, as we all know, the negative effects of the pandemic have been vast. One particularly troubling outcome from 2020 is how historically underrepresented groups in business – including Black people, Indigenous Peoples, people of colour, the LGBT+ community and women – fared versus their peers.
The economic inequalities faced by these groups, who were already at a disadvantage prior to the pandemic, were only magnified, as they lost more contracts and jobs compared to the broader population. Not only did this make it more difficult to stay afloat, but looking forward it will make recovery that much more challenging. This further reinforces the need to prioritize inclusive trade.
Within this context, EDC continued to take steps forward in 2020. Notably, we committed to facilitating $2 billion in trade for women-owned businesses by 2023, eight times the $250 million commitment that we first set out (and since surpassed) in 2018. We launched our Indigenous exporter strategy, with year one dedicated to building partnerships and awareness of EDC within the Indigenous business ecosystem. And we started work on our first supplier diversity program, with the goal of creating more opportunities for diverse businesses within our own supply chain.
While the turbulent year that was 2020 has officially passed, the turbulence hasn’t. The pandemic will again be a story in 2021, but hopefully not the story.
Without a doubt, EDC’s achievements deserve recognition. But this is not a time for celebration. Too many Canadian businesses still struggle, and, as long as that’s the case, I know EDC will work tirelessly to provide relief where it can.
The past year may not be remembered for its rosy headlines. But it was a year in which so many people in government, in business and in finance, public and private, pulled together. That co-operation was a positive story in 2020, and I’m confident it will continue to be in the year ahead.