International Issues

Chapter 2
Export Financing

Most of the developed countries have an export credit agency to promote exports. In Canada, the federal government has created a Crown corporation, Export Development Canada (EDC) to act as a bridge between the support provided by the banks and what Canadian exporters need to succeed in export markets. EDC provides financial and insurance services to exporters, especially smaller firms. EDC’s services include credit insurance, political risk insurance, direct loans to buyers, and lines of credit in other countries to encourage buyers to “buy Canadian.” Exports are crucial for Canada because exports account for one in three jobs. EDC helps Canadian exporters get paid. Approximately 85 percent of Canadian exports go to the US.

In January 2003, EDC announced that it had extended $3.8 billion in trade finance and risk management services to finance or insure export sales by 27 Canadian companies in the aerospace sector during 2002. This compares with $3.4 billion in 2001. The majority of EDC exposure in the aerospace sector is secured by mortgages on aircraft operated by 26 of the world’s leading airlines and their regional affiliates. Exports aided by EDC have enabled the Canadian aerospace industry to become the third largest in the world, employing more than 85,000 Canadians in 400 companies across the country.

[For more information see www.edc.ca]

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