OTTAWA, March 12 /CNW Telbec/ - Export Development Canada (EDC) today
announced that its combined financing and insurance volumes reached a record
$66.1 billion in 2006, a 15 per cent increase over 2005. EDC also facilitated
a record $15.2 billion in trade with emerging markets and $6 billion in
Canadian direct investment abroad in 2006, increases of 14 per cent and
50 per cent, respectively, over 2005.
"Canadian exporters had a challenging year in 2006, dealing with a higher
Canadian dollar and energy costs while seeking to grow and invest in riskier
emerging markets," said President and CEO Eric Siegel. "We saw a significant
increase in 2006 of companies taking on a more globalized business approach,
and their finance and insurance needs drove EDC to record results. EDC's
strong balance sheet allowed us to take on greater risk on their behalf, when
and where they needed us the most."
Brazil, Russia, India, China and Mexico continue to be the priority
markets for Canadian companies because of their growth rates, importance to
global supply chains and alignment with Canadian strengths. EDC business
volumes in these markets totaled more than $6.8 billion in 2006, up 26 per
cent from $5.4 billion in 2005, with notable growth in Mexico at $2.6 billion
(2005 - $1.6 billion), India at $730 million (2005 - $375 million) and Russia
at $750 million (2005 - $502 million).
"EDC's new representations in China and Russia have allowed us to deepen
our relationships with local buyers and borrowers, the key customers of
Canadian exporters and investors," continued Mr. Siegel. "We first established
representation abroad ten years ago. Today we have a permanent presence in ten
key cities in high growth emerging markets, and we are working closely with
the Government of Canada's Trade Commissioner Service to help Canadian
companies establish the connections they need to grow their business abroad."
EDC performs a key role in the Government of Canada's global commerce
strategy. In 2006 EDC participated in nearly 13 per cent of Canada's total
exports in goods, services and investments, with that total climbing to
30 per cent in Canada's trade with emerging markets.
The transactions facilitated by EDC in 2006 are estimated to have
generated $44.6 billion of Canada's GDP or 3.9 per cent of the total. This
export and investment activity was also associated with sustaining more than
546,000 jobs, representing approximately 3.3 per cent of national employment.
More than 85 per cent of EDC's customers are small- and medium-sized
EDC's net income in 2006 was $1.22 billion compared to $1.29 billion in
2005. The key components affecting net income were a release of provisions and
an increase in net financing and investment income. In 2006, EDC released
provisions in the amount of $376 million, due primarily to continued
improvements in the credit environment and successful airline restructurings.
Net financing and investment income increased mainly due to an increase in
debt relief income and a reduction in impaired loans.
EDC's operating income increased by 7.1 per cent to $880 million in 2006,
aided by the receipt of $261 million in debt relief income in 2006 compared to
$64 million received in the same period last year. Debt relief occurs when the
Government of Canada forgives sovereign debts to highly indebted developing
countries for debts incurred in prior years. EDC is then reimbursed for an
amount equal to the debt relief granted by the Government of Canada.
EDC's business activities were strong across most regions of Canada.
Regionally, western Canada led the country, accounting for 35.3 per cent of
EDC's total business volume followed by Ontario (32.9 per cent), Quebec
(27.4 per cent), and Atlantic provinces (2.1 per cent).
"In 2007 our job at EDC will be not only to deliver on what Canada's
exporters and investors need today, but to anticipate what they will need to
succeed tomorrow," continued Mr. Siegel. "Our strong financial position will
allow us to continue to show greater flexibility especially in higher risk
Other key results include:
- EDC's assets increased by 16 per cent to $22.8 billion from
December 31, 2005;
- The total allowance for loan-related losses and insurance claims was
$2.4 billion at December 31, 2006;
- Total paid-in capital, retained earnings and allowances at December 31,
2006 were $8.4 billion;
- Impaired loans as a percentage of gross loans receivable decreased from
18.4 per cent at the end of 2005 to 8.2 per cent at December 31, 2006,
reflecting the reclassification of impaired loans to performing status
primarily within the aerospace industry;
- EDC received 27 aircraft from the defunct Independence Air, 15 aircraft
from Northwest Airlines, four from Delta Air Lines and one from Comair.
The 15 aircraft from Northwest Airlines have been returned to Northwest
as part of the restructuring agreement with EDC. EDC has successfully
placed 28 aircraft with new operators and there are pending sales
agreements for the remaining four;
- The number of insurance claims paid was 1,290, a 2.1 per cent decrease
from 2005. The dollar value of those claims was $61 million compared to
$44 million in 2005;
- Costs paid in 2006 for business travel and promotion by the 12-member
Board of Directors, as well as meeting expenses for the Board and
Committees, totaled $125,711, in comparison to $158,320 in 2005 (all
figures are exclusive of the expenses of the President). For the
President and Acting President, expenses for business travel, promotion
and conference fees were $66,238 compared to $60,160 in 2005;
- The number of employees at December 31, 2006 was 1,056, an increase
from 1,017 in 2005; and
- Administrative expenses increased by 11.5 per cent to $203 million,
from $182 million in 2005, mainly due to higher pension costs and the
increased headcount in support of business development activities and
EDC is Canada's export credit agency, offering innovative commercial
solutions to help Canadian exporters and investors expand their international
business. EDC's knowledge and partnerships are used by 7,000 Canadian
companies and their global customers in up to 200 markets worldwide each year.
EDC is financially self-sustaining and is a recognized leader in financial
reporting, economic analysis and has been named one of Canada's Top 100
Employers for 6 consecutive years.
For further information:
For further information: Media contact: Phil Taylor, Public Affairs,
Export Development Canada, (613) 598-2904, email@example.com