ARCHIVED — Vol. 147, No. 7 — March 27, 2013
SOR/2013-33 March 7, 2013
BUDGET IMPLEMENTATION ACT, 2009
Order Extending Export Development Canada’s Temporary Domestic Powers
P.C. 2013-291 March 7, 2013
His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 263(2) of the Budget Implementation Act, 2009 (see footnote a), amends Order in Council P.C. 2011-397 of March 10, 2011 (see footnote b), as amended by Order in Council P.C. 2012-282 of March 8, 2012 (see footnote c), by replacing “March 12, 2013” with “the earlier of March 12, 2014 and the day on which an amendment to subsection 5(2) of the Export Development Canada Exercise of Certain Powers Regulations comes into force”.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Order.)
In 2009, as part of Canada’s Economic Action Plan, the Government provided Export Development Canada (EDC) with temporary domestic powers in order to add capacity to credit and insurance markets. Specifically, through the Budget Implementation Act, 2009, the Export Development Act was amended for a two-year period to include domestic activities in EDC’s mandate, and the Ministerial approval requirements governing EDC’s domestic financing and insurance activities were temporarily suspended. A provision was also added into the Export Development Act to require that EDC’s activities under its temporary domestic powers be complementary to the activities of commercial financial institutions and commercial insurance providers.
Budget 2011 and Budget 2012 announced extensions of EDC’s temporary powers to March 12, 2012, and March 12, 2013, respectively, to help meet the financing needs of Canadian exporters. These extensions also enabled the Government to undertake a comprehensive assessment of EDC’s ongoing role in the domestic market.
While EDC’s temporary powers have contributed positively to providing additional credit and insurance capacity since 2009, these very broad powers are no longer required. Overall credit availability has improved since 2009, with aggregate data and broad credit surveys suggesting a general stabilization and modest recovery in business lending conditions over the past two to three years in Canada. However, an asymmetry in the regulations governing EDC’s domestic activities prior to 2009 may have prevented some Canadian exporters from receiving support from EDC in the past.
The Government is proposing amendments to the Export Development Canada Exercise of Certain Powers Regulations (the “Regulations”) to clarify EDC’s authority to enter into domestic transactions. The proposed amendments have been published in the Canada Gazette, Part I.
Since EDC’s temporary domestic powers were set to expire on March 12, 2013, before the proposed amendments come into force, an extension until March 12, 2014, is needed to ensure continuity during the transition.
- to allow for the necessary time to complete the regulatory process to support amendments to the Regulations; and
- to ensure some continuity in EDC’s provision of domestic support.
This Order extends EDC’s temporary domestic powers to March 12, 2014, or until the regulatory amendments come into force (whichever is earlier).
The “One-for-One” Rule does not apply, as there is no change in administrative costs to business.
Small business lens
The small business lens does not apply, as there are no costs on small business.
Stakeholder consultations have indicated a continuing desire on the part of domestic credit users to see EDC retain flexible lending powers in light of ongoing global economic uncertainty. At the same time, some stakeholders have expressed a desire to apply a constraint on EDC’s domestic powers to limit overlaps with private sector financial institutions and other Crown corporations such as the Business Development Bank of Canada (BDC).
The extension of EDC’s temporary domestic powers will ensure there is no gap between the expiry of the temporary powers on March 12, 2013, and the date when the regulatory amendments come into force. This will allow the necessary time to complete the regulatory process and allow for some continuity in EDC’s domestic powers.
For more information, please contact
International Finance Section
Department of Finance Canada
140 O’Connor Street, East Tower, 14th Floor