Vol. 146, No. 7 — March 28, 2012


SOR/2012-39 March 8, 2012


Order Extending Export Development Canada’s Temporary Domestic Powers

P.C. 2012-282 March 8, 2012

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), hereby amends Order in Council P.C. 2011-397 of March 10, 2011 (see footnote b) by replacing “March 12, 2012” with “March 12, 2013”.


(This statement is not part of the Order.)

Issue and objectives

As part of Canada’s Economic Action Plan in 2009, the Government provided Export Development Canada (EDC) with temporary flexibilities in order to fill gaps in the availability of domestic business credit. 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. Specifically, EDC was authorized to support and develop, directly or indirectly, domestic trade and Canadian capacity to engage in that trade and to respond to domestic business opportunities, subject to the requirement that its domestic activities be undertaken in a manner that complements the products and services available from commercial financial institutions and commercial insurance providers. In addition, the ministerial authorization requirements in the regulations governing EDC’s domestic financing and insurance activities were temporarily suspended. These temporary powers were originally set to expire on March 12, 2011, but were extended, by Order in Council, to March 12, 2012.

While still operating within its export mandate, EDC acted on the additional flexibility in its regulations to fill gaps in domestic credit availability. EDC provided this support in partnership with the Business Development Bank of Canada (BDC) and private sector lenders through the Business Credit Availability Program.

Recent surveys and data collected by the Bank of Canada suggest an overall stabilization and modest recovery in business lending conditions in Canada over the past two years, although the most recent data suggests that this recovery stalled in the last quarter of 2011. In addition, while the broad credit environment appears to be relatively stable in Canada, it remains highly fragile offshore, particularly in the context of the European sovereign and banking crisis and the potential for contagion outside Europe and in global credit markets.

Description and rationale

This Order extends EDC’s temporary domestic powers to March 12, 2013. This extension helps meet the financing needs of Canadian exporters amidst continuing uncertainty in credit markets by maintaining the additional flexibility for EDC to fill gaps in the domestic market in a manner complementary to the BDC and other financial institutions. This extension also enables the Government to complete a comprehensive assessment of the ongoing role that EDC should play in the domestic financing market, as part of the review of EDC’s domestic financing regulations that was announced in Budget 2011.

Failure to extend the temporary powers could limit EDC’s ability to support Canadian exporters in the domestic market and it remains uncertain whether existing domestic credit users would be able to obtain credit from other sources.

There are no costs associated with this Order.


Stakeholder consultations conducted by the Department of Finance and the Department of Foreign Affairs and International Trade officials in the second half of the 2010–11 fiscal year indicated a continuing desire on the part of domestic credit users to see EDC retain flexible lending powers. Recent feedback from exporters has reinforced the results of the consultations: credit markets are still very constrained and a return of U.S. and European bank financing to a pre-crisis risk appetite and scale is not expected.


For more information, please contact

Julie Trépanier
International Finance Section
International Trade and Finance Branch
Department of Finance Canada
Telephone: 613-992-2107

Footnote a
S.C. 2009, c. 2

Footnote b