April 9, 2020
Summary from April 9 CCPPP Conference Call: COVID-19 & the Infrastructure Sector
To start our call, Mairead Lavery, President and CEO of Export Development Canada
, joined us to give participants an overview of the EDC’s domestic support for Canadian companies impacted by COVID-19
- EDC understands this is a challenging time for international trade, Canadian companies and the economy. This is why we have adjusted our focus and flexibility to enhance our product and service offering to reflect the current needs of Canadian businesses.
- EDC is working in collaboration with our federal partners and Canadian financial institutions to help minimize the impact on Canadian companies.
- As part of a coordinated response to the COVID-19 pandemic, in March 2020, the Government of Canada announced several economic stimulus measures including a $40-billion Business Credit Availability Program (BCAP) to help Canadian businesses access credit during this period of uncertainty.
- Financial support through BCAP is provided through EDC and BDC, and in coordination with private sector financial institutions. Businesses looking for support through BCAP can start by contacting their financial partners (banks or credit unions) today. The BCAP offers support for Canadian businesses impacted by COVID-19 in all regions and sectors.
- The COVID-19 pandemic has put the global economy in its most tenuous position since the 2008-09 financial crisis. As part of a government-wide response, EDC and other public and private financial partners are bringing liquidity into the market to provide relief to companies facing the challenges brought on by the pandemic. BCAP will enable EDC and BDC to work alongside private financial institutions to ensure these needs are met.
- The $40-billion BACP program is broken down into two parts:
- EDC Loan Guarantees: $20 billion
- BDC Co-Lending Program: $20 billion
- With EDC’s BCAP Guarantees, EDC will guarantee 80% of new operating credit and cash-flow term loans that financial institutions extend to small to medium sized enterprises, to a maximum of $6.25 million. These loans have a 1-year term with the possibility to renew. All companies qualify for a six-month deferral on fee payments to EDC.
- These guarantees are not only for exporters and international investors, but also domestic business. The government temporarily (until December 2021) expanded EDC’s mandate to facilitate support for domestic business. This broader mandate will help more companies brave the challenges of these extraordinary times by enabling EDC to provide emergency liquidity.
- In addition to the BCAP Guarantee, EDC has enhanced other financing and insurance programs to further support companies facing liquidity problems:
- Payment deferrals have been applied under some of its financing programs.
- Exposure limits for several programs have been raised in anticipation of increased demand from Canadian businesses.
- EDC’s risk appetite has increased within the credit insurance program to cover more Canadian exporters looking to insure their sales against non-payment.
- For credit insurance, EDC will cover losses for goods shipped even if the buyer has not accepted the goods (subject to terms) and waive the 60-day waiting period for claims.
- EDC also provides timely and relevant information through its insights, tools and advice like Export Help Hub. Through a MyEDC account Canadian businesses can access free services and information.
- To learn more about the assistance it is offering to Canadian businesses, EDC is hosting a webinar on Thursday, April 16. More details.
Thank you to everyone for joining the call. Our next conference call will be held on Thursday, April 16 from 1 p.m. to 2 p.m. ET.