2010-2014 Corporate Plan Summary - EDC

EDC’s trade finance and risk management solutions fall under four product
groupings: credit insurance, financing, contract insurance and bonding, and political
risk insurance. The following describes in more detail how these solutions are being
used to facilitate trade and investment under its core mandate and under its
temporary domestic mandate.
EDC’s Core Mandate
Trade finance and risk management of exports and investments continue to be EDC’s
long-term focus and competency. EDC was created to enhance Canada’s trade
performance and the Corporation will continue to fulfill its core mandate by offering
solutions which enable Canadian companies to grow their business internationally.
Credit Insurance
Through EDC’s suite of export credit insurance products, companies are able to
manage the risks associated when selling to unknown foreign customers or those
buyers who present higher risks, and are able to extend better payment terms and
credit options to their buyers. EDC’s insurance policies cover a wide range of risks
facing exporters, including buyer insolvency.
In the current credit-constrained environment, Accounts Receivable Insurance (ARI)
has been a particularly valuable tool for Canadian companies looking to free up or
access working capital. EDC’s ARI policies provide needed leverage for companies to
work with their banks to margin insured receivables. EDC has seen a dramatic
increase in demand for its ARI policies, resulting in a 56% increase in applications in
the first six months of 2009 compared to the same period in 2008.
Looking ahead, EDC is working to build a more effective partnership model with the
private sector credit insurers to strengthen capacity in the Canadian export
receivables market.
To that end, building on the successful working relationship developed in the
domestic market (see page 21), the Corporation is engaging with the private sector to
identify how it can use its capacity and balance sheet to fill market gaps, including
through reinsurance, with the objective to grow the market in Canada, and help the
private sector maintain and build relationships with their clients and prospects.
Chapter 2 – EDC’s Business Strategy
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