In a telling sign that Ottawa doesn’t think the credit market has sufficiently loosened up in the wake of the economic recession, the government is expected to announce the extension of Export Development Canada’s domestic lending powers.
The crown corporation is traditionally an export lender, but in the wake of the global economic downturn in 2008, Ottawa decided to allow the EDC to also lend to companies for their Canadian operations. That mandate was already extended for another year in 2011. Now it’s set to be extended again.
Some people have argued that there’s a place for the EDC to permanently deliver credit domestically, while the Canadian Bankers Association has said that it shouldn’t interfere with the private lending industry in Canada.
Since getting the green light to lend domestically, the EDC has provided $9 billion in loans in Canada. After months of static employment numbers, maybe it makes sense for the government to keep that money flowing to Canadian businesses.