Over the course of the EDC’s existence, the multibillion-dollar government agency has carried out a number of risky, unethical, and controversial deals with foreign parties which have contradicted Canada’s political stances, threatened valuable funds, and tainted Canada’s international image.
The most recent of these offenses came in 2014 involving the South African company, Westdawn Investments. Owned by the South African/Indian Gupta brothers, two well-known gangsters, the deal made with the EDC was for the purchase of a new jet from the Canadian company, Bombardier. The infamous Gupta brothers are widely known for their alleged relationship with former South African President, Jacob Zuma. Their close association with the former president is connected to many political scandals, including the siphoning off of hundreds of millions of dollars from state-owned companies, pushing for political decisions to be made, and other cases of corruption. Given their political toxicity and legal troubles, the Gupta brothers were unable to secure a deal with any financial institution for the $41 million they needed to purchase a new jet.
However, the EDC did not hesitate to provide the Gupta brothers with the funding they needed; an act government agencies around the world rightfully refused to do. With their funding, the brothers did indeed purchase a jet from Bombardier, however, it has recently been revealed that this jet has gone missing and that the brothers have had warrants for their arrest issued after stealing over $20 million from a government fund, all the while defaulting on their $41 million loan from the EDC.
Yet this is just one of many controversial deals the EDC has carried out. Vedanta, a mining company out of India, is another one of the companies the EDC has chosen to provide funding to, regardless of their track record. Vedanta has faced much backlash regarding their health and safety practices, including those by Amnesty International which have accused the firm of “seriously undermining the quality of life and threatening the health” of thousands of people, displacing Indigenous people in India, and causing environmental damage. These accusations have led many international financiers to cease doing business with the Vedanta and also clearly contrast Canadian morals and the Liberal government motive to protect the environment. However the EDC has still provided this company with over $100 million dollars in funding, without providing the public with any breakdown of where Vedanta money is being spent, so there is no verification that the money is making its way back into Canada.
There have been other issues with the EDC’s activity domestically, including the fact that the agency, with its enormous size and ability to borrow at the federal government rate, has begun to muscle out private competition. Now controlling 80% of the corporate credit insurance market, the EDC has choked out private lenders, which is largely counterintuitive because if private companies are willing to provide foreign parties with money, why does the EDC need so much power and need to risk taxpayer money rather than letting competition flourish?
In examining these cases and many others like them, it has been made clear to the EDCRI that the EDC is currently not conducting enough background research into their potential clients and are not adequately upholding the Canadian ethos and image. Canada as a country does not support corruption, violation of human rights, and pollution of the environment, so why does one of our capital agencies? It is time that the EDC begin to uphold the Candian spirit in their activities and ensure that all their work is in full sport of Canada and its economy. The EDCRI has proposed several new regulations to be put in place to ensure this occurs, which can be read on our other pages.
Export Development Canada Regulation Intiative 