Export agency sees Brexit as opportunity for Canadian firms
It may seem counter-intuitive, but Canada’s money-provider for export-driven companies is revving up its decades-long presence in the U.K., just as many global firms are looking to leave.
Export Development Canada on Thursday officially opened a permanent office in London, increasing its profile only months after the June 23 referendum narrowly backed a British exit from the European Union — the ramifications of which are only now beginning to wend their way through the economy.
So far, the “Brexit” victory shocker has rattled markets worldwide and led many countries to lower their growth forecasts in the near-term as negotiations between Britain and the EU have yet to begin — and will take as much as five years to complete — if talks actually go ahead without some kind of compromise.
Not the most inviting climate for foreign firms. So, why would the EDC choose to expand now?
“Where some see risk and volatility after the Brexit vote, EDC sees opportunity,” said Mairead Lavery, senior vice-president responsible for business development at the Ottawa-based federal credit and financing agency.
“We recognize that even in volatile political times, business almost always finds a way to continue, and it’s EDC’s job to offer Canadian businesses stability and reliability for their long term growth,” she said.
“While we have been planning the London representation for a number of years, the circumstances are such that Canadian companies now have on-the-ground resources to help them manage the Brexit uncertainties.”
EDC has been helping Canadian companies establish international operations for more than 70 years. In the past year, the Crown agency has helped finance about $4.1 billion worth of business between Canada and the U.K. and now has about 500 customers in the country.
Not surprisingly, given Canada’s heavy reliance on natural resources for income, our biggest exports to Britain include gold, nickel and oil. Services and investment businesses are also part of the export mix.
With the addition of London, the EDC now has nearly 20 permanent operations around the world — from Beijing, Moscow and New Delhi to Mexico City, Singapore and Jakarta.
“While we expect to see a slight dip in export growth to the UK, with the new government’s focus on bilateral trade agreements, this lull should be short lived,” said EDC chief economist Peter Hall.
“We understand risks, and we understand risk management. We’ve seen volatility before, and we faced it head on. Now we’re here to do it again, and help Canadian businesses feel secure in their global business.”