Other loans and advances

Public Accounts of Canada 2023 Volume I—Top of the page Navigation

• Previous page: Capital Subscriptions—International organizations
• Section 9: Table of contents: Section 9: Loans, investments and advances as at March 31
• Next page: Allowance for valuation

Unconditionally repayable contributions

Unconditionally repayable contributions are in substance loans and are generally made to businesses pursuant to various acts of Parliament, with various amounts outstanding.

These loans are aimed at stimulating economic development or for assistance and accomplishing sustainable development goals. They bear various interest rates, some of which have concessional terms, and are repayable at various due dates.

Loans made on a long-term, low-interest or interest-free basis are recorded in part as expenses when the economic value of the loans is reduced due to their concessionary terms.

Agriculture and Agri-Food

Department of Agriculture and Agri-Food 

Unconditionally repayable contribution programs include the Agri Innovate Program, Agri Innovation Program, Agricultural Innovation Program, Emergency Processing Fund, Agri-based Processing Initiative, Agri Risk Program, Agri-Opportunities Program and the Canadian Agricultural Adaptation Program. The objective of these programs is to support the following initiatives: accelerate the pace of innovation and facilitating the commercialization and adoption of innovative agri-based products, technologies, processes and services in the agriculture, agri-food and agri-based products sector. The unconditionally repayable contributions are repayable by 2035 with final instalments generally due within 8 to 10 years following project completion. The amount to be repaid and repayment schedule are set out in each contribution agreement. Repayments are non-interest bearing within the specified repayment period and normally begin 1 to 3 years following the completion of the project.

Economic Development Agency of Canada for the Regions of Quebec

The unconditionally repayable contribution programs have two main thrusts. The first is the Regional Economic Growth through Innovation program, which aims to promote the economic growth of businesses and regions through innovation by grouping together the following programs, funds and initiatives: Jobs and Growth Fund, Business Scale-Up and Productivity and Aerospace Regional Recovery Initiative. The Quebec Economic Development Program is another repayable contribution program. This program is designed to help communities seize promising economic development and diversification opportunities and includes several initiatives, programs and funds: Development and Promotion of Assets and the Regions, Local development, Jobs and Growth Fund, and others. Unconditionally repayable contributions are repayable by March 1, 2033, with final payments generally due within 5 to 10 years of project completion, with a 2-year grace period. The amount to be repaid and the repayment schedule are defined in each contribution agreement. Repayments are interest-free throughout.

Finances

Department of Finance

Canada made an unconditionally repayable contribution of $200 million to the Alberta oil and Gas Orphan Abandonment and Reclamation Association Canada (the Orphan Well Association) to support association's efforts in cleaning up oil and gas properties. The contribution does not bear interest and is repayable in 16 equal quarterly instalments starting in 2032 and ending in 2035. Earlier repayment is permitted.

Fisheries, Oceans and the Canadian Coast Guard

Department of Fisheries and Oceans

Atlantic Fisheries Fund

This account was established to record unconditionally repayable contributions awarded to various recipients under the Atlantic Fisheries Fund transfer payment program. The terms and conditions of the loans vary by recipient and are as follow:

• The loans bear no interest and are repayable over terms of 5 to 10 years, with the final installments between 2028 and 2034.
• The loans bear no interest and are repayable in one lump sum payment in 2023.

Quebec Fisheries Fund

This account was established to record unconditionally repayable contributions awarded to various recipients under the Quebec Fisheries Fund transfer payment program. The loans bear no interest and are repayable over terms of 9 to 10 years, with final installments between 2031 and 2034.

Global Affairs

Department of Foreign Affairs, Trade and Development

Unconditionally repayable contributions are provided under two specific programs: the international climate finance program, which helps developing countries in mitigating the effects of and adapting to climate change; and, the International Assistance Innovation Program, which contributes to building markets that support investments in sustainable development that benefit the underserved in developing countries. Unconditionally repayable contributions are provided to Multilateral Development Banks as well as to other financial institutions or investment managers whose mandate is focused on international development.

Fixed unconditionally repayable contributions have interest rates between 0.25% to 1.00% per annum, with semi-annual repayments, no security held for the loan, unforgivable, with grace periods of 5 to 15 years and maturity dates from 2032 to 2052.

Unconditionally repayable contributions that are reflow-based have a nil interest rate. In such cases, annual or semi-annual repayments are based on returns earned by the counterparty, no security is held for the loan, with grace periods of 0 to 5 years and maturity dates from 2031 to 2051.

Pacific Economic Development Agency of Canada

Unconditionally repayable contributions programs include Western Innovation Initiative, Business Scale-up and Productivity, Tourism Relief Fund, Regional Recovery and Relief Fund, Jobs and Growth Fund - Innovation, and the Aerospace Recovery Initiative. The objectives for these programs are to support: creating a diversified, stronger, inclusive economy in British Columbia; funding businesses to scale up and produce innovative goods, services or technologies; funding tourism businesses to adapt to health regulations and position for growth funding; funding businesses affected by COVID-19 to continue operations, retain staff and prepare for recovery; funding businesses to create jobs through green, digital and inclusive growth; and funding for the aerospace sector to become greener and more productive and to better reach global markets. The unconditional repayable contributions are repayable by 2033 with final installments generally due within 6-8 years following the project completion. The amount to be repaid and repayment schedules are set out in each contribution agreement. Repayments are non-interest bearing within the specified repayment period and normally begin 1-3 years following the completion of the project.

Indigenous Services

Federal Economic Development Agency for Northern Ontario

Unconditionally repayable contribution programs include Northern Ontario Development Program and Regional Economic Growth through Innovation. The objective of these programs is to create opportunities for economic growth by helping businesses become more competitive, innovative and productive, by working with diverse communities to develop and diversify local economies, and by championing the strengths of the region. The unconditionally repayable contributions are repayable by 2035 with final instalments generally due within 3 to 10 years following project completion. The amount to be repaid and repayment schedule are set out in each contribution agreement. Repayments are non-interest bearing within the specified repayment period and normally begin 1 to 3 years following the completion of the project.

Innovation, Science and Industry

Department on Industry

Unconditional repayable contributions programs are comprised of Technology Partnerships Canada, Program for Strategic Industrial Projects, Strategic Aerospace and Defence Initiative, Strategic Innovation Fund and Automotive Innovation Fund. These programs have varied objectives which include: supporting advancements in science and technology, knowledge, and innovation to strengthen the Canadian economy; encouraging strategic research and development, enhancing the competitiveness of Canadian aerospace and defence companies; encourage research and development that will accelerate technology transfer and commercialization of innovative, facilitate the growth and expansion of firms in Canada and attract and retain large scale investments; support strategic, large-scale research and development projects in the automotive sector in developing innovative, greener and more fuel-efficient vehicles. Unconditional repayable contributions are to be reimbursed by 2046 with final repayments generally due between 5-25 years after the completion of the funded project. Amounts to be reimbursed and repayment schedules are included in each contribution agreement. The amount to be repaid is determined based on the risk level as identified during the due diligence phase of the project along with the terms and conditions specific to each program. Repayment obligations are usually equal to the amount of funding provided and start within 2 years following the completion of the projects. A limited number of agreements have repayment obligations above the nominal amount of the funding provided.

Atlantic Canada Opportunities Agency

Unconditionally repayable contribution (URC) programs are included in three of the programs offered at the Agency. These programs are Business Development, Regional Economic Growth through Innovation, and Atlantic Innovation Fund. These contributions must be repaid without condition, and the loans have significant concessionary terms as they include a no-interest clause. Furthermore, they have various repayment terms. Terms for all related unconditionally repayable contributions have historically been paid within an average of 7 years, with the maximum allowable term established at 10 years for Business Development and the Atlantic Innovation Fund; and 15 years for the Regional Economic Growth through Innovation. The modified effective rate method is used to discount the loans receivable.

Canadian Northern Economic Development Agency

Unconditionally repayable contribution programs include the Inclusive Diversification and Economic Advancement in the North Program, Jobs and Growth Fund, Northern Isolated Communities Initiative Fund and Regional Economic Growth Through Innovation Initiative. The ultimate outcomes of these programs include: foundational investments in key sectors of the territorial economies, businesses are innovative and growing, communities are economically diversified, improved food security in northern and Indigenous communities, and business productivity and scale-up. The unconditionally repayable contributions are repayable over a period between 9 and 13 years, with final installments due between 2031 and 2036. The amount to be repaid and repayment schedule are outlined in each contribution agreement. Repayments are non-interest bearing within the specified repayment period and normally begin 1 to 2 years following project completion.

Department of Western Economic Diversification

Unconditionally repayable contributions programs include Western Diversification Program, Western Innovation Initiative, Business Scale-up and Productivity, Regional Recovery and Relief Fund, Jobs and Growth Fund, Regional Air Transportation Initiative, the Community Adjustment Fund, and Loan and Investment Program. The objectives for these programs are to support: creating a diversified, stronger, inclusive economy on the Prairies, funding businesses to create jobs through green, digital and inclusive growth; funding businesses affected by COVID-19 to continue operations, retain staff and prepare for recovery; funding tourism businesses to adapt to health regulations and position for growth; and funding for regional and local air carriers and airports in the Prairie provinces to support economic growth. The unconditional repayable contributions are repayable by 2033 with final installments generally due within 6-8 years following the project completion. The amount to be repaid and repayment schedules are set out in each contribution agreement. Repayments are non-interest bearing within the specified repayment period and normally begin 1-3 years following the completion of the project.

Federal Economic Development Agency for Southern Ontario

Unconditional repayable contributions programs for FedDev Ontario include the Southern Ontario Prosperity Program and the Regional Economic Growth Through Innovation Program. These programs aim to promote an innovative and inclusive southern Ontario economy through investments in regional growth, commercialization and adoption of technologies, as well as community diversification. The unconditional repayable contributions are repayable by 2033 with installments bearing zero percent interest repayable over a period of 3 to 10 years following project completion. The various installment amounts by project normally start 1 to 3 years after project completion and are based on their respective repayment schedules as set out in each contribution agreement.

Natural Resources

Department of Natural Resources

Unconditionally repayable contributions are associated with the Emissions Reduction Fund (ERF). The objective of the ERF is to help onshore and offshore oil and gas companies by providing funds to invest in green solutions to reduce greenhouse gas emissions, with a focus on methane, and retain jobs in the sector. The unconditionally repayable contributions are non-interest bearing loans, repayable over a period of up to 5 years from project completion date, with the final instalment no later than March 31, 2028.

Loans and accountable advances

Missions abroad

Non-interest bearing advances have been made for interim financing of expenses at missions abroad, pending distribution to appropriations of the Department of Foreign Affairs, Trade and Development and other departments and agencies.

The total amount authorized to be outstanding at any time is $50,000,000.

Personnel posted abroad

A working capital advance account was established to finance loans and advances to employees posted abroad, including employees of other government departments and agencies, as well as medical advances to locally-engaged staff.

The total amount authorized to be outstanding at any time is $38,200,000, as last amended by Foreign Affairs and International Trade Vote L12c, Appropriation Act No. 5, 2009–2010.

The closing balance consists of loans to employees of $14,175,824 advances for medical expenses of $1,066,890 advances for workmen's compensation of $681, security and other deposits under Foreign Service Directives of $1,956,983 and school and club debentures of $2,694,179.

The loans to employees bear interest at rates from 1.00% to 4.50% per annum. These rates are established by the Department of Finance and are repayable within 4 years.

Working Capital Fund

A Working Capital Fund was established to finance temporary advances to departmental personnel within Canada and abroad for: (a) salary and benefits; (b) standing advances; and (c) travel and miscellaneous claims. The name of the account was modified in order to reflect the use of the account by National Defence.

The authorized ceiling is $120,000,000, as last amended by the Department of National Defence Vote L11b, Appropriation Act No. 4, 2001–2002.

Miscellaneous accountable advances

The closing balance reflects amounts outstanding in the hands of departments, agencies and individuals, at year end, to be expended in the following year.

Miscellaneous accountable imprest funds and standing advances

This account is operated to provide imprest funds, accountable advances and recoverable advances to departments and agencies.

The total amount authorized to be outstanding at any time is $22,000,000.

Construction of multi-purpose exhibition buildings

The remaining loan has been made to finance the construction of a multi-purpose exhibition building.

Hog Industry Loan Loss Reserve Program

Loans made by financial institutions under the Hog Industry Loan Loss Reserve Program are partially guaranteed by the Crown. Where the producers have defaulted and the lenders have carried out regular collection activities, the Crown becomes subrogated to the lender's rights against the producer in default, to the extent of an amount equal to the withdrawal from the Reserve Fund.

National Marketing Programs

Loans made by financial institutions under the Canadian Agricultural Loans Act and advances made by producer organizations under the Agricultural Marketing Programs Act are guaranteed by the Crown. Where the guarantee is honoured, the Crown becomes subrogated to the financial institution's or producer organization's rights to outstanding principal, interest and costs.

Western Livestock Price Insurance Program

The deficit financing clause under the Western Livestock Price Insurance Program multilateral agreement allows for advances from the Consolidated Revenue Fund to the Western Livestock Price Insurance Program account. The Western Livestock Price Insurance Program enables livestock producers to purchase price protection on specific cattle and hogs in the form of an insurance policy. When the balance in the account is insufficient for the payment of amounts to be charged to it, repayable advances are made as per section 17(1) of the Farm Income Protection Act.

Council of Yukon First Nations—Elders

Loans were issued to the Council of Yukon First Nations to provide interim benefits to Yukon Elders pending the settlement of a future comprehensive land claim agreement. These loans were issued along with loans for comprehensive claim negotiations. The department is no longer issuing these loans. The loan is non-interest bearing and is repayable upon settlement of the claim.

Indigenous claimants

The department issues loans to Indigenous groups to support their participation in Specific claims negotiations. These loans are payable upon the settlement of the claim. All loans are non-interest bearing and each loan is repayable upon settlement of the claim.

Inuit Loan Fund

Loans were made to individual Inuit or groups of Inuit to promote commercial activities and gainful occupations.

The total amount authorized to be outstanding at any time is $6,633,697, as last amended by the Department of Crown-Indigenous Relations and Northern Affairs Vote 37b, Appropriation Act No. 4, 1995–96.

The department is no longer issuing these loans. Only one loan bearing interest at the rate of 5.5% per annum is still owed to the Crown.

Canada Apprentice Loans

Canada Apprentice Loans are administrated under the authority of Section 4 of the Apprentice Loans Act which came into effect on January 2, 2015. The Minister of Employment, Workforce Development and Official Languages is authorized to enter into a loan agreement directly with any eligible apprentice. Since April 1, 2021, the government waived interest charges on Canada Apprentice Loans for two years, which helped ease the burden that many faced after graduating into an incredibly challenging job market during the pandemic. In addition, as announced in the 2022 Fall Economic Statement Bill C-32, and in Budget 2023, the Government of Canada will eliminate interest on Canada Apprentice Loans, beginning on April 1, 2023, which will offer important relief for all current and future new graduates coping with the high cost of living. Apprentices are not required to make payments on their loans while they are still in their apprenticeship program and during the 6-month period following completion. The typical repayment period is 10 years, but the maximum period is 15 years. Borrowers having difficulty repaying their loans may be eligible for assistance under the Repayment Assistance Plan.

The total amount of apprentice loans issued under the authority of the Apprentice Loans Act may not exceed $1.5 billion. The total amount of outstanding apprentice loans as at March 31, 2023, amounts to $290,594,663 ($283,806,680 as at March 31, 2022). During the year, loans and interest receivable on these loans totaling $735 ($293 as at March 31, 2022) were written off by the Department of Employment and Social Development Vote 10c from the Appropriation Act No. 5, 2022-23 and $327,035 ($367,072 as at March 31, 2022) were forgiven as per the Apprentice Loans Act.

Canada Student Financial Assistance Program

Since August 1, 2000, Canada Student Loans are issued under the Direct Loan Regime. Before this date, the loans were issued under the Guaranteed Loan Regime (1964–1995) or under the Risk-Shared Loan Regime (1995–2000). Under these three different regimes, no security is received from the students. Since April 1, 2021, the government waived interest charges on Canada Student Loans for two years, which helped ease the burden that many faced after graduating into an incredibly challenging job market during the pandemic. In addition, as announced in the 2022 Fall Economic Statement Bill C-32, and in Budget 2023, the Government of Canada will eliminate interest on Canada Student Loans, beginning on April 1, 2023, which will offer important relief for all current and future new graduates coping with the high cost of living. Students are not required to make payments on their loans while they are still studying and during the 6-month period following the completion of their studies. The typical repayment period is 10 years, but the maximum period is 15 years. Borrowers having difficulty repaying their loans may be eligible for assistance under the Repayment Assistance Plan. 

The total amount of direct loans issued under the authority of the Canada Student Financial Assistance Act and outstanding risk-shared loans bought-back by the Department of Employment and Social Development may not exceed 34 billion dollars.

During the year, loans and interest receivable on these loans totaling $220,562,731 ($168,772,206 as at March 31, 2022) were written off by the Department of Employment and Social Development Vote 10c from the Appropriation Act No. 5, 2022-23 and $18,093,671 ($9,806,034 as at March 31, 2022) were written off pursuant to Section 25(1) of the Financial Administration Act. In addition, loans and interest receivable on these loans totalling $195,405,002 ($207,740,608 as at March 31, 2022) were forgiven as per the Canada Student Financial Assistance Act and $541,012 ($562,219 as at March 31, 2022) were forgiven as per the Canada Student Loans Act.

Direct loans to students

Loans issued on or after August 1, 2000, are administered under the authority of Section 6.1 of the Canada Student Financial Assistance Act, which authorizes the Minister of Employment, Workforce Development and Official Languages to enter into loan agreements directly with any qualifying student. Agreements are subject to the terms and conditions approved by the Governor in Council, on the recommendation of the Minister of Employment, Workforce Development and Official Languages with the concurrence of the Minister of Finance. The total amount of outstanding direct loans as at March 31, 2023, amounts to $23,966,442,986 ($23,611,356,256 as at March 31, 2022).

Risk-shared student loans

Loans issued prior to August 1, 2000, and on or after August 1, 1995, are amounts related to student loans subrogated to the Crown under the authority of the Canada Student Financial Assistance Act. The total amount of loans outstanding as at March 31, 2023, amounts to $13,018,050 ($10,217,420 as at March 31, 2022) for loans owned by the Department of Employment and Social Development and $12,813,513 ($727,327,280 as at March 31, 2022) for loans under the current ownership of the financial institutions. Starting in fiscal year 2021, the Department of Employment and Social Development proceeded with the buy-back of Risk-shared loans owned by financial institutions, which increased the total value of loans with the department and therefore decreasing the value of loans under the ownership of the financial institutions.

Guaranteed student loans

Loans issued prior to August 1, 1995, are amounts related to student loans subrogated to the Crown under the authority of the Canada Student Loans Act. The total amount of loans outstanding as at March 31, 2023, amounts to $40,560,133 ($43,389,389 as at March 31, 2022) for loans owned by the Department of Employment and Social Development and $49,474 ($116,731 as at March 31, 2022) for loans under the current ownership of the financial institutions. Starting in fiscal year 2021, the Department of Employment and Social Development proceeded with the buy-back of Guaranteed loans owned by financial institutions, which considerably decreased the value of loans under the ownership of the financial institutions.

Provincial workers' compensation boards

This account was established under the authority of subsection 4(6)(b) and (e) of the Government Employees Compensation Act, to provide funds to enable provincial workers' compensation boards to administer claims on behalf of the Crown, and provide compensation benefits to federal government employees injured or ill in the course of their employment.

The total amount of advances that is authorized to be made for each provincial workers' compensation board is not to exceed three months' disbursements for compensation.

Canadian Commercial Bank

Advances have been made to the Canadian Commercial Bank representing the government's participation in the support group as authorized by the Canadian Commercial Bank Financial Assistance Act. These funds represent the government's participation in the loan portfolio that was acquired from the Bank and the purchase of outstanding debentures from existing holders.

Financial assistance—National governments

Pursuant to Section 8.3 of the Bretton Woods and Related Agreements Act, the Minister of Finance, by order of the Governor in Council, is authorized to extend certain forms of financial assistance to a foreign state. The provision of such financial assistance is contingent upon that state having an arrangement with the International Monetary Fund and upon the satisfactory participation of other countries with Canada in the provision of financial assistance.

Funding for such transactions is provided by the Minister of Finance out of the Consolidated Revenue Fund. The maximum amount of financial assistance that can be provided under legislation is $7 billion CAD in respect of any particular foreign state and $14 billion CAD in respect of all foreign states.

In 2023, the government provided $4,850 million CAD in financial assistance in the form of interest-bearing loans to Ukraine. 

These loans were provided on either Commercial Interest Reference Rates (CIRR) or concessional rates and have repayment terms ranging from 5 to 10 years.

Financial Consumer Agency of Canada—Advances

Interest-bearing advances have been made to defray the cost of operation of the Agency pursuant to Section 13(1) of the Financial Consumer Agency of Canada Act.

Federal-provincial fiscal arrangements

These amounts represent net overpayments in respect of transfer payments to provinces under the Constitution Acts 1867 to 1982, the Federal-Provincial Fiscal Arrangements Act, and other statutory authorities.

The overpayments are non-interest bearing and will be repaid by reducing transfer payments in subsequent years.

International and other organizations

Global Environment Facility

This account records the funding of a facility for environmental funding in developing countries in the areas of ozone, climate change biodiversity and international waters as authorized by the Bretton Woods and Related Agreements Act, and various appropriation acts. Advances to the Global Environment Facility are made in non-negotiable, non-interest bearing demand notes that are later encashed.

As at March 31, 2023, advances to the Global Environment Facility amounted to $10,000,000 CAD.

International Development Association

This account records the loan to the International Development Association, for an amount of $575,420,000 USD (287,710,000 USD as of March 31 2022) for the Concessional Partner Loan.

The authority to make the loan is pursuant to the Bretton Woods and Related Agreements Act. The loan bears interest at the rate of 1.2% per annum with a term of 25 years and a 10 year grace period. The first installment is due July 15, 2027 and the last installment January 15, 2047.

International Finance Corporation—Catalyst Fund

This account records Canada's financial support of the International Finance Corporation's—Catalyst Fund as authorized by the Bretton Woods and Related Agreements Act, and various appropriation acts (including Finance Vote L12b, Appropriation Act No. 4, 2010–2011 and Vote L17c, Appropriation Act No. 5, 2012–2013). The Catalyst Fund supports private sector engagement in climate change mitigation and adaptation activities through the provision of concessional and commercial financing arrangements.

As at March 31, 2023, advances to the Catalyst Fund amounted to $75,000,000 CAD.

International Monetary Fund—Poverty Reduction and Growth Trust

This account records the loan to the International Monetary Fund's Poverty Reduction and Growth Trust in order to provide assistance to qualifying low-income countries as authorized by the Bretton Woods and Related Agreements Act, and various appropriation acts.

The total revolving loan authority pursuant to the Bretton Woods and Related Agreements Act, was set at 3.5 billion special drawing rights (SDR) or such greater amount as may be fixed by the Governor in Council.

As of March 31, 2023, SDR 710,005,000 of Canada's SDR 1,200,000,000 revolving loan commitment to the Poverty Reduction and Growth Trust was outstanding.

This outstanding balance was translated into Canadian dollars at the year-end closing rate of exchange (1 SDR/$1.8181 CAD). During the year, transactions included issuances, repayments and an exchange valuation adjustment.

The following table presents the balances and transactions for the loans, including revaluations for foreign currency fluctuations.

Municipal Development and Loan Board

Loans have been made to provinces and municipalities, to augment or accelerate municipal capital works programs.

The loans bear interest at rates from 5.25% to 5.375% per annum, and are repayable in annual or semi-annual instalments over 15 to 50 years.

Winter Capital Projects Fund

Loans have been made to provinces, provincial agencies and municipalities, to assist in the creation of employment.

The loans bear interest at rates from 7.4% to 9.5% per annum, and are repayable either in annual instalments over 5 to 20 years, or at maturity.

International development assistance—Developing countries

Interest-free or low-interest bearing loans have been made through the Canadian International Development Agency, now amalgamated with the Department of Foreign Affairs, Trade and Development (DFATD), to developing countries for international development assistance. Loans are recorded in part as expenses when the economic value of the loans is reduced due to their concessionary terms.

All loans have been made in Canadian dollars and are not subject to revaluations for foreign exchange fluctuations.

Similar assistance has been provided to developing countries by way of subscriptions and advances to the International Development Association, advances to the Global Environment Facility, and loans to other international financial institutions. These are reported later in this section under the heading "International organizations".

In 2006–2007, the Government of Canada, as represented by the Canadian International Development Agency (now amalgamated with DFATD), entered into an agreement with the Government of Pakistan to forgive its outstanding $447,507,535 loan pursuant to Foreign Affairs and International Trade Vote 32c, Appropriation Act No. 5, 2009–2010. In order to expire its debt obligation, the Government of Pakistan will be required to make education sector investments that are equivalent to the present value of its debt. According to the agreement, Pakistan's debt is to be written down proportionally as the investments are made. Since 2010, the Government of Pakistan's debt been reduced by the total amount of $427,345,514.

The following table presents the balances and transactions for the loans made to developing countries, together with their terms and conditions of repayments.

International Finance Corporation

Financial Mechanisms for Climate Change Facility

This account records Canada's financial support of the International Finance Corporation's—Financial Mechanisms for Climate Change Facility (FMCC) as authorized by the Bretton Woods and Related Agreements Act, and various appropriation acts. The FMCC supports private sector engagement in climate change mitigation and adaptation activities through the provision of concessional and commercial financing arrangements.

As at March 31, 2023, loan to the FMCC amounted to $43,239,972 CAD.

Global Agriculture and Food Security Program

This account records Canada's financial assistance to the International Finance Corporation for participation in the G8 Food Security Initiative (FSI) as authorized by the Bretton Woods and Related Agreements Act, and various appropriation acts.

As at March 31, 2023, loan to the Global Agriculture Food and Security Program amounted to $17,994,681 CAD.

The following table presents the balances and transactions for the loans, including revaluations for foreign currency fluctuations.

International financial institutions

This account records loans and advances for assistance to international financial institutions, as authorized by the International Development (Financial Institutions) Assistance Act, and various appropriation acts (including the Department of Foreign Affairs, Trade and Development Votes 20b and L25b).

Loans and advances are made using direct payments. During the year, transactions included loans and advances made through direct payments and revaluations for foreign currency fluctuations.

International organizations and associations

These items represent the value of payments established in 2006 made by the Canadian government to working capital funds maintained by international organizations of which Canada is a member. Participation in the financing of these working capital funds, on the basis of the scale of assessments, is prescribed by financial regulations for membership in the organizations. Payments into the funds are not subject to interest or repayment schedules, but are recorded by the organizations as credits from member states. Payments made by Canada were authorized by appropriation acts.

Canada Account

Export Development Canada (EDC) was created in 1944 as Canada's export credit agency (ECA). On October 1, 1969, EDC was established as a Crown corporation by a statute of the Parliament of Canada, the Export Development Act (the "Act"). EDC's mandate is to support and develop, directly or indirectly, Canada's export trade, and Canadian capacity to engage in that trade and respond to international business opportunities, as well as to provide development financing and other forms of development support in a manner consistent with Canada's international development priorities. EDC is named in Part I of Schedule III to the Financial Administration Act (the "FA Act") and is accountable for its affairs to Parliament through the Minister of Small Business, Export Promotion and International Trade.

Pursuant to Section 23 of the Act, the Minister of International Trade, Export Promotion, Small Business and Economic Development ("the Minister"), with the concurrence of the Minister of Finance, may authorize EDC to enter into certain transactions or class of transactions where the Minister is of the opinion it is in the national interest and where EDC has advised the Minister that it will not enter into such transactions without such authorization. Funding for such transactions is provided by the Minister of Finance out of the Consolidated Revenue Fund and the transactions are administered by EDC on behalf of the Government of Canada. Collectively these transactions are known as the Canada Account. Prior to March 25, 2020, Section 24(1) of the Act allowed Canada Account to have up to an aggregate of $20 billion (the "Statutory Limit") in contingent liabilities (i.e.: insurance policies, guarantees and other contingent arrangements), outstanding commitments to borrowers and outstanding principal amounts owed by borrowers. In response to the COVID-19, on March 25, 2020, the Act was amended to provide that the Statutory Limit is an amount notified by the Minister of Finance. On September 30, 2020, the Statutory Limit was increased to $115 billion.

In March 2020, EDC was issued a directive (PC 2020-206) pursuant to Section 89 of the FA Act to perform any activity consistent with any authorization obtained from the Minister pursuant to Section 23 of the Act as part of the response to the COVID-19 pandemic; to support and develop domestic business in accordance with paragraph 10(1)(a) of the Act as part of that response; and to take any ancillary or other measures that may be advisable or necessary to give effect to the directive. EDC received such authorizations and amendments thereto in respect of the Canada Emergency Business Account (CEBA) and implemented transactions there under pursuant to authorizations dated April 5, April 8, April 13, April 16, May 12 and October 20, 2020. The CEBA program was discontinued as of December 31, 2021; therefore, no new transactions were created after that date.

Canada Emergency Business Account

A Ministerial Authorization was signed authorizing up to $25 billion in Canada Account funds to provide emergency liquidity to Canadian business through the Canada Emergency Business Account (CEBA), and subsequent Ministerial Authorizations increased that limit to ultimately $73 billion. Under CEBA in its initial form, loans of up to $40 thousand were made available to qualifying businesses at 0% interest and were repayable by December 31, 2022, subject to a one-time extension of three years and 5% interest per annum commencing on January 1, 2023. Up to 25% of the loan may be forgiven only if the borrower repaid their obligation by December 31, 2022. On December 4, 2020, new eligible applicants were able to receive up to a $60 thousand CEBA loan. CEBA applicants who had received the $40 thousand CEBA loan were permitted to apply for the CEBA expansion, which provided eligible businesses with an additional $20 thousand CEBA loan. In both cases, these loans were at 0% interest, repayable by December 31, 2022 and subject to a one-time extension of three years and 5% interest per annum. Up to 33% of a $60 thousand loan, or 50% of the additional $20 thousand loan, may be forgiven if the borrower repaid their obligation by December 31, 2022. During the previous fiscal year, the Government of Canada announced that the December 31, 2022 forgiveness repayment date would be extended to December 31, 2023 for eligible CEBA loan holders in good standing; therefore, any loans outstanding at December 31, 2023 will be subject to a one-time extension of two years and 5% interest per annum commencing on January 1, 2024.

Development of export trade—National governments

Loan transactions with longer repayment terms or low or zero interest are recorded in part as expenses when the economic value is reduced due to such concessionary terms.

Table 11.4 and Table 11.6 of Section 11 of this volume present additional information on contractual obligations and guarantees that are disclosed in the notes to the audited consolidated financial statements of Section 2 of this volume.

Support and development of trade

EDC's mandate is to support and develop, directly or indirectly, Canada's export trade, and Canadian capacity to engage in that trade and respond to international business opportunities.

Loan transactions with longer repayment terms or low or zero interest rates are recorded in part as expenses when the economic value is reduced due to such concessionary terms.

Table 11.4 and Table 11.6 in Section 11 of this volume present additional information on contractual obligations and guarantees that are disclosed in the notes to the audited consolidated financial statements in Section 2 of this volume.

Immigration loans

In accordance with the Immigration and Refugee Protection Act, Immigration, Refugees and Citizenship Canada can issue immigration loans up to a maximum of $250,000,000. The Immigration Loans Program provides eligible immigrants, who are mainly refugees selected for resettlement to Canada, with access to funding that would otherwise not be available to them. Loans are used to cover a number of expenses, including travel to Canada and other costs associated with resettlement, specifically:

• defraying the cost of transportation to Canada;
• assisting with the establishment in Canada;
• defraying the cost of the right of permanent residence fees.

Starting February 28, 1995, all immigration loans bore interest at a rate determined by the Minister of Finance at the beginning of each calendar year. Regulations provided for a period of up to six years for the repayment of the loans and the interest rate on outstanding interest-bearing loans varied from 0.76% to 9.06%. Since February 21, 2018, loans are non-interest bearing and are repayable over one to eight years with a possible deferment of two years.

Indian Economic Development Guarantee Loans Program

The Indian Economic Development Guarantee Loans Program, established under Vote L53b, Appropriation Act No. 1, 1970, amended under P.C. 1977-3608, authorized the Department to guarantee loans for non-incorporated Indian businesses on a risk-sharing basis with commercial lenders because security restrictions in the Indian Act prevent the mortgage and seizure of property located on reserves. Guarantees are provided for various types of borrowers whose activities contribute to the economic development of Indians and enable them to develop long-term credit relationships with mainstream financial institutions. The guarantee level is not to exceed at any time $60,000,000, less the total amount of payments made to implement previous guarantees under that authority.

If a loan made under the Minister's guarantee goes into default, the lender has recourse to the Minister for reimbursement. In 1987, a reserve for losses of $2 million per annum was established within the department's reference levels to cover all Guarantee Loan Programs administered by the department. Simple interest, usually based on a percentage plus the prime rate, will accrue on the debt after payout. All payments, including accrued interest, remain as a debt of the client until recovered in full.

Reserve Housing Guarantee Loans Program

This program authorizes the Department to guarantee loans to individuals and Indian bands to assist in the purchase of housing on reserves because security restrictions in the Indian Act prevent the mortgage and seizure of property located on reserves. These loan guarantees enable status Indians residing on reserves, Band councils, or their delegated authorities, to secure housing loans without giving the lending institution rights to the property.

The total guarantee loans amount authorized by the Department cannot exceed $2.2 billion.

If a loan made under the Minister's guarantee goes into default, the lender has recourse to request the defaulted loan balance be reimbursed by ISC. In 1987, a reserve for losses of $2 million per annum was established within the department's reference levels to cover all Guarantee Loan Programs administered by the department. Such payments remain a debt of the First Nation to the Crown and interest is accrued and capitalized on these debts at the contract interest rate applicable at the time the loan was assigned to the Minister. Recovery of the debt is made to the extent possible, from the security used as collateral, such as land claim funds, or through repayment agreements.

Other business loans

This account records money owed to the government by borrowers upon default of loans that are subject to statutory authorities, pursuant to the Canada Small Business Financing Act. This authority provide for the payment of claims or the sharing of loan losses between lenders and the government.

Advances for the Working Capital Fund of entrepreneurs' assistance centers

Advances have been made to support the Working Capital Fund of entrepreneurs' assistance centers providing services to start-up companies, future entrepreneurs and small and medium-sized enterprises.

H.L. Holmes Fund

This account was established pursuant to paragraph 5(1)(f) of the National Research Council Act to record the residue of the estate of H.L. Holmes. Up to two thirds of the yearly net income from the fund shall be used to finance the H.L. Holmes Award on an annual basis. These awards will provide the opportunity to post-doctoral students to study at world famous graduate schools or research institutes under outstanding research persons.

Damage claims recoverable—North Atlantic Treaty Organization

Article VIII of the NATO Status of Forces Agreement signed April 4, 1949, as amended, deals with claims for damages to third parties arising from accidents in which a member of a visiting force is involved. This account is charged with the amount recoverable from other states, for claims for damages which took place in Canada, and is credited with recoveries.

The advances are non-interest bearing and have no specific repayment terms.

Cape Breton Operations—Medical and Workers' Compensation Board Reserves

This account is established to record separate financial reserves, which are maintained to support medical and workers' compensation claim payments to former employees of Enterprise Cape Breton Corporation.

Responsibility for these obligations was transferred to the Department of Public Works and Government Services (PWGSC) in 2015 pursuant to the Economic Action Plan 2014 Act where PWGSC was named responsible for assuming the human resources obligations following the dissolution of Enterprise Cape Breton Corporation.

The reserves are on deposit with the insurance providers and the Workers' Compensation Board of Nova Scotia. The insurance and workers' compensation plans are self-insured by the Crown. Adjustments to the reserve accounts are based on the difference between actual claim costs and a predetermined amount that is paid to the providers during the year. The remaining balance in the financial reserves will be returned to the Department upon completion of the programs.

Seized Property Working Capital Account

This account was established by Section 12 of the Seized Property Management Act. Expenses incurred, and advances made, to maintain and manage any seized or restrained property and other properties subject to a management order or forfeited to His Majesty, are charged to this account. This account is credited when expenses and advances to third parties are repaid or recovered and when revenues from these properties or proceeds of their disposal are received and credited with seized cash upon forfeiture.

The total amount authorized to be outstanding at any time is $50,000,000.

Any shortfall between the proceeds from the disposition of any property forfeited to His Majesty and the amounts that were charged to this account and that are still outstanding, is charged to a Seized Property Proceeds Account and credited to this account.

Greater Victoria Harbour Authority

The Victoria Harbour loan receivable relates to the sale of a parcel of Victoria Harbour land.

The loan bears interest at the rate of 4.9% per annum, repayable over an initially planned period of 15 years. An extension of 3 years was granted in 2021, with a final instalment planned in 2024.

St. Lawrence Seaway Management Corporation

This account was established by subsection 80(1) of the Canada Marine Act. Loans previously managed by the St. Lawrence Seaway Authority are now managed by the St. Lawrence Seaway Management Corporation in accordance with an agreement between the Department of Transport and the Corporation. The repayments of these loans are recorded in this account.

The loan bore interest at a rate of prime plus 2.0% per annum. The final installment of the existing terms was anticipated for March 2013.

Legal procedures are currently underway to obtain reimbursement.

Federal Public Service Health Care Administration Authority

The Federal Public Service Health Care Plan Administration Authority (referred to as the Administration Authority) was incorporated, without share capital, under subsection 7.2(1) of the Financial Administration Act effective May 1, 2007. Effective May 31, 2007, the assets and liabilities of the Public Service Health Care Plan (PSHCP) were transferred to the Government of Canada, and to the Administration Authority, as directed by the President of the Treasury Board of Canada and consistent with the Trust Agreement, which terminated May 31, 2007.

The Administration Authority is charged with the administration of the PSHCP. Its objective is to ensure that benefits and services to plan members and their covered dependants, as defined in the PSHCP documentation, are delivered in a manner that ensures the effective and efficient administration of the PSHCP. Payments are made to the Administration Authority under Vote 20 and are authorized under the terms of reference of the funding agreement between the President of the Treasury Board and the Administration Authority. The funding agreement allows for the transfer of funds from the Treasury Board of Canada Secretariat to the Administration Authority in four quarterly instalments upon approval of the operating budget by the Secretary of the Treasury Board of Canada. These quarterly instalments are made in advance and actual expenses are recorded upon approval of the Administration Authority's Quarterly Financial Report.

Joint Learning Program

Advances have been made to the Public Service Alliance of Canada (PSAC) for the Joint Learning Program (JLP). Following the collective bargaining rounds of 2004, 2008, 2010, 2014 and subsequently of 2018, a Memorandum of Understanding between the Treasury Board and PSAC was included in the collective bargaining agreements to provide funding for a JLP. The JLP is a negotiated partnership between PSAC and the Treasury Board of Canada Secretariat (TBS).The objective of the JLP is to improve labour relations in the Public Service. It is intended to provide joint union-management learning opportunities in areas where both parties have roles and responsibilities.

Payments are made to PSAC under Vote 20 and are authorized under the terms of reference of the Program. The terms of reference include the program costs, funding conditions, payment conditions, timelines, as well as a schedule of payments. The schedule of payments provides for a 3-month advance from TBS to PSAC to provide for program delivery costs. When actual expenses are reported every three months, the advance is reversed and the expense is recorded.

Commonwealth War Graves Commission

Advances have been made to the Working Capital Fund of the Commonwealth War Graves Commission, to maintain graves and cemeteries.

At year end, the balance of the advances was 30,000 British pound sterling. This balance was converted to Canadian dollars, using the year-end rate of exchange. The advances are non-interest bearing and have no fixed terms of repayments.

Miscellaneous loans, investments and advances

This account represents amounts outstanding in the hands of agencies and individuals, at year end. This group records loans, investments and advances not classified elsewhere.

Transition payments—Pay in arrears

During the 2015 fiscal year, a one-time payment was issued to employees as a result of the implementation of pay in arrears. This amount will be recovered from the employees upon their departure from the Public Service. The amount at year-end represents the balance to be recovered in the future.

Consolidation adjustment

The consolidation adjustment reflects the total loans and advances held by consolidated Crown corporations and other entities. These mainly include loans receivable.

Canada Enterprise Emergency Funding Corporation ("CEEFC") was incorporated on May 11, 2020 and is wholly owned by Canada Development Investment Corporation ("CDEV"), an enterprise Crown corporation. CEEFC is a non-agent Crown corporation and is not subject to the Income Tax Act of Canada.

As part of Canada's COVID-19 Economic Response Plan, CEEFC has been mandated to implement the Large Employer Emergency Financing Facility ("LEEFF") along with Innovation, Science and Economic Development Canada ("ISED") and the Department of Finance. The LEEFF program is intended to provide bridge financing to Canada's largest employers, whose needs during the COVID-19 pandemic are not being met through conventional financing. LEEFF will not be used to resolve insolvencies or restructure firms, nor will it provide financing to companies that otherwise have the capacity to manage through the crisis. Instead, the additional liquidity made available through LEEFF provides emergency funding support for large Canadian enterprises facing financial challenges due to the economic impact of the COVID-19 pandemic, allowing these businesses and their suppliers to remain active during this difficult time and positioning them for a rapid economic recovery.

Allowance for valuation

In accordance with the comprehensive policy on valuation, assets are subject to an annual valuation to reflect reductions from the recorded value to the estimated net recoverable value.

The allowance for valuation, for loans, investments and advances, represents the estimated losses on the realization of the loans, investments and advances included in the accounts of Canada at year end. In 2018, the provisioning methodology used in the government's allowance calculation was updated for its sovereign exposures. The most significant change is the introduction of obligor-specific loss given default rates that replace a general rate used for all obligors. This change is designed to provide more accurate credit loss estimates for sovereign loan exposures.

Public Accounts of Canada 2023 Volume I—Bottom of the page Navigation

• Previous page: Capital Subscriptions—International organizations
• Section 9: Table of contents: Section 9: Loans, investments and advances as at March 31
• Next page: Allowance for valuation