The Canadian Cabinet has approved a $250 million loan from the so-called Canada Account for a past transaction involving 10 Bombardier CRJs to Cincinnati-based Comair. The move marked the first application of a new $1.2 billion credit facility established by the Canadian government specifically to fund regional jet sales. It also relieved Bombardier of its exposure to an interim private loan issued at the point of sale.
Typically, so-called corporate account activities funded by Export Development Canada (EDC) serve as the primary mode of financing support for foreign buyers or lessors of Canadian products. Because the EDC manages its own treasury and raises funds in private financial markets, the federal government assumes no risk for typical corporate transactions. Under the EDC-administered Canada Account, however, the government absorbs most of the risk, a point of particular sensitivity within international trade circles.
