National governments including developing countries

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Loans to national governments consist mainly of loans for financial assistance, international development assistance to developing countries, and loans for development of export trade (administered by Export Development Canada).

Table 9.11 presents a summary of the balances and transactions for the loans and advances that were made to national governments including developing countries.

Table 9.11
National governments including developing countries
(in dollars)

  April 1, 2016 Payments and other charges Receipts and other credits March 31, 2017
Finance
Department of Finance
Financial assistance—Ukraine 400,000,000 400,000,000
Global Affairs
Department of Foreign Affairs, Trade and Development
International development assistance—Developing countries 155,273,933 29,845,911 125,428,022
Export Development Canada
Development of export trade—National governments 410,737,642 139,906,855 61,336,240 489,308,257
Subtotal 566,011,575 139,906,855 91,182,151 614,736,279
National Defence
Department of National Defence
Damage claims recoverable—North Atlantic Treaty Organization 53,163 53,163
Total 966,011,575 139,960,018 91,235,314 1,014,736,279

Financial assistance—Ukraine

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 $2.5 billion USD in respect of any particular foreign state and $5 billion USD in respect of all foreign states.

As at March 31, 2017, the outstanding loan balance to the Ukraine was $400 million. There were no other balances or transactions in respect of Ukraine or other foreign states during the year.

These loans bear interest at rates ranging between 1.4 per cent and 2.1 per cent and have repayment term of 5 years.

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. No new loans have been issued since April 1, 1986.

All loans have been made in Canadian dollars and are therefore 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 $447,507,534 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 2009–2010, the Government of Pakistan's debt has been reduced by the total amount of $364,839,372.

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

(in dollars)

  April 1, 2016 Payments and other charges Receipts and other creditsLink to footnote 1 March 31, 2017
(a) 30 year term, 7 year grace period, 3.0 per cent interest per annum, with final repayment in March 2005:
Cuba 9,547,012 9,547,012
(b) 35 year term, 4 year grace period, 5.0 per cent interest per annum, semi-annual interest repayments with first principal repayment due January 2017 and final repayment in July 2026:
Egypt 44,995,933 1,761,590 43,234,343
(c) 50 year term, 10 year grace period, non-interest bearing, with final repayments between March 2015 and September 2035:
Algeria 3,170,311 427,722 2,742,589
Argentina 28,000 18,667 9,333
Bolivia 254,370 42,395 211,975
Colombia 65,770 26,308 39,462
Dominican Republic 1,853,482 236,045 1,617,437
Ecuador 1,755,831 304,919 1,450,912
Guatemala 1,081,250 100,000 981,250
Indonesia 104,893,914 10,310,317 94,583,597
Malaysia 979,273 62,935 916,338
Malta 199,980 25,000 174,980
Mexico 4,157 2,771 1,386
Morocco 3,224,171 384,920 2,839,251
Pakistan 122,614,467 39,946,304 82,668,163
Paraguay 19,996 19,996
Peru 9,321 3,728 5,593
Philippines 820,414 97,160 723,254
Sri Lanka 49,577,678 4,263,030 45,314,648
Thailand 9,043,781 674,622 8,369,159
Tunisia 25,514,240 3,295,729 22,218,511
Subtotal 325,110,406 60,242,568 264,867,838
(d) 50 year term, 13 year grace period, non-interest bearing, with final repayment in March 2023:
Algeria 8,715,639 1,245,091 7,470,548
Subtotal 388,368,990 72,796,261 315,572,729
Less: portion expensed due to concessionary terms 233,095,057 42,950,350 190,144,707
Total 155,273,933 29,845,911 125,428,022

Development of export trade—National governments

Pursuant to Section 23 of the Export Development Act, the Minister for International Trade, with the concurrence of the Minister of Finance, may authorize Export Development Canada (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.

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 11.5 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.

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

(in dollars)

  April 1, 2016 Payments and other charges Receipts and other credits March 31, 2017
Payments or other chargesLink to footnote 2 Revaluation Receipts or other creditsLink to footnote 3 Revaluation
Non-budgetary loansLink to footnote 4
(a) 1 to 5 year term, Canadian prime rate plus 0.35 per cent interest per annum, assumed from the Canadian Wheat Board (CWB), with final repayments in June 2016:
Egypt 6,670,342 6,670,342
(b) 1 to 5 year term, 3.0 per cent to 9.0 per cent interest per annum, with final repayments in May 2019:
Argentina 16,187,940 119,188,037 1,331,745 25,456,851 111,250,871
(c) 11 to 15 year term, based on 6 month London Interbank Offered Rate (LIBOR), plus 0.50 per cent interest per annum, assumed from CWB with final repayments in January 2028:
Iraq 133,101,828 3,065,260 11,225,908 124,941,180
(d) 11 to 15 year term, interest based on LIBOR, plus a range of rates from 0.5 per cent to 1.0 per cent per annum, with final repayments between December 2019 and June 2020:
Kenya 835,647 19,683 119,641 735,689
(e) 16 to 20 year term, interest based on LIBOR, plus a range of rates from 0.5 per cent to 0.63 per cent per annum, with final repayments between October 2018 and June 2021:
Indonesia 437,784 9,225 63,857 383,152
Venezuela 10,600,231 18,913 6,284,262 4,334,882
Subtotal 11,038,015 28,138 6,348,119 4,718,034
(f) 21 to 25 year term, 9.0 per cent to 10.0 per cent interest per annum, with final repayments in September 2000:
Sudan 5,015,589 120,495 5,136,084
(g) 21 to 25 year term, interest based on LIBOR, plus 0.55 per cent per annum, with final repayments in November 2024:
Pakistan 6,459,333 146,549 431,126 6,174,756
(h) 21 to 25 year term, based on 6 month LIBOR, plus 0.55 per cent interest per annum, assumed from CWB, with final repayments in November 2024:
Pakistan 16,330,064 372,332 998,223 15,704,173
Total—Non-budgetary loans 195,638,758 119,188,037 5,084,202 51,250,210 268,660,787
Budgetary loansLink to footnote 4
(a) 26 to 30 year term, 3.0 per cent interest per annum, with final repayments between December 2016 and April 2018:
Algeria 1,006,000 568,000 389,071 48,929
(b) 31 to 55 year term, 0 per cent to 10.29 per cent interest per annum, with final repayments between September 2029 and February 2045:
China 428,925,172 10,127,058 22,976,719 416,075,511
Egypt 7,577,974 59,774 350,262 7,287,486
Gabon 7,894,461 184,025 159,350 7,919,136
India 45,909,263 1,075,513 1,678,376 45,306,400
Jamaica 5,346,776 126,081 240,974 5,231,883
Morocco 75,646,717 1,759,899 3,356,008 74,050,608
Turkey 93,870,096 2,209,587 3,581,817 92,497,866
Subtotal 665,170,459 15,541,937 32,343,506 648,368,890
(c) 31 to 55 year term, comprised of several loans with fixed or variable interest rates currently ranging from 0 per cent to 2.21 per cent per annum, with final repayments between December 2018 and December 2033:
Kenya 4,807,384 92,679 287,824 4,612,239
Total—Budgetary loans 670,983,843 15,634,616 33,199,330 389,071 653,030,058
Subtotal 866,622,601 119,188,037 20,718,818 84,449,540 389,071 921,690,845
Less: portion expensed due to concessionary terms 455,884,959 23,502,371 432,382,588
Total 410,737,642 119,188,037 20,718,818 60,947,169 389,071 489,308,257

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.

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