Canada plans to merge the Business Development Bank of Canada and Export Development Canada into one federal development bank. The proposal appeared in Thursday's federal budget document. The two Crown corporations together hold more than $120 billion in assets and employ about 5,000 people.
Transition details
The decision followed a review of federal financing Crown corporations. The government said existing products and services will continue throughout the transition. Lawmakers will need to amend the BDC Act and the Export Canada Act.
What BDC and EDC do
BDC serves smaller businesses and operates BDC Capital, Canada's most active venture capital investor. EDC acts as Canada's export credit agency and typically supports larger companies selling internationally. The two organizations have complementary lending and financing roles.
Market response
Some investors said the combined institution should focus on market making and fund co-investments rather than direct investing. Others noted that a merger could mean one fewer limited partner for Canadian funds. Some founders said the current separation of roles was unclear.
A transition board will oversee the merger work. The government is already working with both organizations on the process. Both will continue under their existing mandates until the new structure is finalized.