Newly at the head of the Business Development Bank of Canada (BDC), Isabelle Hudon intends to strengthen the institution’s ESG efforts. However, this approach will not go so far as to exclude the oil and gas sector from its portfolio.
“Compared to other organizations that had to announce the divestment, we are not there at all,” she answers in an interview on the sidelines of a speech before the Council of International Relations of Montreal (CORIM). Rather, we ask ourselves the question how we equip our SMEs, how we intensify our presence in clean technologies. ”
The oil and gas sector represents only a “tiny” part of BDC’s interventions, adds its president and CEO. Only 1% of the portfolio is exposed to it. “It’s not as if we had a portfolio that was extremely invested in this sector. We recognize as a federal institution that we have a role to play in supporting these businesses in their transition. ”
She pointed out that BDC was very active in clean technologies. Over the past five years, it has invested $ 1.2 billion in Canada.
New directions
Arrived last August, Mr.me Hudon is working on the new strategic orientations of BDC that it intends to unveil in 2022. If it did not want to advance too far on the plan to come out of “respect for its board of directors”, the economic impact and social responsibility of the federal institution, diversity and support for digital transformation will likely be its cornerstones.
The increase in the number of customers (72,000 currently) is part of the discussions underway. “I did not start with the number of customers that must be served, she qualifies. If we do a quick calculation, to have more impact in the economy, we probably have to reach more companies and more entrepreneurs. ”
During an exchange on stage with Françoise Bertrand, Chair of the Board of VIA Rail Canada, Mr.me Hudon said the BDC needed to be more present with communities in the blind spot of large financial institutions, especially black communities and aboriginals.
“We have to develop these entrepreneurs so that financial institutions are interested in their businesses. This is where I think we need to have a leading role. ”
Rising interest rates
Like any financial institution, the BDC will have to adjust to a possible rise in interest rates. “We are adapting to rising interest rates,” replies Mme Hudon in an interview. We are like other financial institutions. When interest rates rise, we adjust too. We don’t have fixed rates. We must follow the same rules as other financial institutions. ”
The BDC team closely monitors changes in interest rates. Too sudden a rise would inevitably have an effect on the cost of capital that it lends to businesses. Such a scenario would slow down economic growth, she warns.
“In my opinion, there is only one way that rates can move, it can’t really go lower,” she explains. She will have to [la hausse] be minimal and above all that it does not happen all at once. ”
In a context of rising interest rates, the BDC could enter into more partnerships with financial institutions to insure some of the risk for small businesses. The institution did it during the pandemic and “it went very well”, notes the leader.
Ambassador of Canada to France before her appointment to BDC, Mme Hudon was making his speech a few hours before receiving the Legion of Honor of France, in the rank of Commander, at an official ceremony in Ottawa.