BDC Fact #7

When parsing the loan book of The Business Development Bank of Canada, there are some interesting statistics regarding the geographic distribution of their loan clients across Canada. Some provinces attract substantially more capital than others when analyzed on a $/population basis:

Punching above their weight:

Newfoundland & Labrador
1.54% of the population, but 4% of BDC’s loans outstanding
$224 million more in capital than if loans were advanced on a per head basis
3 BDC offices in that province

New Brunswick
2.27% of the population, but 4% of BDC’s loans
$154 million more in capital
5 BDC offices

Quebec
23.35% of the population, but 38.1% of BDC’s loans
$1.347 billion more in capital
23 BDC offices

Punching below their weight:

Ontario
38.83% of the population but 31.7% of BDC’s loans
$650 million capital deficit
29 BDC offices

Manitoba
3.6% of the population but 2.3% of BDC’s loans
$116 million capital deficit
3 BDC offices

Saskatchewan
3% of the population but 1.5% of BDC’s loans
$139 million capital deficit
2 BDC offices

Alberta
10.5% of the population but 6.5% of BDC’s loans
$369 million capital deficit
9 BDC offices

British Columbia
13.3% of the population but 8.2% of BDC’s loans
$462 million capital deficit
14 BDC offices

In some ways, these loan figures make intuitive sense if you were to overlay the flows of transfer payments between Canadian Provinces; at least in the case of Ontario, Alberta and B.C. The sheer quantum of capital outstanding in Quebec may well be explained in part by the location of BDC’s headquarters and the sheer number of satellite branches flying the Canadian flag in that province; and then there’s the possibility that this Crown Corp. has a longstanding, if not subtle, role to play on the national unity file.

There is, naturally, also the simple issue of “feet on the street”. Saskatchewan has but two BDC offices in that province, but New Brunswick has five, for example. That might also explain why, despite similar population figures, N.B. had $362MM of loans outstanding as compared to Saskatchewan’s $137MM.

Numbers to noodle on.

MRM