The CBC (Canadian Broadcasting Corporation) broadcasts select NHL games on Hockey Night in Canada. These are “free” to watch on TV or stream online. “Free” is placed in quotations because the CBC’s advertises that their content services can be streamed for “free” by the public. It is worth noting that the CBC’s annual share of revenue for 2018 was roughly 1.2 billion. Hockey fans may attempt to recuperate their tax dollars by watching as much hockey as possible.
The aforementioned gives context, but it is not the CBC which is the main focus of this article, but a commercial advertisement which is played during CBC’s Hockey Night in Canada.
The advertisement is for Export Development Canada (which is also funded by tax dollars).
A quote from the EDC website:
Our Export Guarantee Program can help your bank provide you with additional access to financing. We share the risk with your bank by providing a guarantee on the money you borrow, encouraging them to increase your access to working capital.
The Future is Uncertain
When an entrepreneur identifies a market in which they believe a profitable enterprise can be undertaken, the entrepreneur will invest their available funds. If the entrepreneur possesses insufficient funds, then a bank may choose to act as lender and direct additional funds toward what they may also believe to be a profitable endeavour.
In this instance, it is both the entrepreneur and the bank who will bear the risk. If the risk is too high, then the bank may choose not to loan funds to the entrepreneur.
What happens when Export Development Canada steps in to “de-risk” the project? EDC is funded by taxpayers. This means that projects will be undertaken with someone else’s money (the tax payer). Neither the entrepreneur nor the bank will fully bear the risk involved. What if the venture turns sour? EDC explains, “we share the risk with your bank by providing a guarantee on the money you borrow.”
In the end, someone must bear the risk. So, who will it be?
If the entrepreneur utilizes his own funds, then he has a vested interest. This also would apply to a bank acting as lender. The claim that “risk doesn’t stop you,” identifies the EDC not as “ risk experts,” but as “experts” in promoting risky ventures, underwritten with tax dollars.
Here’s the advertisement which is aired during Hockey Night in Canada:
None of the entrepreneurs in this commercial appear to be concerned with risk. This should be a reason for concern on the part of the viewer. Such ads are misleading and promote a false of reality. The bearing of risk is unavoidable in any entrepreneurial endeavor. Future is uncertain. Resources are scarce.
Man shrugs his shoulders, “30,000 brake pads NO DEPOSIT. I said, why put the brakes on now?”
Indeed, why not? Why demand a deposit for surety? If the deal goes sour, someone else is left paying for your losses. It is easy to make risky decisions when the error of your way does not return upon your own head.
