The federal government wrote off more than $4 billion worth of debt owed to Ottawa last year, including a line item found in the Public Accounts of Canada worth nearly $200 million — something that the responsible department is refusing to disclose.

Found in the pages of the Public Accounts of Canada for the 2018-19 fiscal year is a line item worth precisely $196,010,248 that was written off from Export Development Canada’s (EDC) Canada Account, which offers financing for higher-risk projects and sales that the international trade minister deems is in best interest of the country.

Debt is written off when a lender decides it has little or no chance of collecting the money owed, meaning the amount is what Ottawa has concluded is money it will not get back.

The Public Accounts released in late December do not contain an explanation for the write-off, or provide any information relating to who received the loan or which economic sector it involves.

A spokesperson for Global Affairs Canada refused to disclose to iPolitics what the item was, but said the decision to write-off the amount was made on recommendation that it was in the “best interests of Canada and Canadians.”

“Although write-offs are a last resort and are rare, on occasion Export Development Canada recommends that the Government of Canada forgive amounts owing under a Canada Account loan when in the best interests of Canada and Canadians,” said spokesperson Guillaume Bérubé.

“This action required the authorization of the Minister of International Trade and the concurrence of the Minister of Finance. These decisions were obtained in December 2018.”

Bérubé said the federal government is unable to speak to the specifics of this write-off due to “commercial confidentiality.” EDC had previously directed questions from iPolitics to Global Affairs and Finance Canada.

READ MORE: Risky business at Export Development Canada, Auditor General says

The Canada Account is used to support loan transactions that fall out of the scope of, or are too risky, for EDC’s primary corporate account, but are determined by the federal International Trade minister to be in Canada’s national interest. Jim Carr was the minister at the time the write-off was authorized.

Money in the Canada Account comes from the general revenue stream of the Canadian government, which also assumes the risk for any losses.

While the account is under EDC, the federal export credit agency receives direction regarding the fund’s management from Global Affairs and Finance Canada. EDC offers its financing, credit and risk expertise to the Canadian government on managing its transactions.

A list of all of the Canada Account’s transactions shows Ottawa has used the fund to provide financing and guarantees 29 different times since 2003, largely for the securing export deals for Canadian-made vehicles to foreign buyers.

Recently, money was provided for the construction of the Trans Mountain pipeline expansion project through the financing vehicle. Billions of dollars in bailout money during the last major recession was offered to Canada’s auto manufacturing sector via the account.

As well, five financing projects have helped support the sale of Quebec-based Bombardier planes to foreign airlines.

Aaron Wudrick, federal director of the Canadian Taxpayers Federation, said the government’s refusal to offer any more details on the why $196 million was written off is problematic.

“I’m not saying the government is ever unjustified in writing it off, but they have to say why, they have to give a reason why, or tell people what it’s for. That’s the troubling thing,” he said.

Wudrick said the government should be looked at as a lender of last resort, and when companies seek financing using taxpayer dollars, it should require a “higher level of transparency that you would with capital markets and commercial banks.”

“Surely the bare minimum is the public has to know what’s going on,” he said. “Otherwise, they can’t really form an opinion about whether it’s good or bad.”

The 2017-18 Public Accounts of Canada showed that Ottawa had quietly written off $2.6 billion for a loan and accrued interest that CBC News reported was from a bailout provided to Chrysler during the last major recession.

That write-off, one of the largest ever for a taxpayer-funded bailouts ever, came from a USD $1.125 loan to the automotive manufacturer provided by the previous Conservative government in 2009. That money was later used by Chrysler to restructure.

In total, the federal government wrote off $4.2 billion worth of debt in the 2018-19 fiscal year, which ended on March 31, 2019. Almost $3.6 billion of it was under the Canada Revenue Agency, the federal institution tasked with collecting and administering Canadians’ taxes. That amount is split among 1.2 million separate files.

Employment and Social Development Canada also forgave nearly $400 million worth of student loans and debts, a large chunk of the $800 million in total debt that Ottawa decided to forgive.

Overall, write-offs, forgiveness, remissions and waivers accounted for $5.25 billion in money that the Trudeau government does not expect to get back.

-With files from Kirsten Smith

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