During its first fifty years, FBDB was a remarkable, viable and profitable tool for the development of Canadian small businesses. On July 13, 1995, the Parliament of Canada passed the Business Development Bank of Canada Act, which redefined and updated its structure and mandate. It ceased being a "lender of last resort" and began offering services that were complementary to those available at other financial institutions.
BDC was asked to fill gaps in the lending market by also focusing on the financial needs of small businesses that were exporting or in the knowledge-based industry, while continuing to support traditional sectors. In addition, BDC's mandate included areas considered neglected by the private sector (aboriginals, women and young entrepreneurs). Lastly, BDC was required to obtain a return on equity equivalent to the government's cost of funds.
Reengineering its products and services
BDC launched numerous innovative programs in keeping with its new mandate. It reengineered its products and services to provide global solutions at every step of small business development and began offering venture capital and subordinate financing to young businesses in the knowledge-based industry. These financing solutions fell under the Investment Group, which succeeded the Venture Capital division.
The Management Services Department, renamed the BDC Consulting Group, also reengineered its integrated solutions to increasingly focus on productivity and innovation.
New customer-focused initiatives
In 1995, BDC established a mechanism to handle complaints and set up a toll-free customer service line. A brochure, "If you're not happy, we're not happy", was created and made available to clients at all BDC offices, and an internal training program was developed.
The following year, BDC moved some of its business centres to more prominent locations in order to obtain greater exposure, and launched its www.bdc.ca web site. It also issued a Charter of Client Rights and appointed an Ombudsperson. In its efforts to reach more entrepreneurs, BDC continued to sign many different types of agreements with regional organizations and chartered banks.
Fiscal 1996 was one of the most important and stimulating years in the organization's history. In 1995, after having operated without government financial support for a sixth consecutive year, BDC continued to be increasingly independent of the federal treasury. For the first time, it issued $50 million in preferred shares, paying dividends to the Government of Canada.
BDC pays its first dividend to the Government of Canada
Fiscal 1997 marked a vital step in BDC's evolution. It posted a record profit of $50.7 million and declared the first dividend in its history. In addition, its consulting services no longer required government funding.
To help businesses prepare for the new millennium, BDC launched its Year 2000 Ready program, which included a questionnaire to identify possible problems, and provided financing for updating software and hardware for the year 2000. In partnership with the Canadian Tourism Commission, it also launched a $500 million Tourism Investment Fund to stimulate the creation of high-end tourism infrastructures outside major urban centres.
In 1999, it launched the Innovation Loan and the techno.net term loan to help small businesses take advantage of the many opportunities offered by e-commerce. It also opened ten new specialized entrepreneurship centres to help meet small business needs.
The new millennium – keeping pace with a rapidly changing world
Over the following years, BDC evolved in step with the economic environment. It continued to focus on innovation, e-business and productivity, and launched the Productivity Plus Loan to support these efforts.
The Consulting Group also played an important role, developing the Growth Potential Assessment tool and the Tech-Strategy program to encourage the use of technology to improve productivity.
In fiscal 2001, BDC created its Aboriginal Banking division, built a network of Aboriginal management consultants and developed consulting services specifically for this market. It also launched the national Aboriginal Youth Business Plan Competition, called E-Spirit, and the Aboriginal Banking Newsletter.
That same year, all employees were given access to the Internet. BDC acquired new information technology systems for processing of new loans, human resources, payroll, general ledger, Consulting Group systems and the intranet. It was one of the first financial institutions to offer full electronic access to all of its business financing services and solutions. BDC ConnexTM, created in 1998, uses information technology to defy the time and distance constraints that slow down traditional banking operations – providing small businesses throughout Canada with access to BDC at all times.
BDC took further steps to get closer to its clients, expand the range of its operations and become more efficient. In 2001, it set up a new work organization model.
Fiscal 2002 was marked by the events of September 11 and the resulting economic slowdown. BDC offered its clients the option of suspending their principal payments for four months during this period of uncertainty. The Canadian venture capital industry was hit hard: investment activities dropped to an all-time low and divestment opportunities were virtually non-existent. BDC stayed the course and remained a leader in the venture capital market, notably paying a $16.7 million dividend to its shareholder.