When the pandemic began, Isabelle Hudon was living in Paris and serving as Canada’s ambassador to France. It was there, she says, she first heard the concept of “building back better”: creating a more inclusive and greener world in the aftermath of a disaster.
Now back in Montreal and beginning a new job as president of the Business Development Bank of Canada, or BDC, Ms. Hudon said she’s taken lessons from her diplomatic experience and she’s ready to apply them to her leadership of the Crown corporation that provides financing to small and medium-sized businesses.
“Should impact be defined only by financial results or not?” she asked in an interview.
The answer, she said, is no: That she would like to see the bank also be judged for its actions in fighting climate change and improving the lives of female, Indigenous and Black entrepreneurs.
Ms. Hudon began her role at BDC in August, at a time when small and medium-sized businesses were hoping that the worst days of the pandemic were behind them. BDC was one of the Crown corporations called upon early to work with financial institutions to provide additional liquidity to entrepreneurs who were struggling with pandemic-related lockdowns. BDC, which had $36-billion in loans and investments in its portfolio at the end of the 2020 fiscal year, provided an additional $2.3-billion under the Highly Affected Sectors Credit Availability Program, and another $4-billion through other programs.
Before starting at BDC, Ms. Hudon had spent most of her career in the private sector. She was an insurance executive at Sun Life Financial, and served on boards, including Hydro-Québec. In 2017, Prime Minister Justin Trudeau appointed her to serve as ambassador to France, replacing former foreign affairs minister Lawrence Cannon. After the 2019 election, in which the Liberals lost seats, Mr. Trudeau recalled Ms. Hudon to Ottawa for a few weeks to get her advice on how to win back support in Quebec.
She said she took the request as a vote of confidence from the Prime Minister, and that she hopes to bring that political eye to her new role.
“I think that BDC can play a huge role on delivering what the federal government needs to deliver to rebuild better and in a more inclusive way,” Ms. Hudon said.
Mike Pedersen, chair of BDC’s board and former head of Toronto-Dominion Bank’s U.S. personal and commercial banking arm, said Ms. Hudon was tapped for the leadership of BDC because of her executive experience, strong business ties and political savvy.
“She is off to a strong start already, and our whole board is excited to see her take BDC to the next level,” Mr. Pedersen said in an e-mail.
On being more inclusive, Ms. Hudon said she recognizes BDC needs to do more to help underserved clientele, and she wanted to make that an important part of how the bank reported on its results, though how to do that was still in an early stage. BDC has made new investments in recent years to try to reach underserved groups, such as $130-million directed to the Black Entrepreneurship Loan Fund in May.
A stronger focus on fighting climate change would be in line with movements in the private sector: This month, Canada’s six largest banks joined former Bank of Canada governor Mark Carney’s Net-Zero Banking Alliance through the United Nations.
“I think that this unique moment of urgency sentiment will not come back,” Ms. Hudon said. “So we have to seize the moment and act.”
She said BDC can do that by making use of its financial and advisory services to steer its small and medium-sized clients into directions that would reduce their emissions. It would build on earlier efforts from the Crown corporation, such as investments in clean technology from its venture-capital arm that began in 2013. BDC’s cleantech division had made $244-million in investments as of the end of the 2020 fiscal year.
“I do think it is our responsibility not to let down any companies that are not yet into the transition corridor” toward a low-carbon footprint, Ms. Hudon said. “It is up to us to help them find solutions to up their game or speed up their transition.”
In addition to promoting climate, Ms. Hudon said another one of her priorities is in helping companies with intellectual property scale up while retaining their Canadian ownership. BDC launched a $160-million fund last July to support companies that are rich in intangible assets but need cash to grow.
Natalie Raffoul, an intellectual-property lawyer and expert panelist with the Ontario government who has criticized the slow pace of government innovation strategies in the past, said she’s so far been impressed with BDC’s IP approach. She praised the IP team leader, Lally Rementilla, in her efforts to reach out to and work with incubators and accelerators across the country.
“What it signals is that, look, we’re valuing this stuff,” Ms. Raffoul said. “We know it’s important. And we’re willing to ascribe a value to that and help you leverage the kind of non-diluted funding you’re looking for in order to really scale your business.”
Sahir Khan, the executive vice-president of the Institute of Fiscal Studies and Democracy at the University of Ottawa, said those public-private collaborations are a key way BDC could make its mark.
“Beyond deploying its own capital, it could be helpful to see BDC more aggressively generate deals that integrate public- and private-sector financing with the capabilities of the bank’s small and medium-sized client base,” Mr. Khan said in an e-mail.
In the big picture, Ms. Hudon said she thinks the pandemic will fuel a wave of new entrepreneurs and employees who adopt more of an entrepreneurial mindset.
“The pandemic lasted long enough to have people think about how they want to work, how they want to live,” she said. “I do not think we will come back the way we were before.”
Editor’s note: An earlier version of this article said BDC had $36-million in loans in its portfolio at the end of fiscal 2020. It should have said loans and investments. This version has been updated.
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