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'Bridge loans, not bailouts': Feds pledge COVID-19 financing help for Canada's biggest companies

Last Updated May 11, 2020 at 8:54 am PDT

FILE - Prime Minister Justin Trudeau speaks during his daily press conference on COVID-19 in front of his residence at Rideau Cottage in Ottawa, on Sunday, April 19, 2020. THE CANADIAN PRESS/Justin Tang
Summary

The federal government is promising new financing supports for Canada's largest employers

The program is aimed at helping companies stay open and avoid layoffs

Financing program will not be available to any company that has been convicted of tax evasion

OTTAWA – The federal government says it will provide loans and financing to the country’s largest employers to help them weather the COVID-19 economic crisis.

The Large Employer Emergency Financing Facility will provide bridge financing to companies whose financial needs aren’t being met by conventional credit, so they can stay open and avoid layoffs.

“Our message to Canadian workers remains the same: We have your back,” Finance Minister Bill Morneau said.

He added after announcing supports for small and medium sized businesses, the government’s focus is now turning to large employers who are struggling through this pandemic.

“But let me be clear — these are bridge loans, not bailouts,” Prime Minister Justin Trudeau said Monday.

The program is aimed at companies with $300 million or more in revenues, and comes with conditions to protect workers and taxpayers.

“Those include maintaining jobs and investment, respecting collective agreements and pension obligations, and environmental and climate commitments,” Trudeau explained, reiterating comments made by Morneau.

This will be available for all sectors across the economy, including those struggling most, like the airline and tourism industries.

There will be restrictions around executive pay, and companies convicted of tax evasion are disqualified.

Morneau noted the low-cost lending isn’t for those who don’t need it, nor is it to rescue companies that were facing insolvency before the crisis.

“It’s there to make sure that companies that came into this crisis on strong footing get to the other side, and can rebound quickly,” he said.

Meanwhile, the federal government is also expanding business and farm credit options so mid-market businesses can get loans of up to $60 million per company.

Conservative Leader Andrew Scheer said he’s not happy with the announcement, adding the prime minister had promised specific, unique support for sectors like energy.

“Because if this is it, this is certainly not what was promised nor what was expected,” Scheer said earlier Monday.