Prime Minister Justin Trudeau unveiled Monday a new multimillion-dollar loan program aimed at helping large businesses keep their workers on the payroll and weather the COVID-19 pandemic.
The new federal program, dubbed Large Employer Emergency Financing Facility (LEEFF), will provide bridge financing to large companies if they are unable to obtain financing through other means, Trudeau said.
“But let me be clear: these are bridge loans, not bailouts,” Trudeau said.
“Just as we are finding ways to support small and medium-sized businesses, we’ll provide loans to the largest enterprises to help them weather the storm, and protect the millions of jobs they provide across Canada.”
The LEEFF program will be open to large for-profit businesses – with the exception of those in the financial sector – as well as certain not-for-profit businesses, such as airports, with annual revenues generally in the order of $300 million or higher.
To qualify for LEEFF support, eligible businesses must be seeking financing of about $60 million or more, have significant operations or workforce in Canada, and not be involved in active insolvency proceedings.
“The goal here is not to fix pre-existing insolvencies or restructurings. Nor is it to provide low-cost lending to companies that don’t need it,” Trudeau said.
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Financing will be accessible to every industry sector, in a way that is consistent in every province and territory, right across Canada, he added.
The federal government expects any company that receives financial support to make and keep certain commitments, Trudeau said.
“Those include maintaining jobs and investment; respecting collective agreements and pension obligations; and environmental and climate commitments,” he said.
“In particular, there will be strict limits on dividends, share buy-backs and executive compensation.”
To prevent tax avoidance and tax evasion, the federal government will require companies to share their complete financial structure as they apply for funding, Trudeau said.
“Ideally, private-sector lenders are adequate for the needs of large businesses,” Trudeau said. “But in an extraordinary situation when that isn’t always enough, we must act to prevent massive harm to Canadian workers and families, and the Canadian economy.
“We will not allow millions of people to lose their livelihoods, because of unprecedented events that were beyond their control.”
Goldy Hyder, president and CEO of the Business Council of Canada, welcomed the new federal program.
“The priority of our members throughout the health emergency has been to preserve as many jobs as possible,” Hyder said in a statement.
“We look forward to seeing additional details about the measures unveiled today, but there is no doubt at all about the need.”
The new program comes on top of the emergency wage subsidy program designed to help businesses retain their employees.
On Friday Trudeau announced that the Canada Emergency Wage Subsidy will be extended beyond June to help kick-start the Canadian economy as provinces and territories begin to gradually reopen over the coming months.