Federal government unveils new financial aid measures to support large businesses
Prime Minister Justin Trudeau has announced new financial aid measures for medium and large-sized businesses amid the COVID-19 pandemic.
The announcement, made prior to his daily address, was delivered by Finance Minister Bill Morneau and Industry Minister Navdeep Bains. It included a program that helps Canada’s large businesses obtain bridge funding.
“Employers, large and small, are facing challenges due to the COVID-19 global pandemic. Our government has their backs,” said Morneau in a statement.
“We know that many businesses of all sizes need our help in order to keep their many employees on the payroll and their suppliers paid until the economy recovers. That is why today’s measures will help both large and mid-sized employers to get access to the financing they need to make it through this extraordinarily challenging time.”
On Monday, the Government of Canada announced it is establishing a Large Employer Emergency Financing Facility (LEEFF) “to provide bridge financing to Canada’s largest employers, whose needs during the pandemic are not being met through conventional financing, in order to keep their operations going.”
According to the federal government, the objective of this support is to help protect Canadian jobs, help Canadian businesses weather the current economic downturn, and avoid bankruptcies of otherwise viable firms where possible.
They also say that this support “will not be used to resolve insolvencies or restructure firms, nor will it provide financing to companies that otherwise have the capacity to manage through the crisis.”
Eligible Canadian companies have annual revenues of $300 million or higher.
The businesses seeking this support will have to demonstrate how they intend to preserve employment and maintain investment activities.
The feds also announced they will expand the Business Credit Availability Program (BCAP) to mid-sized companies with larger financing needs, which will include loans of up to $60 million per company, and guarantees of up to $80 million.
“We promised that we would be here to support all Canadians, and that is why we are announcing new measures that will help save middle class jobs, safeguard workers’ benefits, and protect our economy,” said Trudeau in a statement.
“This will help businesses keep workers on the payroll, and put more Canadians in a position to recover quickly once we make it through these uncertain times.”
Minister Bains said that the government will continue to analyze “specific pain points” that coronavirus is putting on all industrial sectors.
The government says it is in the final stages of establishing the program and further information about the application process will be provided shortly.