Prime Minister Justin Trudeau said the new bridge financing announced on Monday for large businesses are loans and “not bailouts.”
Trudeau said the aid is to support large businesses, to help weather the storm and protect millions of jobs across Canada.
“I want to be clear, this is bridge financing, not a blank cheque,” said Trudeau. “We are providing support to these large companies to protect jobs across the country. The goal is not to fund non-viable businesses or allow them to restructure.”
The prime minister said that companies that receive the support will be expected to make and keep specific commitments.
Earlier on Monday, Trudeau announced Canada’s new financial aid measures for medium and large-sized businesses amid the COVID-19 pandemic.
The initial 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.”
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.
The financing will be available to every sector, and for companies that have annual revenues of $300 million or higher.
Oil and gas companies are among those expected to receive funds from LEEFF.
“We have seen many oil and gas companies make commitments around net zero by 2050,” Trudeau said on their ability to meet commitments. “We’re expecting them to put forward a frame that which they will demonstrate their commitment to reducing emissions.”
Trudeau also said the money received by large companies will have to support employees, and “not high-paid executives.”
The prime minister said that Canada is still in an emergency mode, and that more COVID-19 tests will need to be done as provinces begin to reopen their economies.
“As we reopen, it’s important that we have strong testing protocols right across the country,” he said. “We need to see more lab capacity opening up.”
Trudeau stressed the progress Canada has made in slowing the spread of COVID-19 “could all go up in smoke” if provinces move too quickly in reopening.
“We’ll be pushing for caution,” he said.
The government says it is in the final stages of establishing the LEEFF program and further information about the application process will be provided shortly.