Today, Minister of Finance Bill Morneau and Minister of Innovation, Science and Industry Navdeep Bains announced new liquidity support measures for Canada’s large and medium-sized businesses impacted by COVID-19.
These measures include a new Large Employer Emergency Financing Facility (LEEFF), expansion of the Business Credit Availability Program (BCAP) and continued financing through Farm Credit Canada, the Business Development Bank of Canada (BDC), Export Development Canada (EDC) and the Canada Account.
Minister Morneau stated that this bridge financing will be available to all hard-hit industries including the airline, retail, hospitality and energy sectors. The financing will be applied in a consistent manner to all sectors.
- Financing will be available to companies with $300 million or more in annual revenue that are seeking $60 million or more in additional liquidity to address the impacts of COVID-19.
- LEEFF will be open to large for-profit businesses – with the exception of those in the financial sector – and to certain not-for-profit businesses, such as airports.
- Applications will be reviewed by the Canada Development Investment Corporation and Innovation, Science and Industry.
- LEEFF guiding principles:
- Companies seeking support must demonstrate how they intend to preserve employment and maintain investment activities.
- Recipients will need to commit to respect collective bargaining agreements and protect workers’ pensions.
- Support will not be used to resolve insolvencies or restructure firms.
- LEEFF will require strict limits to dividends, share buy-backs, and executive pay.
- An assessment may be made of a company’s employment, tax, and economic activity in Canada, as well as its international organizational structure and financing arrangements.
- The program will not be available to companies that have been convicted of tax evasion.
- Companies will be required to commit to publish annual climate-related disclosure reports consistent with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures, including how their future operations will support environmental sustainability and national climate goals.
- The program will apply a standard set of economic terms and conditions.
- The full details of the LEEFF program and application process are still being worked on and are expected in the coming days.
- Expansion of the Business Credit Availability Program (BCAP) to mid-sized companies with larger financing needs with loans of up to $60 million per company and guarantees of up to $80 million.
- Continued financing to businesses through Farm Credit Canada, the BDC, and EDC, including through the Canada Account.
Consult the Sussex COVID-19 Guide for information on supports made available across the Federal, Provincial and Municipal Governments.
As the details of the programs announced today become available, let Sussex help connect you with the right people in government to help your organization get through these extraordinary times.
Please reach out to your Sussex representative directly or to a member of the Federal Government Relations Team.