Prime Minister Justin Trudeau and the federal government unveiled details of a new government aid program on Monday, aimed at helping large Canadian businesses navigate the COVID-19 pandemic.
During a routine press conference, Prime Minister Trudeau conveyed specifics of the Large Employer Emergency Financing Facility (LEEFF) program, which will offer bridge financing for bigger Canadian employers who are in need of capital.
“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,” said the prime minister.
In his announcement, the Prime Minister of Canada clarified that “these are bridge loans, not bailouts” for companies with revenue of $300 million or more.
The federal government is emphasizing that the money being extended to large companies through the LEEFF program is to help them avoid possible bankruptcy as a result of COVID-19, not to save businesses that were struggling before the pandemic hit.
“The goal here is not to fix preexisting insolvencies or restructurings,” said Trudeau. “Nor is it to provide low-cost lending to companies that don’t need it.”
The government said that funding will be accessible to all sectors in a way that is consistent across provinces and territories.
Prime Minister Trudeau reiterated the words of Finance Minister Bill Morneau from an earlier press conference, suggesting that they were going to be holding companies accountable to ensure the federal money was being used appropriately.
“Any company that receives this support will be expected to make and keep certain commitments,” said the prime minister.
The government conditions include:
- Maintaining jobs and investment
- Respecting collective agreements and pension obligations
- Environmental and climate commitments
Trudeau also said that, “In particular, there will be strict limits on dividends, share buybacks and executive compensation.”
Companies will be required to share their complete financial structures with the government, in an effort to maintain transparency, while helping to avoid tax evasion and fraud.
“Ideally, private sector lenders are adequate for the needs of large businesses, 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,” concluded Trudeau.
Further details on Canada’s approach to monitoring the bridge financing program are expected in the future.
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