COVID-19 has altered the way we live our lives and, every day, Canadians are facing new challenges during this crisis. As more people worry about paying their bills and caring for their loved ones, the Government of Canada is continuing to take unprecedented action to help protect middle class jobs, and the health and safety of all Canadians.
The Prime Minister, Justin Trudeau, today announced new measures to support businesses so they can keep their workers on the payroll and weather this pandemic.
Millions of Canadians pay their bills and feed their families by working for large and medium-sized businesses. The government will offer support to those businesses affected by COVID-19 based on a number of conditions. To help protect Canadian middle class jobs, and safeguard our economy, the Government of Canada will :
Establish 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. 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. 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. The additional liquidity provided through LEEFF will allow Canada’s largest businesses and their suppliers to remain active during this difficult time, and position them for a rapid economic recovery.
Use key guiding principles in providing support through the LEEFF, including:
Protection of taxpayers and workers: 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. The LEEFF program will require strict limits to dividends, share buy-backs, and executive pay. In considering a company’s eligibility to assistance under the LEEFF program, an assessment may be made of its 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. In addition, recipient companies would 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.
Fairness: To ensure support across the Canadian economy, the financing is intended to be applicable to all eligible sectors in a consistent manner.
Timeliness: To ensure timely support, the LEEFF program will apply a standard set of economic terms and conditions.
Expand the Business Credit Availability Program (BCAP) to mid-sized companies with larger financing needs. Support for mid-market businesses will include loans of up to $60 million per company, and guarantees of up to $80 million. Through the BCAP, Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) will work with private sector lenders to support access to capital for Canadian businesses in all sectors and regions.
Continue to provide financing to businesses through Farm Credit Canada, the BDC, and EDC, including through the Canada Account. This will ensure the government is able to respond to a wide range of financing needs, including for some large employers facing higher risks, with stricter terms in order to adequately protect taxpayers.
These measures are part of the Government of Canada’s COVID-19 Economic Response Plan, which has helped protect Canadian jobs, and committed billions in support to Canadians and businesses facing hardship as a result of the pandemic. This includes an extension on the Canada Emergency Wage Subsidy, which allows businesses to keep workers on the payroll. The government will continue to monitor and respond to the wide-ranging impacts of COVID-19, and take additional actions as needed to protect the health and safety of Canadians and stabilize the economy.
“We know that times have been tough, and Canadians are concerned about their jobs, and the health and safety of their families. 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. 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.”
The Rt. Hon. Justin Trudeau, Prime Minister of Canada
“Employers, large and small, are facing challenges due to the COVID-19 global pandemic. Our government has their backs. 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 Hon. Bill Morneau, Minister of Finance
“We know that Canadian workers and companies of all sizes are facing economic hardship and uncertainty during the COVID-19 pandemic. We continue to analyse the specific pain points that COVID-19 is putting on all our industrial sectors as they grapple with unprecedented financial difficulties during this crisis. The measures we are announcing today will add to the supports currently available to large employers in Canada to help them weather the storm during this difficult time.”
The Hon. Navdeep Bains, Minister of Innovation, Science and Industry