‘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 federal government will establish a Large Employer Emergency Financing Facility (LEEFF) to provide bridge financing to Canada's largest employers and help protect Canadian jobs, Prime Minister Justin Trudeau announced on Monday.
"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. “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 support aims to help Canadian businesses weather the current economic downturn, and avoid bankruptcies of otherwise viable firms where possible. It is not to 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.
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 program will also require strict limits to dividends, share buy-backs and executive pay.
The financing is intended to apply to all eligible sectors consistently. Program details are still being worked out and information on the application process is expected shortly.
The government will also expand the Business Credit Availability Program (BCAP) to mid-sized companies with larger financing needs, providing mid-market businesses with 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.
The federal government will also continue to provide financing to businesses through Farm Credit Canada, the BDC, and EDC, including through the Canada Account.
Last week, Prime Minister Justin Trudeau announced $252 million in funding for the agriculture sector to help workers and employers during the time of COVID-19.
Meanwhile, Northwest Territories is now accepting applications for the Support for Entrepreneurs and Economic Development (SEED) program worth $4 million.
The 2020-21 SEED budget approved by Members of the Legislative Assembly in the 2020-21 Interim Appropriation totals $3.86 million. The Department of Industry, Tourism and Investment (ITI) has increased this budget to $4 million through a reallocation of internal resources.
The SEED program will be used to help businesses recover as the COVID-19 pandemic subsides and encourage new, innovative proposals that reflect the realities of the new post-COVID-19 economy. The Department of ITI has developed a program guideline on keeping investment within communities and supporting local employment and will prioritize applications from NWT businesses whose proposals focus on economic recovery.
In 2018-19, the SEED program resulted in an average of one dollar of expenditure translating into $1.6 additional GDP.