(Update: May 11 @ 8:22 am): Prime Minister Justin Trudeau has announced the federal government’s latest measures to prop up the Canadian economy during the COVID-19 crisis.
Speaking in Ottawa this morning, he said the government will move to provide funding to large companies.
The Business Credit Availability Program will also be expanded to provide help to mid-sized firms.
Trudeau said Export Development Canada and the Business Development Bank of Canada will work with the private sector to increase lending “in the tens of millions” for Canadian companies.
The cash for large firms will be “bridge financing,” the prime minister stressed, and not “a blank cheque.”
Photo credit: File
Among the conditions for receiving the cash, companies must put limits on dividends, share buy-backs and executive pay.
Workers will also be protected and big firms held “accountable,” Trudeau added.
He said his primary concern was to avoid seeing companies “going under” and jobs being lost.
The government does not want to fund non-viable firms, he said, and does not want to give cash to companies that do not need it.
Companies that benefit from the loans must share their complete financial structure, he added.
The prime minister also said that large companies found to be avoiding tax will be told to change their set-up if they wish to receive support from the government.
He said that if Canada's large companies were to suffer and potentially collapse, it would cause serious, long-term damage to the country's economy and put millions of jobs at risk.
(Original story: May 11 @ 7:05 am): The federal government says it will provide loans and financing to the country’s largest employers to help them weather the COVID−19 economic crisis.
The Liberals are promising bridge financing to companies whose financial needs aren’t being met by conventional credit so they can stay open and keep employees on their payrolls.
The government says in a release that another goal of the financing program, aimed at companies with $300 million or more in revenues, is to avoid bankruptcies of otherwise viable firms wherever possible.
Photo credit: Canadian Press
Rules on access to the money will place limits on dividends, share buy−backs and executive pay.
Any companies convicted of tax evasion won’t be eligible for the money, which will be open to all sectors of the economy.
Finance Minister Bill Morneau says the low−cost lending isn’t for those who don’t need it, nor is it to rescue companies that were facing insolvency before the crisis.
