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Government of Canada Establishes Large Employer Emergency Financing Facility and Expands the Business Credit Availability Program

Businesses in all sectors across Canada are under severe and unprecedented pressure. Due to COVID-19, consumer demand is at an all time low. Large companies are struggling to obtain access to capital to stay afloat during this difficult time. On May 11, 2020, the Government of Canada announced much-anticipated programs to facilitate financing for large Canadian companies. The LEEFF program is not geared towards any specific sector however, certain industry groups, notably including those representing the oil and gas and aviation sectors, have expressed optimism about the announcement but are awaiting further details of the conditions to which the financing will be subject. This blog post is up to date as of May 13, 2020.

Large Employer Emergency Financing Facility (LEEFF)

The announcement includes the establishment of the Large Employer Emergency Financing Facility (LEEFF). The LEEFF program will 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. 

This support for large companies through LEEFF will be delivered by the Canada Development Investment Corporation (CDEV), in cooperation with Innovation, Science and Economic Development Canada (ISED) and the Department of Finance. To qualify for LEEFF support, eligible businesses must:

  • be a large for-profit businesses – with the exception of those in the financial sector – as well as certain not-for-profit businesses, such as airports;
  • have annual revenues of approximately $300 million or higher;
  • be seeking financing of approximately $60 million or more;
  • have significant operations or workforce in Canada; and
  • not be involved in active insolvency proceedings.

The LEEFF program is expected to include strict limits to dividends, share buy-backs, and executive pay. The Government, in considering a company’s eligibility for assistance under the LEEFF program, may conduct an assessment of its employment, tax, and economic activity in Canada, as well as its international organizational structure and financing arrangements. The LEEFF program will not be available to companies that have been convicted of tax evasion.

As a condition of the LEEFF, recipient 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.

Business Credit Availability Program (BCAP)

In addition to the LEEFF, the Government of Canada committed to expanding the Business Credit Availability Program (BCAP) to mid-sized companies with larger financing needs. Support for mid-market businesses will include loans ranging between $12.5 and $60 million per company, and guarantees of up to $80 million. The Business Development Bank of Canada (BDC) anticipates that qualifying companies will have annual revenues in excess of approximately $100 million. Through the BCAP, Export Development Canada (EDC) and BDC will work with private sector lenders to support access to capital for Canadian businesses in all sectors and regions. Additional details regarding the expanded BCAP are still being finalized and will be made available shortly.

The impact of these programs will be driven by the details which have not yet to be released and developed. We are monitoring developments and will provide updates as additional details are released by the Government of Canada.

This update is part of our continuing efforts to keep our clients informed about COVID-19. Check our COVID-19 Hub for further updates on this and other related topics. To discuss how you or your organization might benefit from theses initiatives, or if you have questions about the impact of COVID-19 on your business, please contact your McCarthy Tétrault trusted advisor or one of the authors.



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