The federal government today announced some long awaited assistance for Canada’s largest employers in all sectors, including those in the oilpatch, to help them keep from going under and to position them for a rapid economic recovery.

The Large Employer Emergency Financing Facility (LEEFF) will provide bridge financing to employers with annual revenue of $300 million whose needs during the COVID-19 pandemic are not being met through conventional financing, Prime Minister Justin Trudeau said this morning.

“These are bridge loans, not bailouts,” he emphasized. “We are providing support to these large employers to protect millions of jobs right across the country.”

The program comes with strings attached. One requirement is that recipient companies 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.

“We have seen many oil and gas companies make commitments already around net zero by 2050, around understanding we need to do better in terms of emissions, both as a country and as a sector,” he said. “That’s why we’re expecting them to put forth a framework in which they will demonstrate their commitment to reducing emissions and fighting climate change.”

The government’s support for large companies through LEEFF will be delivered by the Canada Development Investment Corporation, in co-operation with Innovation, Science and Economic Development Canada (ISED) and the Department of Finance.

The program will be open to large for-profit businesses — with the exception of those in the financial sector — as well as certain not-for-profit businesses, such as airports, with annual revenues generally in the order of $300 million or higher. To qualify for LEEFF support, eligible businesses must be seeking financing of about $60 million or more, have significant operations or workforce in Canada, and not be involved in active insolvency proceedings.

Broader sectoral dynamics for LEEFF applicants will be considered through processes led by ISED. 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 be designed to protect the interests of taxpayers and will require the co-operation of applicants’ private sector lenders, to ensure government financing is focused on sustaining operations.

The government is in the final stages of establishing the program and further information about the application process will be provided shortly.

Trudeau said the goal of the business credit program is not to fund non-viable business or allow them to restructure, nor is it to provide low interest loans to large companies that don’t need them. Financing will be fair and will be accessible to every industry sector in a way that is consistent in every province and territory right across Canada, he said. “And, critically, we will protect workers and hold companies accountable.”

Most important is the protection of jobs, with companies required to make certain requirements and keep them, he said. Those include maintaining jobs and investment; respecting collective agreements and pension obligations; and environmental and climate commitments.

There also will be strict limits on dividends, share buybacks and executive pay. Although more details are to come, the principle is very clear, said Trudeau. “If a company wants to access taxpayer-funded financing for large employers, in order to protect employees across the country, the money has to go to those employees and not high paid executives.”

Business will be required to disclose their financial structure when they apply for funding.

Expanded Business Credit Availability Program

The government also will be expanding 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 program, Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) will work with private sector lenders to support access to capital by “tens of millions of dollars” for Canadian businesses in all sectors and regions, said Trudeau.