Large companies seeking bridge financing through a new federal loan program will have to either offer the government an ownership stake or provide a cash equivalent.
Finance Minister Bill Morneau says the terms will be the same for any company asking for help through the Large Employer Emergency Financing Facility (LEEFF) program that opens for applications today.
He says the terms are to ensure companies using the program receive bridge loans, not bailouts, to get through the COVID-19’s economic crisis.
The Liberals have said the loans would be on commercial terms and require companies to have already gone to banks or the market and been unable to meet their financial needs.
Recipients would also have to agree to limits on executive compensation, dividend payments and share buy-backs, as well as show they are committed to reducing greenhouse-gas emissions.
This loan program is for Canada’s largest corporations so they can stay open and keep employees on their payrolls and to avoid bankruptcies of otherwise viable firms, wherever possible.