Federal government to unveil details of large business loan program
The federal government is stepping up efforts to persuade companies to rehire workers now that the Canadian economy begins to emerge from the coronavirus shutdown.
He is expected to unveil more details on Wednesday about his promised loan program for large businesses and commercial rent relief for small and medium-sized businesses.
This includes more information on how companies can apply for the programs and the conditions that will apply.
Today’s target follows last week’s extension of the 75 percent wage subsidy for three months, until the end of August, and Tuesday’s announcement that the government is expanding the criteria for eligibility for its small business loan program.
The latter program offers interest-free loans of $ 40,000 to eligible small businesses to cover costs such as rent and utilities, with the option to forgo a quarter of the amount if repaid by the end of 2022. .
Tuesday’s patch extended the program to businesses that don’t have traditional payrolls, such as family businesses that pay themselves in dividends and businesses that only employ subcontractors.
“It’s about getting people back to work and giving businesses the confidence to reopen, rehire and even grow, because how our economy will recover and how our country will remain resilient and prosperous is to put back the Canadians at Work, ”said Prime Minister Justin. Trudeau said Tuesday.
The focus today on rent relief and the corporate loan program is intended to send the same message.
The Large Employers Emergency Funding Facility (LEEFF) was announced last week, aimed at providing short-term bridge financing to businesses with annual sales of $ 300 million or more looking for loans worth at least $ 60 million but unable to obtain them from banks or other private lenders.
It must come with strict conditions, for which the government has so far provided few details. Typically, terms should include limits on a company’s dividends, share buybacks and executive compensation, as well as a requirement that each company explain how it intends to contribute to carbon reduction targets. from Canada.
Trudeau also said that applicants whose financial records show signs of “aggressive tax avoidance” will be banned, as will companies found guilty of tax evasion in the past.
While the LEEFF program was generally well received over the past week, many companies said they had to wait for details before knowing if it would be useful to them.
The government had hoped it would be used by airlines to stay afloat during the pandemic, which has virtually crippled air travel. But late last week, Air Canada announced plans to lay off about 20,000 employees.
Under the Commercial Rent Relief program, landlords must apply for a 50% subsidy paid by the federal and provincial governments, with tenants paying 25% more. But critics said many landlords, who are expected to agree to a 25% reduction in the rent they receive, have refused to participate.