Canada says it will offer loans but not bailout to airlines
Many businesses across Canada have said that the billions in financial aid that the federal government has rolled out in recent weeks is unfortunately not enough to save them from going under in the midst of the economic destruction that the pandemic is causing.
New programs like the Canada Emergency Business Account (CEBA), Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Commercial Rent Assistance (CECRA) have been introduced to help ease the financial burden of the current situation on small businesses, but as Canadian companies continue to struggle, more packages are now being added to this list.
Prime Minister Justin Trudeau today announced additional aid for medium and large-sized businesses across the country, which will take the form of bridge loans.
Today, Prime Minister Justin Trudeau announced new measures to support businesses so they can keep their workers on the payroll and weather this pandemic:https://t.co/M9ZfhQvx0S— MétisNationalCouncil (@MNC_tweets) May 11, 2020
Trudeau emphasized that these are "not bailouts," and are ultimately meant to prevent mass bankruptcies and protect the citizens that big companies employ.
"Just as we are finding ways to help out small and medium sized businesses, we'll provide loans to the largest enterprises to help them weather the storm and protect the millions of jobs they supply," he said at a media briefing on May 11. "This will prevent massive harm to Canadian workers and families, and the Canadian economy."
Applicants will have to agree to certain conditions in order to access the funds, which are only to be used if they are unable to obtain capital through usual means, like private sector lenders.
These conditions include maintaining a certain number of jobs, honouring environmental commitments, and respecting existing collective agreements, investments and pension plans.
They will also have to disclose their full financial structure to the government, and there will be strict limits on things like executive salaries, dividends and share buybacks.
"The principle is very clear, the PM said. "If a company wants to access this public financing for large employers in order to protect employees across the country, the money has to go to support those employers and not high paid executives."
"Let me be clear: these are bridge loans, not bailouts," says PM Trudeau as he outlines principles & commitments of new financing measures for large businesses. Exec pay limits, sharing of financial structure are among obligations that companies will be required to meet. #cdnpoli pic.twitter.com/ZIDZes4IDu— CPAC (@CPAC_TV) May 11, 2020
There will also be tens of millions of dollars more capital made available to companies that need it through Export Development Canada and the Business Development Bank of Canada.
Ottawa will make sure that every industry and region in the country is able to fairly benefit from both of these new plans, including the oil and gas sector, so long as they can "demonstrate commitments to reducing emissions and fighting climate change."
The news comes just days after Air Canada declared a billion dollars in losses in Q1 2020 and the airline industry at large called for a government bailout.
Further details on the new plans will be announced in the coming days.
"How do they have the stones?" - indeed Evan, good question, on the airline industry - air Canada - wanting a taxpayer bailout AGAIN, after paying their CEO $11 MILLION, last year— The Blue Jay Times (@BlueJay58523226) May 5, 2020
In today's presser, the PM also stated that he believes provinces need to continue to ramp up their COVID-19 testing, and reminded Canadians that we are "not out of the woods yet" as far as the health crisis is concerned.
"Let caution and medical advice be your guides," he said. "When in doubt, if you can, stay home, avoid gatherings, wash your hands frequently and thoroughly, and maintain a two metre distance from everyone else."
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