by Christopher Guly
OTTAWA, May 12 (Xinhua) -- After providing emergency relief in the form of loans and wage subsidies to small and medium-sized enterprises, the Canadian government offered support on Monday to Canada's bigger businesses during the COVID-19 pandemic.
A new program, called the Large Employer Emergency Financing Facility (LEEFF), will provide bridge financing starting at 43 million U.S. dollars for major companies with annual revenues of at least 214 million dollars.
LEEFF is not a bailout, Canadian Prime Minister Justin Trudeau said during his daily COVID-19 news conference. Rather, its purpose is to help large corporations "weather the storm and "avoid bankruptcies," he said. It is "not to fix pre-existing insolvencies or restructurings" or "to provide low-cost lending to companies that don't need it."
At a separate news conference, Finance Minister Bill Morneau said companies that receive the financing "will be required to commit to future climate disclosures and environmental sustainability goals," and will be disqualified if "they've been convicted of tax evasion."
All sectors, including the airline industry but excluding the financial sector, will be eligible to apply for LEEFF, he added.
Trudeau gave reporters further information on the qualification criteria for the bridge-financing initiative. "There will be strict limits on dividends, share buy-backs and executive compensation," he said.
"To stand strong against tax avoidance and tax evasion, we will require companies to share with us their complete financial structure as they apply for funding," he added.
Jagmeet Singh, leader of Canada's left-of-center New Democratic Party, said that any financial support for corporations must have "strings attached," while aid must go toward protecting the jobs of Canadian workers and not end up as CEO bonuses.
During the 2008-09 global financial crisis, the Canadian government provided automobile manufacturers General Motors and Chrysler with more than 9.3 billion dollars in financing to restructure their businesses, and significantly restricted management pay and perks.
Trudeau explained that major employers accessing LEEFF will have to demonstrate that they are protecting workers' pensions and their right to collective bargaining, as well as a commitment to their company's "continued operation" in Canada.
The climate-action aspect of the financing arrangement has been welcomed by Greenpeace Canada.
"It makes sense that companies seeking public support agree to limit dividends and executive pay, forgo tax havens and start aligning their business model with Canada's climate-change targets," Keith Stewart, senior energy strategist with the environmental organization, said in a statement.
"Companies funding campaigns to oppose action on climate change should be excluded from the program," he added. Enditem