On May 11, the federal government announced the Large Employer Emergency Financing Facility (“LEEFF”) program to help large Canadian for-profit businesses that have been affected by the COVID-19 pandemic and the economic downturn. The objective of this program is to help keep Canada’s largest employers operating, avoid bankruptcy of otherwise viable firms if possible, and protect Canadian jobs by allowing businesses to keep their employees on payroll.
LEEFF provides bridge financing to companies where their financial needs are not being met by private-sector lenders and conventional financing. Prime Minister Justin Trudeau made it clear that the financing this program provides are “bridge loans, not bailouts”. The program is available to large commercial businesses across all sectors that are struggling financially, with the exception of those in the financial sector, as well as certain not-for-profit businesses such as airports. Below is a summary of the key points from the May 11 announcement:
To be eligible for the LEEFF program, a business must:
- be seeking financing of $60 million or more;
- have annual revenues generally in the order of $300 million or higher:
- have significant operations or workforce in Canada; and
- not be involved in ongoing insolvency proceedings.
Businesses seeking financial support through LEEFF must:
- demonstrate how they intend to preserve employment and maintain investment activities;
- commit to respect collective bargaining agreements and protect workers’ pensions;
- adhere to strict limits to dividends, share buy-backs, and executive pay; and
- commit to publish annual climate-related disclosure reports to show how their future operations will support environmental sustainability and national climate goals.
Financing through the LEEFF program will not be available:
- to resolve insolvencies or restructure firms;
- to provide financing to companies that otherwise have the capacity to manage through the crisis; and
- to companies that have been convicted of tax evasion.
“We will not allow millions of people to lose their livelihoods, because of unprecedented events beyond their control,” said the Prime Minster.
More details regarding the LEEFF criteria and application process will be provided in the coming days, and we will summarize those on our blog.
Changes to Provincial and Federal Covid-19 Benefits happen rapidly and often. We update our helpful Benefit Chart just as frequently. Stay current on the most essential benefits available by visiting our Chart. We’ll be posting on LinkedIn whenever it is updated. Or you can find it on the Harper Grey COVID-19 Resource Hub – check it out here.
This update was authored by Ryan Chan. Questions? Comments? Concerns? Or looking for more information on developments regarding the evolving COVID-19 pandemic? Contact Ryan at email@example.com or anyone else listed on the authors page.