The prime minister Justin Trudeau on his arrival for the press conference on the COVID-19, in Ottawa, Wednesday
May 20, 2020 10h54
Updated at 18h25
COVID-19: Ottawa details the emergency credit to large employers [VIDEO]
The Canadian Press
OTTAWA — The loans provided to large companies by the federal government comes with several conditions that, according to the federal minister of Finance, will ensure the protection of the public’s money.
The emergency Credit to large employers (CUGE) is for companies that have annual revenues of more than $ 300 million and need to borrow at least $ 60 million to cross the pandemic of the COVID-19.
The minister, Bill Morneau was announced Wednesday morning that the federal government is now ready to process requests.
“We put in place of the loan conditions that will protect Canadians,” assured the minister, at a press conference in Toronto.
Thus, this credit will be 20 % of the “priority claims that are secured by existing lenders” and 80% of unsecured loan at an interest rate of 5 % the first year and 8 % the second.
“We will ask the listed companies to issue vouchers that will give us the option to acquire shares or receive the equivalent (…) for a total of 15 % of the amount received. If the companies are not listed on a stock exchange, they will pay a fee comparable,” said the minister, who hopes that the State’s coffers will benefit from the eventual economic recovery.
“We’re going to make it a priority to ensure that this program is fair and effective,” promised the prime minister Justin Trudeau in his speech to the daily, Wednesday morning.
The minister Morneau has also specified that the companies that will use this CUGE will also continue to use the wage subsidy which provides 75 % of the payroll until the end of the month of August.
Assistance for commercial rent
A portal will be launched next Monday, on the website of the canadian mortgage and housing corporation, to manage the emergency assistance program for rent commercial small businesses.
This program will provide a “forgivable loan” to the owners of the buildings so that they reduce by 75% the rent of the small businesses housed in them, on the condition that they have lost the majority of their income.”
This measure has, up to now, little interest to building owners, which pushes the representative bodies of the companies claim that Ottawa modifies it. However, as the federal government arrived at this formula after negotiations with the provincial governments, and rapid changes would be difficult to obtain.
Mr. Trudeau said that he “was really hoping” that the owners of commercial space participating in the program. He also pointed out, in passing, that these owners may find themselves without income if they expelled their tenants now.
“While many realize that we can work at home (…), it could well be a lot of vacant spaces in commercial buildings over the next few months. Who knows exactly what it will look like the world is post-pandemic?”, he asked.
The Trudeau government seems to have lost his last ally for the maintenance of the current suspension of parliamentary work normal.
The elect will meet virtually twice a week, and in person, but in a small group, once per week. The conservatives want a return to the parliamentary work in person, as soon as Monday. The bloquistes are some conditions, including changes to the delivery of the canadian emergency (PKU), not to require the same thing.
Wednesday morning, the chief bloquiste Yves-François Blanchet does démordait not.
“If the government wants it to continue to sit in restricted mode as it is now, with special rules, he must show himself worthy of his own request and we have communicated our demands to this effect”, he launched at his press conference.
The leader of the New democratic Party (NDP), Jagmeet Singh, wants him now, a greater role for the opposition.
“It has worked until now, but we believe that with the programs that the government has announced, with the assistance program for businesses, there is now a greater need to have more transparency,” said Mr Singh, at a press conference Wednesday morning.
The leader of the NDP suggests, as a conservative, the idea of meetings hybrids, like the british Parliament, where some elected officials would show up in person while others join via screens. The chief bloquiste is not closed to the idea, but felt that a simpler formula is more feasible in the short term.
“This is something interesting”, said Mr. Trudeau about these meetings hybrids, adding that discussions about this are ongoing with the opposition parties.
With regard to the requirements of the Bloc québécois, or changes to the PCU and the federal assistance for the fixed costs of the small businesses, the prime minister was not ready to give up.
“We continue to demonstrate a flexibility to the PCU. We know that we need to help more people. (…) Compared to the fixed costs, the biggest fixed cost is the rent of small businesses”, he said, referring to the rent assistance program commercial which will be available from 25 may.
Number of cases
There has been more than 1 337 000 tests administered in Canada. About 5 % of them have detected the disease. Across the country, we pass now to between 26 000 and 28 000 tests per day.
Up to now, there have been 79 503 cases confirmed or probable in the country as a whole. The COVID-19 has caused the death of 5956 Canadians.
Distribution of cases in the country, according to the most recent balance sheet provincial and territorial: 44 197 cases in Quebec, including 3647 deaths; 23 774 in Ontario, whose 1962 death; 6716 cases in Alberta, including 128 deaths; 2446 case in British Columbia, of which 146 deaths; 1045 case in Nova Scotia, including 57 deaths; 599 case in Saskatchewan, including six deaths; 290 cases in Manitoba, including seven deaths; 260 cases in Newfoundland and Labrador, including three deaths; 120 cases in New Brunswick, all cured and 27 cases in the Île-du-Prince-Édouard, all cured and 11 cases in the Yukon, all healed; five cases in the Territories-the North-West, all healed; no cases in Nunavut.
These balance sheets provincial and territorial addition to the 13 cases, all cured, by the passengers repatriated from the cruise ship Grand Princess on march 10.
TRUDEAU REQUEST THE COOPERATION OF THE OWNERS OF THE COMMERCIAL SPACES
The prime minister Justin Trudeau strongly encourage the owners of commercial spaces to join the federal program that will be launched next week and that will give small businesses a break in the rent which will be due in a few days.
Under this program, property owners will receive a repayable loan to cover half of the rent of small businesses in April, may and June, however, if they lower these rents by at least 75 % over the same period. But business associations are concerned that the owners are cautious, reluctant to participate in this program, which is offered jointly with the provinces and territories.
During his press conference daily newspaper, Mr. Trudeau said on Wednesday he “was really hoping” that the owners of commercial space participating in the program. He also pointed out, in passing, that these owners may find themselves without income if they expelled their tenants now.
“While many realize that we can work at home (…), it could well be a lot of vacant spaces in commercial buildings over the next few months. Who knows exactly what it will look like the world is post-pandemic?” he asked.
The canadian Federation of independent business (CFIB) states that in Canada, half of the owners of small and medium-sized enterprises (SMES) will not be able to pay their rent for the month of June without government assistance or extra.
This forecast is particularly present in the middle of the restoration.
“While many realize that we can work at home (…), it could well be a lot of vacant spaces in commercial buildings over the next few months. Who knows exactly what it will look like the world is post-pandemic? ”
The prime minister Justin Trudeau
A poll conducted by the agency at the end of last week with these owners added that 20 % of them are afraid of being expelled from their local.
It is the Company canadian mortgage and housing corporation, which will handle requests for the federal program for owners of commercial spaces from next week.
It was one of two ads that the liberals have made on Wednesday about assistance programs that provide 151,7 billion dollars in direct subsidies and tens of billions more in loans and financing.
The digit federal published Wednesday show that two of the most important programs have seen an increase of applicants and payments. Providing canadian emergency and now has over 8.1 million providers, who have collectively received more than 38.4 billion $ – the initial budget was $ 35 billion. For its part, the wage subsidy Program of emergency has now approved 215 661 requests, providing $ 5.7 billion for assistance to businesses to cover 75 % of the wages of nearly 2.8 million workers. The programme has a budget of 73 billion $.
Earlier Wednesday, the government unveiled details of a program of interim financing for large companies. Under this emergency Credit to large employers (CUGE), the government may take a stake in the company. Loans will begin at $ 60 million, with no upper limit, and are intended for companies whose revenues are at least $300 million.
The federal minister of Finance, Bill Morneau said Wednesday that the conditions will be the same for any business seeking assistance in the framework of the programme, open for applications now. He said that the conditions are designed to ensure that businesses receive bridge loans, not bailouts, to overcome the economic disruption related to the COVID-19.
“We will ask the listed companies to issue vouchers that will give us the option to acquire shares or receive the equivalent (…) for a total of 15 % of the amount received. If the companies are not listed on a stock exchange, they will pay a fee comparable,” said the minister, who hopes that the State’s coffers will benefit from the eventual economic recovery. “The idea behind the mandate is to ensure that, if the company does well, Canadians and canadian taxpayers, share in this advantage,” he said. “The canadian government will not be required to take this value in action, it can be taken in cash.”
The liberals have already explained that the loans would be granted on commercial terms; the companies must have already hit, without success, to the doors of the banks or the market. The beneficiary companies should also accept limits on their executive compensation, the payment of dividends and share repurchases, and show that they contribute to the objective of the liberals to reduce greenhouse gas emissions.
Mr. Morneau said that the program is intended to enable large companies to continue their operations and keep their employees on their payroll, but also to avoid the bankruptcy of companies otherwise viable, to the extent possible.
The interest rate will be fixed at 5 % in the first year, then 8 % the second year and to 2% per year thereafter. The terms and conditions of the program, published online, indicate that companies will be able to repay the interest on the loan through in-kind contributions, usually goods or services, during the first two years of the loan.
“What we’ve done here is we ensure that we provide a low interest rate the first year, but will be appropriate for employers who want to turn first to their own sources of funding,” said Mr. Morneau at a press conference Wednesday morning in Toronto.
The companies that prevail this CUGE will also continue to use the wage subsidy which provides 75 % of the payroll until the end of August, said the minister.