Photo: Andrew Harnik Associated Press
The Fund has added a six-month moratorium on capital payments-interest on loans. In total, 1300 3100 business partners of the institution have accepted the offer of a deferral.
As a direct result of the pandemic, it is 1.4 billion and not the billion intended that the Fonds de solidarité FTQ has invested in the quebec economy during its fiscal year. Also, more than 40% of its partner companies have taken advantage of the six-month deferral of payments on the loans.
The Fund FTQ took stock Thursday of its support for québec companies in this health crisis. “This is going relatively well. Since march, we are in constant communication with our partner companies and we established a game plan with them to deploy quickly to our aid plan, ” says Janie béïque number, first vice-president, investments of the solidarity Fund.
These $ 400 million dollars of additional investments made during the fiscal year ended may 31, has added a six-month moratorium on principal payments-interest on loans. In total, 1300 3100 business partners of the institution have accepted the offer of a deferral.
A variety of needs
“We offer primarily of the capital stock and loans. In this last segment, 75 % of companies who receive a loan have taken advantage of the period “, said Ms. Beique.
With respect to the needs, ” they vary from one company to another, from one sector to the other. This can range from the increase in the working capital fund to the capital injection is aimed at accelerating the development of a product, to increase research, repositioning an assembly line, to meet a demand or to support the resumption of activities “, said the first vice-president.
If economic activity picks up with the déconfinement, it will take some time before it found its level prépandémie. “It is necessary to speak of several quarters. Stop the economy almost completely is not without creating a major shock, ” added Gaétan Morin.
The president and chief executive officer of the Fund is talking about a long recovery, a return of economic activity to its level prépandémie not before the end of 2021, possibly in 2022.
Development of a drug entering treatment, the discovery of a vaccine… The key is trust.
— Gaétan Morin
The institution retains two basic scenarios. A recovery in the U or W if there is a second wave. “We have quickly forgotten a scenario in V for think rather of a U, let’s say, more expanded. And we discard the period post-pandemic in L. “And if there is a second wave, it will probably be less severe since the level of adaptation of the companies,” he said.
Nevertheless, if the crisis of 2008 and the Great Recession that followed have challenged the Fund in its primary mission of investor patient, they were caused by a freezing of the financial sector-producing a fundraising activity fails.
“It is a question today of a global stabilization of an economy. It is much more profound. This requires capital and support to ensure a resumption of activities, so that Quebecers can resume work as quickly as possible. But this will sort itself out with the return of confidence. Development of a drug entering treatment, the discovery of a vaccine… The key is trust. “
The aerospace, industry, recreation and tourism, restoration, cultural industry… This was difficult for several. Some companies will have to close their doors. But opportunities will also emerge.
For the workers affected, who, through training, will be able to return to the labour market in jobs offering higher wages, ” says Gaétan Morin. “It is necessary to transform these crises into opportunities. We, in Quebec, a window in front of us. “
The solidarity Fund will release financial results for its fiscal year 2019-2020 June 30. Too early, therefore, to speak of the impact of the fall in stock prices that has accompanied the expansion of the pandemic.
“Our portfolio consists of a part of major financial markets, and a component related to our core business. In the first case, our vision is long-term. We do not speculate. In the second, we are patient investors. Let us not forget that the Fund has been created in a context of crisis. We do not want to, but we do not fear the crisis, ” recalls Gaétan Morin.