Canada

Trudeau's daily coronavirus update: Loans for big businesses (Full transcript)

In his daily briefing, the PM announced a new emergency financing program for large businesses, insisting 'this is bridge financing, not a blank cheque'

Prime Minister Justin Trudeau holds a daily update on the coronavirus crisis each day in front of his home in Ottawa. Here are his remarks for May 11, 2020.

[speaking in French] I’d like to begin this morning by saying that this is the National Nursing Week. Nurses are at the very heart of our health care system. Every day they’re doing an outstanding job to keep us all healthy. And the way they support people during this pandemic reflects their compassion, their resilience and their dedication. To all the nurses out there, thank you for everything you’re doing. Not just these days, but every single day. [French translation ends]

Since the beginning our response to the Covid-19 pandemic has been driven by three fundamental objectives. The first is to keep Canadians safe and ensure we take every possible step to protect our most vulnerable citizens. This work continues daily, guided by our best doctors and medical experts, and it drives every move we make.

The second is to protect individuals, workers and families from the worst financial impacts of this pandemic so you can put food on the table and cover your bills while staying safe. We’re doing that with programs such as the Canada Emergency Response Benefit, the increase in the Canada Child Benefit this month and the enhanced GST tax credit, among other measures.

And thirdly, we are helping Canadian businesses through this extraordinary time, including for-profit, not-for-profit and charitable enterprises to ensure that workers across Canada can keep their jobs so we can come roaring back after this difficult time is behind us.

[speaking in French] Today, I am announcing the next phase of our support measures for businesses which collectively employ millions of Canadians and who have suffered unprecedented losses because of the pandemic.

We will be extending the business credit program that was initially created so that small businesses can remain financially sound by including mid-sized businesses that need more capital. Export Development Canada and the Business Development Canada will be working with private sector lenders to increase access to capital by tens of millions of dollars for Canadian companies in all industry sectors and all regions of the country.

We will also be introducing the large employer emergency financing facility to help large employees, large companies that cannot receive funding through other means to get through this crisis. But I want to be clear, this is bridge financing, not a blank cheque. We are providing support to these large employers in order to protect millions of jobs right across the country.

Our approach is based on a number of fundamental principles. First, we want to avoid seeing businesses go under. The goal of the business credit program is not to fund non-viable businesses or allow them to restructure. It is not our intention either to provide low interest loans to large companies that don’t need them.

Second, we want to be fair. This funding will be accessible to all sectors and to all provinces and territories. And third, we will protect people’s jobs. That is the most important thing. Businesses that receive this assistance will have to make certain commitments and keep them. For example, maintain jobs and investments, abide by collective agreements and their obligations with respect to pensions, and make specific commitments with respect to the environment.

More specifically, there will be strict limits on dividends, share buybacks and executive pay. In order to counter tax evasion and tax avoidance, businesses will have to disclose their financial structure when they apply for this funding. [French translation ends]

Today I am announcing the next phase of our support for enterprises that collectively employ millions of Canadians are experiencing unprecedented losses due to the COVID-19 pandemic. We are expanding the business credit availability program put in place to keep small businesses solvent to mid-sized companies with a greater need for capital. Export Development Canada and the Business Development Bank of Canada will work with private sector lenders to free up access to capital in the tens of millions for Canadian companies in every industry and in all regions across Canada.

At the same time, we are establishing a large employer emergency financing facility to provide bridge financing for our largest employers if they are unable to obtain financing through other means. But let me be clear, these are bridge loans, not bail outs. Just as we are finding ways to support 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 provide across Canada.

In providing this support, we’ll be guided by several basic principles. The first is to avoid bankruptcies. Our purpose is to keep large Canadian companies on their feet and protect the millions of jobs they provide. The goal here is not to fix preexisting insolvencies or restructurings. Nor is it to provide low cost lending to companies that don’t need it.

Second, we will be fair. Financing will be accessible to every industry sector in a way that is consistent in every province and territory right across Canada. And critically, we will protect workers and hold companies accountable. This is fundamental. Any company that receives this support will be expected to make and keep certain commitments. Those include maintaining jobs and investment, respecting collective agreements and pension obligations, and environmental and climate commitments.

In particular, there will be strict limits on dividends, share buybacks and executive compensation. 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.

With this program, we’re taking a bold step. Ideally, private sector lenders are adequate for the needs of large businesses. But in an extraordinary situation, when that isn’t always enough, we must act to prevent massive harm to Canadian workers and families and the Canadian economy.

We will not allow millions of people to lose their livelihoods because of unprecedented events beyond their control.

Finally, as we continue to work on plans to reopen, I want to say this: please let caution and medical advice be your guides. We are all anxious to see life go back to something that looks more like normal. But we’re not out of the woods yet and we cannot squander the sacrifices we’ve made over the past two months. So when in doubt, if you can stay home, avoid gatherings, wash your hands frequently and thoroughly, and maintain two meters distance from everyone else. This is how we will keep fellow Canadians who can’t stay home and those working on the frontlines safe.

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