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Loan program for Canada’s biggest companies ‘ineffective,’ experts say – Global News

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More than four months after the federal government announced its program offering emergency loans to the country’s largest businesses amid the novel coronavirus pandemic, none of the applications have been approved and no money has been allocated.

The Large Employer Emergency Financing Facility (LEEFF) was announced by the Liberals on May 11, as part of the federal government’s emergency economic response to the COVID-19 outbreak.

The loans, starting at $60 million, were to be made available to companies that employ large numbers of Canadians and have at least $300 million in annual revenue, to provide short-term assistance to help them weather the pandemic.

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Canada’s biggest companies getting new loans, financing to weather COVID-19

On Wednesday, the ministry of finance confirmed it has received “more than a dozen” applications to the LEEFF so far.

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But none have been approved.

“The Canada Enterprise Emergency Funding Corporation (CEEFC), a subsidiary of the Canada Development Investment Corporation (CDEV) formed to administer the LEEFF, is evaluating these applications to ensure they are in the best interests of Canadian taxpayers, while also securing the cooperation of existing creditors,” the email reads.

Global News reached out to more than 30 large companies in Canada to determine which had applied to the LEEFF.

Only one — Porter Airlines — confirmed it had submitted an application, and a handful of others said they were considering the LEEFF as an option.

Unifor national president Jerry Dias said the LEEFF program has been “ineffective,” adding that it was introduced too late into the pandemic.

A lot of the carnage had already been done,” Dias said. “Most employers had already laid off (employees) and made major, major cutbacks to their operations.”






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What’s more, with LEEFF offering interest loans of five per cent in the first year, and eight per cent the following year, Dias said most large companies “have opportunities to grab capital elsewhere through commercial means.

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“And so that’s what they’ve done.”

Benjamin Reitzes, director of Canadian rates and macro strategist at BMO Capital Markets, echoed Dias’s remarks, saying the pricing is “just not favourable enough to attract anyone to use the fund at this point,” and that it is really a “last resort for companies.”

He said the pricing is “quite punitive,” and comes with extra rules and conditions that could be “constricting” for companies.

“If you have any access at all to the capital markets, the rates charged are materially better,” he said. 

Dias said the government should instead focus its efforts on improving the Canadian Emergency Wage Subsidy program (CEWS).

“They should eliminate the problems with that program,” he said. “I think you’ll find that that is something that the employers will jump all over and frankly, it’ll make the LEEFF program irrelevant.”

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As of Monday, the Canada Emergency Wage Subsidy (CEWS) program had received a total of 1,094,330 applications and had paid out $35.3B in subsidies.

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However, Reitzes said it’s “certainly possible” that the LEEFF program was created just for show.

“The primary intent may have been just to drive a little bit more confidence and just to show that the money is there, the government is willing to backstop firms if necessary, but only in the most extreme cases,” he said.

He said that was enough to provide a “sufficient amount of confidence to markets that they are now functioning or able or willing to function and lend money a little bit more freely” than they were in April.






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In a statement, a spokesperson from the Minister of Innovation, Science and Industry said it is continuing to analyze “the specific pain points that COVID-19 is causing for all industrial sectors as they grapple with unprecedented financial difficulties during this crisis.”

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Airlines industry

Daniel-Robert Gooch, president of the Canadian Airports Council, which represents 54 airports around the country, said the pandemic has had “devastating” effects on the airline industry.

He said the council’s forecasts project airports are going to lose $4.5 billion in 2020 and 2021.

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“Just to keep the doors open, they’re anticipating having to take on $2.8 billion just for two years of additional debt to get through this crisis,” he said. “So they’re borrowing their way through the crisis.”

However, Gooch said LEEFF is “not really something that’s going to help out our airports,” adding that only four airports — Pearson International Airport, Vancouver International Airport, Montréal-Pierre Elliott Trudeau International Airport and Calgary International Airport — are eligible for the program.

Gooch also said airports could access better terms from private lenders.

“It’s like being in a fully functioning lifeboat,” he said. “They’re not going to, you know, get into a leaky inflatable.”

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None of Canada’s largest airport authorities have applied for LEEFF.

Both the Greater Toronto Airports Authority and Aéroports de Montréal confirmed they had not submitted applications.

The Vancouver and Calgary Airport Authorities said they had not applied either, citing access to credit at lower rates elsewhere.






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Global News also reached out to Canada’s largest airlines to determine if any had applied.

Porter Airlines said it has submitted an application “in order to better understand the terms available for loans under the program.”

However, the company said the talks are “currently inactive,” as it makes a “broader assessment” of its capital requirements.

“Discussions have not progressed to the point where potential approvals would be indicated,” a company spokesperson said in an email.

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In the company’s latest earnings call last week, Air Transat president Jean-Marc Eustache voiced his frustrations with the federal government’s response to the COVID-19 pandemic, saying he felt the airline industry has been ignored.

Eustache said the company is in “advanced discussions” to secure more financing, and he called on Ottawa to step in and offer targeted support to the airline and tourism sectors.

A spokesperson for Air Transat would not comment further on potential sources of financing, but did say that it was exploring LEEFF as an option.

Air Canada, Sunwing and WestJet did not reply to requests for comment on this story.

Automotive and transportation sector

Asked if they had applied to the LEEFF program, the majority of the largest automotive companies in Canada said they had not.

Bombardier said that while it is looking at “various options,” it is not considering LEEFF “for the time being.”

In an email, a spokesperson at General Motors Canada said the company did not seek funding through the program.

Honda said it has “no plans” to apply to LEEFF. Similarly, Toyota said it is “not a program we have considered.”

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However, in an email, a spokesperson at New Flyer said it is continuing to explore all available programs “for their potential applicability to NFI and our employees,”

“But we are not in a position to comment on LEEFF specifically,” the email reads.






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Fiat Chrysler Automobiles declined to provide comment for this story.

Requests were also sent to Ford, Magna International Inc. and Nova Bus Inc., but were not returned by time of publication.

Oil and gas

Speaking about the program in May, then-finance minister Bill Morneau said the LEEFF program “will be very important for companies in the energy sector.”

But a number of large Canadian companies in the oil and gas sector confirmed they have not applied to the LEEFF, including Canadian Natural Resources, CNOOC Petroleum North America ULC, Crescent Point Energy, Enbridge Inc., Imperial Oil, Shell Canada and Suncor Energy.

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In an email, Cenovus Energy said it does “not provide details on our financing activities,” but that the company is in a “good financial position.”

Athabasca Oil, Husky Energy, Ovintiv and TC Energy did not reply to requests for comment.

Retail

Mountain Equipment Co-op said it “did explore the LEEFF program,” but determined it was “not a solution” for the company because it “could not meet all the pre-conditions.”

“Nor could the organization support the financial changes associated with the program,” a company spokesperson said in a statement.






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Global News also reached out to e-commerce company Shopify to determine if it had submitted an LEEFF application, but the request went unanswered.

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© 2020 Global News, a division of Corus Entertainment Inc.

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1 dead, 2 critically injured after car crash in Montreal

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Montreal

Three people are in hospital with critical injuries after their vehicle crashed into a tree. Police believe they might be connected to two drive-by shootings that took place early Thursday morning.

2 drive-by shootings also took place overnight

an SPVM car near a taped-off crime scene
Montreal police are investigating a car crash possibly linked to two drive-by shootings. (Mathieu Wagner/Radio-Canada)

Urgences-santé say one person died and two others were critically injured after their vehicle hit a tree in the Rosemont neighbourhood.

Montreal police believe the crash may be linked to two drive-by shootings early Thursday morning.

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The first happened around 5 a.m. on Pie-IX Boulevard. Police say a car was shot at repeatedly and the driver, a 41-year-old man, was injured in the upper body. He was transported to hospital, but his life is not in danger, say police.

Shortly afterward, shots were reported in the Plateau Mont-Royal borough, near the intersection of Saint-Joseph Boulevard and Henri-Julien Avenue. No one was injured.

Police say they are investigating to determine if there is a connection between the collision and the shootings. Montreal police spokesperson Jean-Pierre Brabant says it’s possible those in the vehicle were involved in the shootings.

The province’s independent police watchdog is now involved.

with files from Chloë Ranaldi

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Pakistan airline crew sought asylum in Canada: spokesperson – CTV News

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Typically, Pakistan International Airlines (PIA) flight attendants who arrive in Toronto stay at a hotel overnight, meet back up with their crew the next day and then fly to their next destination.

But increasingly often, PIA attendants aren’t showing up, the airline says. According to PIA, at least eight flight attendants disappeared over the last year and a half.

They have abandoned their jobs and are believed to have sought asylum in Canada, a spokesperson for the government-owned airline says.

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Increased occurrences

Abdullah Hafeez Khan said at least eight flight attendants “have gone missing” after flying to Pearson International Airport in Toronto. He said these incidents have been happening over the last 10 years, but are now occurring more frequently.

“Since probably October of 2022, the number of the people that have opted asylum has increased tremendously,” Khan said in a video interview with CTVNews.ca from Karachi, Pakistan, where the airline is based.

“None of those crew members that disappeared in the last one-and-a-half years have come back. So they were granted asylum for one way or the other, and that probably has encouraged others to do so.”

The missing employees were fired immediately and lost their company benefits, Khan said.

Why did they flee?

Khan said he could only speculate as to why the flight attendants would flee.

The Canadian government underscored the volatile situation in Pakistan, warning in a travel advisory of a “high threat of terrorism,” along with threats of civil unrest, sectarian violence and kidnapping.

“The security situation is fragile and unpredictable,” the Canadian travel advisory reads. “Incidents are typically attributed to extremism, ethnic divisions, sectarian strife, regional political disputes and the situation in neighbouring Afghanistan.”

It added that many deaths and injuries have occurred from bombings, shootings and other terrorist attacks at a wide range of targets.

Since Khan isn’t in contact with any of the missing employees, he says, he assumes they decided to seek asylum in Canada for economic and social reasons.

“So I naturally assumed that all of them have been given asylum because I don’t think they would be living there illegally,” he said, adding they may already have family connections in Canada who can support them.

In this June 8, 2013, photo, a Pakistan International Airlines plane moments before take off from the Benazir Bhutto airport in Islamabad, Pakistan. (AP Photo/Anjum Naveed)

‘PR crisis’

Khan called the flight attendants’ disappearances a “PR crisis” for PIA that is “bad” for business amid a crew shortage.

The airline is in talks with the Canada Border Services Agency (CBSA) and Pakistani law enforcement agencies to potentially create a “legal safeguard” to curtail flight crew from seeking asylum, he said.

When asked about the PIA flight attendants’ disappearances, Erin Kerbel, spokesperson for Immigration, Refugees and Citizenship Canada, said the department couldn’t comment on specific cases due to privacy legislation.

In response to questions about PIA’s claim that discussions are underway about the issue, a spokesperson for the CBSA said it could not confirm any information.

“The Canada Border Services Agency does not provide comment or details on specific individuals, including any discussions that would take place with airline companies, as an individual’s border and immigration information is considered private and protected by the Privacy Act,” Maria Ladouceur said in an email to CTVNews.ca.

Since the crew members’ disappearances, Khan said, the airline has “done numerous things to curtail that.”

For instance, the airline is only staffing Toronto-bound flights with crew members who have “established linkages” in Pakistan, such as children, spouses or parents, as well as those who have worked in the organization for more than 15 years.

The airline avoids sending to Toronto those who are single or don’t have established family ties in Pakistan, he said.

Khan said he and the airline are no longer in contact with the flight attendants because, they discovered, they usually change their phone numbers soon after disappearing in Toronto.

Who disappeared?

The PIA flight attendants who vanished in Canada are seasoned pros in their late 30s or 40s, some of whom have worked for the airline for as long as two decades, Khan said.

“There was never any sign from them that they would seek something like that,” he said. “So that is something that is bothering us in the matter because working with people who have been working with you for a long time and then something happens like this is pretty unexpected.”

In one of the latest cases in February, the crew members were waiting to take the bus back to the airport from the hotel in Toronto and one of the flight attendants didn’t show up, Khan said.

The airline was unable to reach the flight attendant on her cellphone or hotel landline so, Khan says, they asked hotel management to check if she was OK.

“When the crew went there, she left her uniform there with a note saying, ‘Thank you PIA,'” Khan said, which he interpreted as a genuine sentiment of gratitude for her more than 15 years of service with PIA rather than a taunt.

Khan said the crew members who disappeared were “family values people” who had good careers in Pakistan.

Asylum policies

Individuals can make a refugee claim in Canada at a port of entry upon arrival or online if they are already in Canada, according to the Canadian government’s website.

Canadian immigration or border officials will determine if the person is eligible for a hearing before the Immigration and Refugee Board. All claimants must undergo health and security screenings, the government says.

If eligible to make a claim in Canada, refugee claimants can access social assistance, education, health services, emergency housing and legal aid pending a decision on their claim. Most can apply for a work permit after a medical examination.

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Alberta's population surges by record-setting 202,000 people: Here's where they all came from – CBC.ca

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Alberta smashed population-growth records in the past year, mainly due to people moving to the province from across Canada and around the world.

The province’s population surged to just over 4.8 million as of Jan. 1, according to new estimates released Wednesday by Statistics Canada.

That’s an increase of 202,324 residents compared with a year earlier, which marks — by far — the largest annual increase on record.

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Alberta also broke a national record in 2023 for interprovincial migration, with a net gain of 55,107 people.

“This was the largest gain in interprovincial migration nationally since comparable data became available in 1972,” Statistics Canada said in a release.


Most of the interprovincial migrants came from Ontario and British Columbia.

Statistics Canada estimates that 38,236 Ontarians moved to Alberta last year, versus 14,860 Albertans who moved to Ontario, for a net gain of 23,376 people.

Similarly, an estimated 37,650 British Columbians moved to Alberta, compared to 22,400 Albertans who moved to B.C., for a net gain of 15,250.


All told, interprovincial migration accounted for 27 per cent of Alberta’s population growth over the past year.

That put it just ahead of permanent immigration, which accounted for 26 per cent, and well ahead of natural population increase (more births than deaths), which accounted for eight per cent.

The largest component, however, was temporary international migration.

Non-permanent residents from other countries accounted for 39 per cent of the province’s population growth in the past year, reflecting a national trend.


Canada’s population reached 40,769,890 on Jan. 1, according to Statistics Canada estimates, which is up 3.2 per cent from a year ago.

“Most of Canada’s 3.2-per-cent population growth rate stemmed from temporary immigration in 2023,” Statistics Canada noted.

“Without temporary immigration, that is, relying solely on permanent immigration and natural increase (births minus deaths), Canada’s population growth would have been almost three times less (1.2 per cent).”

Alberta’s population, meanwhile, grew by 4.4 per cent year-over-year.

Alberta now represents 11.8 per cent of the country’s population, its largest proportion on record. 

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