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 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.
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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Coronavirus outbreak: Trudeau offers ‘bridge loans’ to large companies struggling during COVID-19 downturn
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.
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.”
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.
“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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Coronavirus: Trudeau says $19 billion for restarting economy to begin flowing to provinces
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.
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.
VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.
The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.
The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.
The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.
The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.
MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.
In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.
“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.
“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”
In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.
“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.
The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.
“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”
The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.
The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.
A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.
This report by The Canadian Press was first published Nov. 9, 2024.
The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.
Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.
Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.
Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.
“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.
“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”
Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.
“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.
Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.
“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”
But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.
Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.
“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.
Paddon said the initiative is a great idea, but she would like to have known more about it.
The legion also sells a larger collection of items at poppystore.ca.
This report by The Canadian Press was first published Nov. 9, 2024.
