Government Announces Launch Date for CECRA and Launches LEEFF
Today, the Federal Government announced the launch date of the Canada Emergency Commercial Rental Assistance Program (CECRA) and the launch of the application process for the Large Employer Emergency Financing Facility (LEEFF).
Canada Emergency Commercial Rent Assistance Program
Prime Minister Trudeau announced that applications for the CECRA will launch starting on May 25, 2020.
The program, delivered in partnership with provincial and territorial governments will provide forgivable loans to landlords of 50% of monthly rent, with the expectation that landlords and tenants will each contribute 25%. The program applies to April, May and June rent.
The application will be available through the Canadian Mortgage and Housing Corporation.
Large Employer Emergency Financing Facility
The LEEFF will provide bridge financing to large Canadian employers to help preserve their employees, operations and investments. The program will provide loans of $60 million and above based on the applicant’s cash flow needs for the next 12 months. This program will be delivered by the Canada Enterprise Emergency Funding Corporation. See application information here.
Eligibility
Large for-profit enterprises in all sectors (except the financial sector) and certain not-for-profit enterprises, such as airports, are eligible. Additional criteria as follows:
- Have a significant impact on Canada’s economy, as demonstrated by: (i) Having significant operations in Canada; or (ii) Supporting a significant workforce in Canada.
- Can demonstrate approximately $300 million or more in annual revenues.
Companies must commit to minimizing the loss of employment, sustaining their domestic business activities, and must demonstrate that LEEFF funding is part of their plan to return to financial stability. The program will be open while the current economic situation persists.
Terms & Conditions
- Principal Amount. The loan will be provided through two facilities: an unsecured facility equal to 80% of the aggregate loan and a secured facility equal to 20% of the aggregate loan amount.
- Interest Rate. For the unsecured facility, cumulative will be 5% per annum payable quarterly in arrears. The interest rate will increase to 8% per annum on the one-year anniversary and will increase by a further 2% per annum each year thereafter. Interest may be paid in-kind for the first two years of the loan. For the secured facility, the interest rate will be based on the interest rate of the borrower’s existing secured debt.
- Term. The duration of the unsecured facility will be five years. The duration of the secured loan facility will match that of the borrower’s existing secured debt. The borrower may prepay the loan at any time without penalty.
- The borrower will be subject to operating requirements while the loan is outstanding including (i) prohibitions on dividends, capital distributions and share repurchases, and (ii) executive compensation restrictions.
- The borrower will be subject to affirmative covenants while the loan is outstanding including (i) performance of obligations under existing pension plans; (ii) performance of material obligations under applicable collective bargaining agreements; and (iii) publishing an annual climate‑related financial disclosure report, highlighting corporate governance, and strategies and policies that will contribute to achieving Canada’s commitments under the Paris Agreement and goal of net zero by 2050.
Federal Engagement
Consult the Sussex COVID-19 Guide for information on supports made available across the Federal, Provincial and Municipal Governments.
As the details of the programs announced today become available, let Sussex help connect you with the right people in government to help your organization get through these extraordinary times.
Please reach out to your Sussex representative directly or to a member of the Federal Government Relations Team.
