A small group of Canadian trucking companies got a piece of good news
A small group of Canadian trucking companies got a piece of good news the federal government announced on Monday it would become a lender of last resort for the country’s biggest firms.
Prime Minister Justin Trudeau characterized the Large Employer Emergency Financing Facility as “bridge financing, not a blank check.” It’s intended to keep Canada’s largest companies in business during the COVID-19 pandemic in the event they exhaust their access to credit.
Companies generating C$300 million (about US$214 million) in annual revenue will be eligible for the program. It’s unclear how many Canadian carriers meet that requirement since Canada has just three publicly traded trucking companies. But estimates from those who follow the industry closely suggest the number is around 20.
“It’s good to see it there for companies that run up against their covenants through no fault of their own,” Rob Penner, CEO of Bison Transport, told FreightWaves. “But it concerns me if it ends up prolonging the agony of companies that were already failing pre-COVID-19.”
The lending facility adds to a barrage of measures from the Canadian government in response to the economic fallout from COVID-19. It also follows the more targeted approach of measures such as the 75% wage subsidy.
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