Canada recommends masks, says emergency loans have no cap but many limits

By Steve Scherer

OTTAWA (Reuters) – There will be no cap on the size of Canada’s emergency loans to large companies harmed by the coronavirus pandemic but there will be multiple restrictions, the government said on Wednesday, as it recommended wearing masks in public for the first time.

“We are not offering companies a bailout,” Prime Minister Justin Trudeau said of the loan facility during his daily news conference. The aim is to help them “weather this storm”, Trudeau said.

Also on Wednesday, medical officials urged Canadians to wear non-medical masks.

“In situations where you cannot physically distance to 2 meters (6 ft), people are encouraged to wear masks,” said Trudeau, who later donned one when he entered parliament.

For a second consecutive day, Canada’s coronavirus deaths rose less than 1% from the previous day, official data showed.

The so-called Large Employer Emergency Financing Facility https://www.cdev.gc.ca/leeff-factsheet (LEEFF) is accepting applications as of Wednesday from all companies, except those in finance, with an annual revenue of C$300 million ($216 million) or more that are seeking financing of at least C$60 million.

Among the LEEFF restrictions is that publicly traded companies issue warrants that provide the option to purchase equity or receive cash equivalents, Finance Minister Bill Morneau told reporters, to allow the state to “share in any upside borrowers see in the recovery to come.”

Public health limitations aimed at slowing the pandemic have clobbered companies in Canada and worldwide.

Air Canada said last week it was cutting its workforce by up to 60%. Canada’s oil industry is facing its worst crisis in 40 years.

A spokeswoman for Canada’s No. 2 oil producer Suncor Energy said the company had managed its business “so as not to have to rely on these sorts of programs at this time.”

(Reporting by Steve Scherer; Editing by Will Dunham and Marguerita Choy)