The Large Employer Emergency Financing Facility (LEEFF) is another part of Canada's COVID-19 Economic Response Plan. Details of LEEFF were announced on May 20, 2020, the same time the application process opened.

LEEFF offers bridge financing to large employers to cover operational needs. It is intended to support large employers whose needs are not being met by conventional credit options. While one of the intended purposes is to avoid bankruptcies, it is not to be used to resolve insolvencies or restructure firms.

LEEFF is administered by Canada Enterprise Emergency Funding Corporation (CEEFC), a newly formed subsidiary of Canada Development Investment Corporation (CDEV), in cooperation with Innovation, Science and Economic Development Canada (ISED) and the Department of Finance.

Eligibility Conditions

Companies must meet the following conditions to be eligible for LEEFF:

  • annual revenues of $300M or greater (generally);
  • significant operations in Canada or significant workforce in Canada;
  • require a minimum loan of $60M for cash flow needs over the next 12 months;
  • have cooperation of applicant's private sector lenders; and
  • operate in any sector, except finance.

Assessment will be made of a company's employment, tax and economic activity in Canada, as well as international organizational structure. Companies involved in active insolvency, who have been convicted of tax evasion, or who can otherwise manage the crisis will not be eligible.

Although the program is geared towards for-profit enterprises, certain non-profits could be eligible, with airports being specifically mentioned in the LEEFF factsheet.

Loan Terms and Conditions

The loan terms and conditions are commercial in nature. The loan is offered by means of secured and unsecured loan facilities.

Secured loan facility:

  • 80% of the aggregate loan amount.
  • Interest rate and term based on borrower's existing secured debt.

Unsecured loan facility:

  • 20% of the aggregate loan amount.
  • Interest rate starts at 5% for the first year, increases to 8% for the second year, and increases 2% per annum each year thereafter.
  • 5-year term.

There is no upper cap on loans, which will be advanced in tranches over 12 months. There is no penalty for prepayment. Companies accessing the LEEFF will be subject to certain restrictions, including:

  • Dividends, capital distributions, and share repurchases are prohibited for the duration of the loan; and
  • Executive compensation is restricted (Details as to restrictions on executive compensation have not yet been made public).

Companies accessing the LEEFF will also be required to make certain commitments, including:

  • minimizing job loss and sustaining domestic business activities;
  • publishing an annual climate-related financial disclosure report consistent with the Financial Stability Board's Task Force on Climate-related Financial Disclosure. The report will highlight how corporate governance, strategies, policies and practices will help manage climate-related risks and opportunities; and contribute to achieving Canada's commitments under the Paris Agreement and goal of net zero by 2050; and
  • continuing to perform obligations under existing pension plans and collective bargaining agreements.

In order to ensure LEEFF operates as a bridge, rather than a bailout, companies must provide CEEFC with compensation beyond the security interest on the secured facility and interest on the loan. Public company borrowers (or private subsidiaries thereof) must issue warrants with an option to purchase common shares totaling 15% of the principal amount of the loan, or provide equivalent cash consideration. Warrants may be settled prior to being exercised or sold to third parties after loan repayment. Companies not publically traded will provide compensation at a level commensurate to the value of warrants for public companies. This structure is intended to ensure Canadians share in any upside of a company's recovery.

Finally, the CEEFC reserves the right to appoint an observer to the board of the borrower, presumably for the duration of the loan.

Application Process

Applications form are available here and need to be sent to:

Information required in the form includes: Name of business; headquarters address; description of business; business annual revenues (FY2019 results); number of employees; stock exchange symbol (if publicly listed); name of contact; title of contact; email address of contact (must be from the enterprise's corporate domain); and phone number of contact.

Upon receipt of the initial email, a CEEFC representative will send applicants a non-disclosure agreement, an application form, and further instructions. At this stage, applicants will be contacted by representatives of both CEEFC and ISED.


As noted, the application process is now open. The government has stated, in line with other COVID-19 Economic Response Plan programs, their intention is to get money into the hands of applicants as quickly as possible.


LEEFF presents encouraging relief for qualifying companies; however, given the restrictions and requirements associated with the program, LEEFF may not be suitable for all entities. To the extent that you or any of your clients have any questions regarding LEEFF or require assistance in applying for LEEFF, the Bennett Jones Financial Services, Employment Services and Climate Change groups would be pleased to assist you as you look to identify and implement strategies in connection with the COVID-19 pandemic.

Originally published May 22, 2020.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.