The CFL is no longer looking to the Business Development Bank of Canada for financial assistance during the novel coronavirus pandemic.
The CFL had been pointed to the BDC by the federal government. But two sources with knowledge of the situation say that’s no longer a funding option after the crown corporation and league couldn’t agree on loan terms.
The sources spoke on the condition of anonymity as neither the CFL nor the government have publicly discussed the league’s quest for financial assistance.
The decision is somewhat surprising given CFL commissioner Randy Ambrosie has stated if the league is to have a shortened season, it would begin no earlier than September. Ambrosie has also said a cancelled 2020 campaign is also possible.
But the latest development doesn’t mean the CFL is out of funding options.
Last week when asked in the House of Commons if the government was going to assist the league, Heritage Minister Steven Guilbeault said, “We encourage organizations in need of assistance to talk to their financial institution and to see what options are available to them.”
One such option might be the Business Credit Availability Program (BCAP). It offers federal guarantees to loans given out by private banking institutions, but these loans can only be used for operating expenses and must be required as a result of the COVID-19 pandemic.
The league would reach out to its financial institution and if it met the BCAP criteria, a loan would be guaranteed (up to 80 per cent) by Export Development Canada (EDC), another crown corporation.
However, the league has already examined this option and questions remain about the viability of the route.
The CFL will need financial assistance for a season to take place. Ambrosie has stated the league collectively lost upwards of $20 million last season and its nine teams have had little to no opportunity to generate revenue due to the pandemic.
Earlier this month, the CFL sent Ottawa a revised financial request that a source says was for about $44 million.
That’s substantially less than the CFL’s opening request. In April, the league sent Ottawa a proposal asking for up to $150 million in assistance in the event of a cancelled season.
The CFL’s revised request was being considered by the BDC. It’s a federal agency but also a crown corporation, meaning the federal government could not mandate it to provide financial assistance to the CFL.
The BDC is essentially a bank with lending criteria and the CFL, given its financial state, would’ve likely had trouble qualifying. To secure financial assistance — essentially a loan — the league would’ve likely required the Quebec, Ontario, Manitoba, Saskatchewan, Alberta and B.C. governments to provide some kind of guarantee on any aid, something Ottawa was said to have been trying to help facilitate.
Export Development Canada is also a crown corporation that helps Canadian companies. It has served as the country’s export credit agency since 1944 and helps businesses get money and/or credit by working with financial institution partners.
EDC is financially self-sufficient and operates much like a commercial institution. It collects interest on loans and premiums on insurance products while selling bonds and raising funds in global capital markets.
In March, Ottawa temporarily expanded EDC’s mandate to help non-exporting Canadian companies requiring assistance due to the COVID-19 pandemic.
On its website, EDC states it has facilitated over $1.5 trillion in exports and foreign investment by Canadian companies.
It adds it has also helped nearly 17,000 Canadian companies “expand their business into international markets. The majority (86 per cent) were small- to medium-sized enterprises and they facilitated more than $102 billion in global business through EDC’s expert knowledge and financial products.”
The league and CFL Players’ Association continue to negotiate amendments to their collective bargaining agreement in an effort to hold a 2020 season.
The league had initially set a deadline of last Friday to agree on health and safety protocols, secure federal funding and renegotiate a CBA past its current 2021 expiry date. Last week, the CFL extended the deadline to this week but never provided a drop-dead date.
The CFL and its players have been eagerly awaiting word of any assistance from Ottawa. But any lender would also want clarity on exact expenditures as part of its decision-making process.
If football is played this year, it will be in Winnipeg. Earlier this month, the CFL named the Manitoba capital as its tentative hub city.
The league’s revised request to the federal government covers operating costs and player salaries for a shortened campaign. It also included a letter of support from the CFLPA.
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