Federal Finance Minister Jim Flaherty and Industry Minister Tony Clement welcomed the rollout of the Canadian Secured Credit Facility (CSCF) on Friday.

“Our government has taken a broad and comprehensive approach to ensuring access to credit and financing through the Extraordinary Financing Framework announced in Canada’s Economic Action Plan,” says Flaherty. “The CSCF is a critical component of the Extraordinary Financing Framework, which identifies a key gap in the credit market and helps to address it.”

In its recent budget, the federal government announced the CSCF would purchase up to $12 billion of term asset-backed securities (ABS) backed by loans and leases on vehicles and equipment. The aims are to stimulate economic activity by supporting sales of vehicles and equipment in Canada and to encourage renewed investor participation and confidence in the Canadian ABS market for vehicle and equipment financing.

On Friday, the Business Development Bank of Canada (BDC) announced that over $10 billion of funding has been allocated in the Large Enterprise Tranche of the CSCF. Fifteen lenders from a cross-section of the vehicle and equipment financing industry have received the allocations.

“The key objective of the CSCF is to ensure access to credit for businesses and consumers, which is important to the auto industry at this critical time,” says Clement. “At the same time, this measure will help stimulate Canada’s manufacturing sector as the CSCF supports the sales of vehicles and heavy equipment.”

BDC also launched the process that will target an allocation of $1 billion in the Small Enterprise Tranche of the CSCF using a smaller minimum transaction size than in the Large Enterprise Tranche.

“The government is committed to high standards of transparency and fairness with the CSCF, so we are ensuring that the CSCF is available to a broader range of lenders,” said Flaherty.

IE