Seemingly all hopes of a CFL season in 2020 hang on the federal government providing financial assistance.
However, multiple sources told Canadian Press reporter Dan Ralph that the league is no longer in the process of discussing lending options with the Business Development Bank of Canada because the two sides couldn’t come to an agreement on lending criteria.
This follows reports from TSN’s Dave Naylor that the league had ruled out a federal loan because the government had offered only high interest credit that could threaten the league’s financial future.
A loan from the BDC was a difficult proposition for the league as they did not meet the bank’s independent lending criteria. That meant the provinces would have had to sign on to the loan as guarantors. This leaves the league in a significant bind to get funding, but they are not without alternatives, as Ralph reports.
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 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.
Export Development Canada is another crown corporation which traditionally assists exporting Canadian companies get credit through existing financial institutions. In March, the federal government widened its mandate to include non-exporting companies that are struggling due to the pandemic. This would be where the CFL falls, but there remains the significant issue of loans and repayment.
The CFL had previously requested $42.5 million in government assistance to cover operating expenses for a COVID-19 shortened season. That was down from an up to $150 million ask to the federal government when the crisis began. Taking on that type of debt, especially short term, could cripple a business that regularly incurs financial losses to begin with.
All the financial negotiating occurs as the players still have not been paid and grow increasingly angry at the silence coming from the commissioner’s office. With another deadline passing without movement, the prospect of a season seems increasingly unlikely.
