As CADA continues to advocate for you and your needs during this health crisis, we have sent the formal statement below to our dealer lending partners regarding financial arrangements during the COVID-19 crisis. This is an important statement that has been shared directly with the Federal Minister of Finance and important partner associations including the Canadian Banking Association and the Canadian Finance and Leasing Association.
CADA welcomes the different initiatives undertaken by the Federal Government over the last weeks to provide substantial financial resources to banking and lending institutions to support businesses across Canada during the COVID-19 crisis. These measures include:
- Lowering the Domestic Stability Buffer to support over $300 billion of additional lending capacity of Canada’s large banks;
- Creation of the Bankers’ Acceptance Purchase Facility to support a key funding market for small- and medium-size businesses;
- Establishing a Business Credit Availability Program (BCAP). The program supports financing in the private sector through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC);
- Securing a commitment from Canada’s large banks to support businesses through these difficult times.
CADA is currently advocating for the relaunch of the Canadian Secured Credit Facility for automotive finance companies. This program provided significant liquidity to the automotive marketplace during the 2008-09 financial crisis.
CADA is now calling for all banking institutions, including OEM controlled captive financing companies – if they have not done so already – to provide swift and meaningful financial relief to automotive dealers on:
- New and used inventory floor plan arrangements
- Term loans
- Operating lines of credit
- Short and long-term leases
CADA is also calling on lending institutions to redesign their approval & certification processes to accommodate e-signatures and 100% online sales. This will facilitate those online sales that are allowed during the COVID-19 crisis in a safe and efficient manner.
The retail automotive sector contributes over $120 billion to the Canadian economy each year and employs over 160,000 people across the country. The banking sector has been given the tools by government to provide liquidity to our dealers and they have made Ministerial-level commitments to support businesses with these tools.
CADA has begun a formal monitoring process of dealership liquidity which we will share with banking associations and individual financial institutions. We urge all banking institutions to act quickly to ensure the financial viability of franchised new car and truck dealers.