June 25, 2021
Government announces agreement with Sunwing on traveller refunds
Today, the Canada Enterprise Emergency Funding Corp. (CEEFC) announced that it has reached an agreement with Sunwing to provide a repayable loan of up to $100 million, under the Large Employer Emergency Financing Facility (LEEFF), to enable Sunwing to provide refunds to eligible Sunwing customers.
As a result of this repayable loan, Sunwing will expand its refund policy to provide refunds to eligible customers who were issued a travel credit due to vacation cancellations resulting from the COVID-19 pandemic. This will apply to eligible flights, hotels and vacation packages booked on or before June 25, 2021, for scheduled travel on or after February 1, 2020. Sunwing will make customers aware of its updated refund policy through public announcements and direct outreach to customers. Sunwing will launch an online portal for customers to request refunds; customers will have until August 27, 2021, to request refunds under these updated terms.
This repayable loan is separate from an existing LEEFF loan, agreed to in February 2021, whereby CEEFC is making $348 million of liquidity available to Sunwing Vacations Inc. and Sunwing Airlines Inc. to protect jobs in Canada’s airline sector.
LEEFF provides bridge financing to Canada’s largest employers whose needs during the pandemic are not being met through private market financing. The facility provides large Canadian employers with access to credit to preserve jobs and continue operations during this recovery period. Among other key principles, the terms of LEEFF impose limits on executive compensation and restrict the payment of dividends and other distributions by a recipient.
- LEEFF is open to all large, for-profit Canadian employers who have a significant impact on Canada’s economy and provide millions of jobs to Canadians. Companies in the financial sector are not eligible for LEEFF. In order to qualify for LEEFF, a company must have more than $300 million of annual revenues and require a loan of at least $60 million. Certain not-for-profit enterprises, such as airports, may also be eligible. Any company that has been found guilty of tax evasion is not eligible.
- As part of the LEEFF program Sunwing has agreed to place restrictions on executive compensation, dividends, and share buybacks.
- Key terms of LEEFF can be found at https://www.ceefc-cfuec.ca/leeff-factsheet/.
- A list of approved LEEFF financing can be found at https://www.ceefc-cfuec.ca/approved-loans/.