Today, the Canadian government launched a consultation on how to best implement the Canadian Secured Credit Facility (CSCF), a component of Canada's Economic Action Plan announced last month by the Canadian Department of Finance. According to the Economic Action Plan, the CSCF will be allocated up to CAD $12 billion to purchase term asset-backed securities (ABS) backed by loans and leases on vehicles and equipment, priced on commercial terms, with "the expectation of generating a positive return" for the Canadian government. The Canadian government "[w]ants to hear from interested Canadians on the optimal means to structure this facility and put funding in the hands of those who need it," including:
- What structure would best facilitate restarting the term ABS market in Canada?
- How should purchases be priced?
- How should funds be allocated among eligible participants and different categories of ABS?
The CSCF will be managed by the Business Development Bank of Canada (BDC) and administered within parameters jointly developed by the Department of Finance and BDC following the consultation process.