TORONTO: The Canadian Taxpayers Federation (CTF) is calling on the federal government to scrap a $1 billion loan announced today by Export Development Corporation to Vale Inc. of Brazil. CTF Federal Director, Kevin Gaudet, said “if corporate welfare worked at creating jobs, every Canadian would have two by now. This loan should be scrapped and fast”.
Gaudet said, “why are Canadian taxpayers lending precious money to a firm that says it already has so much excess cash”.
Vale is a multi-billion multi-national corporation headquartered in Brazil. Their Financial Statements for 2009 reveal a very profitable net income of $5.5 billion (U.S.) down from $13.5 billion and $12.6 billion in the two prior years. On September 23, 2010 Vale announced a share buy-back program for its excess cash.
The CTF asks the government to scrap the loan and to lift the veil of secrecy on the deal, answering a few important questions:
- · How much will Vale draw off the loan and when?
- · How is the loan broken down: repayable vs. conditionally repayable vs. non-repayable?
- · What are the repayment terms and conditions if any?
- · When is the loan due?
- · What is the interest rate?
- · What, if any, loan covenants does the agreement include?
- · What is the remuneration of senior corporate and Canadian executives
SAO PAULO, Oct 04, 2010
Export Development Canada has agreed to lend Brazilian mining company Vale SA (VALE, VALE5.BR) up to $1 billion to help finance the firm's infrastructure projects in Canada, Vale said in a statement Monday.
EDC will lend up to $250 million toward a nickel-refining project in Long Harbor, in the province of Newfoundland and Labrador, and $250 million toward financing projects in the province of Ontario.
The remaining $500 million will be available to finance Vale's purchases of Canadian products for use in its projects outside of the northern-hemisphere country.
The lines of credit don't require guarantees, Vale said.
Vale said the deal with EDC is the latest in a series of financing packages from official entities that Vale is putting together in a number of countries. These provide long-term financing at a "competitive cost," Vale said.