The government of Manitoba has committed more than C$34 million (US$25 million) during the next two years to support the province’s transit operators as they face continued financial challenges from the COVID-19 pandemic. The funding will also address affordable housing supply and density.
The funding is part of the government of Canada’s C$750 million (US$551.58 million) investment to support transit systems across the country to address shortfalls caused by the pandemic. Manitoba was allocated C$20.7 million (US$15.22 million) of this funding, which is conditional and requires provincial and territorial government to match the federal contribution, as well as accelerate work to build more homes.
Municipal Relations Minister Eileen Clarke noted up to C$13.4 million (US$9.85 million) would be allocated in the province’s 2023 budget for transit operations in the province.
“Our government is pleased to support municipal transit systems in Winnipeg, Brandon, Thompson, Selkirk and Flin Flon as they continue to take measures to recover from economic shortfalls experienced due to reduced ridership during the pandemic,” said Minister Clarke. “Our funding immediately leverages and enhances C$20.7 million (US$15.22 million) in federal funding, which flowed to the province earlier this year. As part of the federal agreement, the Manitoba government is also committed to work with municipalities towards the shared priorities of improving housing supply and affordability for Manitobans that can, together with transit, improve the ability of Manitobans to live affordably.”
NFI’s loan
The province will soon finalize a loan with NFI Group for C$50 million (US$36.77 million), as the bus manufacturer faces supply chain and inflationary challenges.
EDC committed a US$50 million debt facility to support supply chain financing and an up to US$100 million credit/guarantee facility for NFI’s surety and performance bonding requirements for new contracts.
Soubry explained the company has had “an unbelievable terrible ride since COVID began in March 2020”, with global supply chain challenges hampering the company’s ability to secure parts due to rapid inflation, with parts increasing between 17 percent and 20 percent over a four- to five-month period and massive volatility in currency exchange.
Soubry says NFI has nearly 500 vehicles that were built at its peak, but they were built offline, which represents US$250 million in cash that was tied up by supply chain issues and customers who were waiting for delivery of their vehicles.
According to Soubry, the financial support provided by the provincial government and the EDC grants NFI stability needed to get to the next chapter. Globally, NFI Group employs 7,500 people, 2,500 of which reside in Manitoba. The company is headquartered in Winnipeg, as are three manufacturing facilities and a parts distribution facility. Soubry says the company is “proud as hell to be Manitoban.”
“On behalf of the NFI Group, I would like to thank the Manitoba government for this tangible and critical display of support,” said Soubry. “The loan from the province is critically important in strengthening our financial position, increasing our liquidity, maintaining jobs in Manitoba and allowing us to focus on execution and realization of record demand for our products and services.”
The loan from the government of Manitoba will be repaid in 12 months, with an option to extend the repayment period an additional 12 months. The loan is expected to be finalized in January 2023.
“Cities around the world from Los Angeles to London rely on NFI Group’s cutting-edge vehicles to safely and efficiently move millions of passengers every day,” said Manitoba Economic Development, Investment and Trade Minister Cliff Cullen. “NFI Group is also a key employer and industry leader in Manitoba with a history of success and growth that illustrates Manitoba’s burgeoning manufacturing industry. Our government is pleased to support NFI Group with this loan, which not only helps grow our economy, but also keeps jobs here in our province.”
