The Alberta government is backing a program it says will provide low-interest loans for flooded out small businesses, agriculture producers and not-for-profit groups.
Finance Minister Doug Horner says the province has brought banks on side by backstopping the bulk of the loans.
"We had to have something in the way of a package or program we could present to the financial institutions," Horner told a news conference. "I didn't want to present them with something that we would go back and renegotiate. I wanted to present them with something they would be able to buy in, that day, and they did."
These businesses, some 1,500 of them, can qualify for low interest loans of up to $1 million. Three quarters of the loan is being guaranteed by the province. Those who participate can apply for rebates of four per cent interest through another program.
"On a quarterly basis the interest charged on the loan will be rebated back to the participant. We did that because we wanted to have them have control of that cash flow. That will be coming directly from the Government of Alberta through (Agriculture Financial Services Corporation) AFSC."
The government believes the program will cost about $120 million, but will eventually create $1 billion in economic activity, "simply by reinvigorating those small businesses," Horner said.
The idea is to buy these small businesses some time so they can look into their futures, while sorting through insurance claims. Horner has asked all banks to hold off 90 days before calling in loans or foreclosing on businesses affected by the flood.
"I asked for ninety (days) but I have no authority to force that issue. It's more of a moral suasion."