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Business Development Bank will get $350M injection, Clement says

Last Updated: Monday, January 19, 2009 | 9:26 AM ET

CBC News

Federal Industry Minister Tony Clement said Monday the government will inject $350 million into the Business Development Bank in a move meant to spur the extension of credit to small and medium-sized firms.

Clement made the announcement in Toronto during an address to the Canadian International Council.

"Current market developments have resulted in increased demand for BDC financing and services, and the government has taken this action to enable the BDC to help counter the effects of the credit crunch," Clement said.

The federal government is providing $250 million in immediate funding to the BDC, with another $100 million due once the bank has worked out agreements with other financial institutions to top up lines of credit for small and medium-sized businesses.

The money is expected to lead to financing for between 3,000 and 4,000 businesses across the country.

Clement said the money will be included in the federal budget due to come down Jan. 27.

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