I'll tell you what. Everybody seems fairly flexible about trying to find some common good, so why don't we finish, at the very least, the introductory remarks. Then we'll check the clock and I'll touch base with you again and see. There's likely to be something obvious in front of us that we can move at that time.
Does that work for everybody?
Some hon. members: Agreed.
The Chair: Very good. That gives us process.
I would also ask the committee to give a very warm welcome to a foreign delegation, colleagues from Vietnam, including their deputy auditor general. I know we would like to give them a very warm Canadian welcome for being here.
Some hon. members: Hear, hear!
The Chair: Thank you for taking the time to visit us. We're honoured by your presence.
I will be meeting with the delegation afterwards for a short briefing and any colleagues who would like to join us are welcome.
I will just remind everybody that at our next meeting, on Wednesday, we'll resume our draft study of chapter 3, on mental health services for veterans, of the fall 2014 report of the Auditor General.
I'm now ready to move us to the orders of the day. Today our hearing is on chapter 5, on support to the automotive sector, of the fall 2014 report of the Auditor General of Canada. Our format is a little unusual today, colleagues. There are three groups of presenters from the government side, and I was asked if one of them could do a 10-minute presentation, which is what the three groups would prefer, as opposed to taking the 15 minutes they would take if they took five minutes each.
I saw no problem with that and have given them the approval and the okay. Unless the committee wants to have a revolution over that, that's the way we'll proceed. We will, however, of course first hear from the Auditor General's office, which will give its opening remarks in the usual fashion. Unless there are any interventions, we are going to proceed in that fashion.
I thank the committee for giving us this opportunity to discuss chapter 5 of our report, entitled “Support to the Automotive Sector”. It is in our 2014 Fall Report. Joining me at the table is Richard Domingue, Principal, who was responsible for the audit.
The global economic recession of 2008 negatively affected Canada's production and employment in the automotive industry. Vehicle sales declined sharply in the United States and Canada, and some companies, including Chrysler and General Motors, could not generate sufficient income to fund their operations.
In December 2008, the governments of Canada and Ontario joined the U.S. government and offered financial assistance to Chrysler Canada and GM Canada. In total, the federal government provided $9 billion of financial assistance to support the restructuring of Chrysler and GM, including their Canadian subsidiaries.
We looked at how Industry Canada, the Department of Finance Canada, and Export Development Canada managed this financial assistance. The assistance involved complex transactions, high uncertainty, and tight timeframes. These circumstances had an impact on what Industry Canada could do to manage the assistance.
We found that Industry Canada, the Department of Finance Canada, and Export Development Canada managed the financial support to the automotive sector in a way that contributed to the viability of the companies and the competitiveness of the sector in Canada over the short and medium terms.
Industry Canada adequately assessed the recovery prospects of Chrysler and GM. This helped the government decide whether to participate in the financing of the companies' restructuring. However, Industry Canada had limited information on required concessions from unionized labour and other stakeholders, and on GM Canada's pension liabilities. This lack of information made it difficult for the department to understand the impact of its assistance on the long-term viability of the companies.
Industry Canada's information on the use of funds was limited to broad categories. For example, Industry Canada had limited documentation on the actual use of a $2.8-billion loan made to GM Canada for capital expenditures, warranty claims, and other general corporate purposes. However, the department adequately monitored the companies' production commitments in Canada.
Mr. Chair, we also found that there was no comprehensive reporting to Parliament of information about the restructuring assistance. Based on the information publicly available, we found it impossible to gain a complete picture of the assistance provided and of the amounts recovered and lost.
In 2008, the federal government launched the automotive innovation fund program. The program's objective is to support automotive firms in their strategic, large-scale research and development projects to produce innovative, greener, and more fuel-efficient vehicles. In addition, the government expects the program to contribute to a more competitive Canadian automotive sector.
We looked at how Industry Canada managed this program. Overall we found that Industry Canada's assessment of each project proposal was consistent with the program's terms and conditions, but in our opinion its risk assessment framework was more comprehensive than required. The department could streamline its risk analysis, given that recipients assume all of the technical risks and most of the financial risks of their projects.
Industry Canada has adequate information coming from progress reports and site visits to allow the progress of each project to be tracked.
However, Industry Canada has not yet used this information to determine whether the program is achieving its objectives.
Industry Canada has agreed with our recommendations and set deadlines for their implementation. Last December the department met one of its deadlines by issuing a report entitled “Summary Report on Canada's Support for the Restructuring of General Motors and Chrysler in 2009”.
Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have.
With that, thank you, Mr. Chair and committee members, for allowing me to provide you with a brief overview of Industry Canada's response to the Auditor General's 2014 fall report on the restructuring assistance provided to General Motors and Chrysler during the economic crisis of 2009 as well as the automotive innovation fund.
As you are aware, Canada has a strong automotive sector, which generates $17 billion annually of value-added, or 10% of Canada's manufacturing GDP. With some 730 automotive suppliers supporting our 11 assembly lines and three engine plants, the industry employs some 117,000 Canadians directly, and another 377,000 Canadians indirectly. In fact, in 2014, Ontario was the largest automotive manufacturing jurisdiction in North America—larger even than Michigan.
The auto sector is also export orientated. There are 90% of Canadian-made vehicles sold abroad, the vast majority of these in the United States. The proximity to the U.S., one of the most profitable auto markets, is one of our competitive strengths. Our auto sector is truly part of an integrated North American market.
Industry Canada is always interested in views and ideas that will help us support and grow Canada's automotive sector. While we hope we will never face a situation like the crisis of 2009 again, we are also interested in learning from such circumstances and in continuously improving how we prepare and respond. In this light, we welcomed the Auditor General's four recommendations. In fact, Industry Canada has already acted upon two of them and plans to act on the other two recommendations in a timely fashion. I will discuss this later in my remarks.
As you know, Mr. Chair, late 2008 and early 2009 was a period of extreme uncertainty and volatility. Credit was tightening, consumers were scaling down and postponing their spending, and economies around the globe appeared to be heading into recession, if they weren't already. The auto sector was experiencing first-hand the impacts of consumers postponing major expenditures. Annual vehicle sales plummeted in the U.S. in 2009, from about 17 million vehicles per year to a little over 10 million.
With shrinking sales, the financial situation of all companies was becoming desperate, but for GM and Chrysler it was particularly bad, as it did not have access to capital like the others. In November 2008, GM announced it would run out of cash around mid-2009 without a combination of government funding, a merger, or sales of assets. No credit institution was in a position to help either GM or Chrysler.
While Canadian sales did not dip as much, Canadian assemblers were not sheltered by the events in the U.S., given that close to 90% of Canadian-made cars are exported to that country. Canadian subsidiaries were directly impacted by their parent companies' difficulties. There was a real risk that GM and Chrysler might shutter their Canadian operations in an attempt to restructure.
GM and Chrysler were at the time, and continue to be, the two largest carmakers in Canada, accounting for more than 55% of total production. Many of Canada's suppliers depended on contracts with GM and Chrysler. Without this work, many would not have survived, leading to a hollowing out of the suppliers and creating problems for the other original automotive equipment manufacturers.
That would have triggered a collapse of the entire Canadian automotive supply chain. The strong links and interdependencies between our supply chain and our assemblers were the key motivation for government action and support of GM and Chrysler. GM and Chrysler in Canada had to be protected from being collateral damage of the events in the U.S., not only for their sake but for the entire suppliers sector and ultimately the entire automotive industry in Canada.
Mr. Chair, as the Auditor General concluded, the Government of Canada did what it set out to do: prevent the disorderly collapse of the auto sector and ensure a viable automotive sector in Canada.
The clock was ticking. There was a very short timeframe to find a viable remedy for both GM and Chrysler. Both were in dire financial straits, and Chrysler needed to find a buyer. From the point that the crisis started and GM submitted high-level restructuring plans to the U.S. Congress in late 2008, governments had less than a month to decide whether to provide an initial set of loans. Again, once the company submitted more detailed plans, there was only about six weeks to assess their long-term viability.
As these events demonstrate, the restructuring of GM and Chrysler took place under intensely challenging circumstances. It required unprecedented collective action by the federal, Ontario, and U.S. governments.
While Charles and I at Industry Canada were not there at the time of the restructuring, the federal government did quickly organize an automotive response team. It was headed by Mr. Richard Dicerni and Mr. Paul Boothe, the deputy minister and associate deputy minister at Industry Canada at the time, and Mr. Ron Parker and Mr. David Moloney, who are my predecessors and who led a team of dedicated public servants who worked tirelessly and in unique ways to manage the government's response to the crisis. It supported a steering committee made up of deputy ministers from Industry Canada and Finance, as well as representatives from Export Development Canada, the Privy Council Office, and the Ontario Ministry of Finance and Ministry of Economic Development and Tourism, who all played important roles.
The team also reached out to stakeholders and experts to ensure it quickly had access to the necessary knowledge and expertise, whether on financial corporate restructuring from KPMG and Ernst and Young or on U.S. and Canadian insolvency law from Cassels Brock or on the automotive market from CSM Worldwide and Casesa Shapiro Group.
There were external discussions with those in the industry, including assemblers and suppliers, to gather essential information needed to assess and understand the risk. The government then made a responsible decision and took decisive action. Afterwards, my department monitored the two companies to ensure they fulfilled their end of the bargain and to ensure that the restructuring would deliver the desired results.
Mr. Chair, I am impressed by the work accomplished by my predecessors for the Canadian industry and its workers. Their work was the basis of the government actions and it paid off. It also proved to be pivotal in securing the immediate future of Canada's automotive industry and the economy at large. In early 2009, GM and Chrysler assembly plants directly employed an estimated 14,000 workers. Today both companies continue to be Canada's largest automotive manufacturers, employing about 19,000 Canadians, and the economic benefits extend far beyond the two companies. At the time of the crisis, the Department of Finance estimated that a total of 52,000 jobs were directly or indirectly tied to production at GM and Chrysler. Another study, by Leslie Shiell and Robin Somerville at the IRPP, estimated that in 2010 a total of 100,000 jobs, including jobs in the supplier sector, could have been lost without the restructuring. The study further suggested that in 2009 alone the economy could have suffered losses of $23 billion had GM and Chrysler not successfully restructured. The government's decisive actions ensured that there was business for hundreds of suppliers. The effects even spilled over into industries across the Canadian economy.
Today, all Canadian automakers, including GM and Chrysler, are investing in their operations. In the last two years in particular, each of Canada's five automotive assemblers has reinvested in Canada, and auto parts manufacturers have also invested in their operations. Another sign that the sector is doing well is that Canada's production increased to almost 2.4 million vehicles in 2014. The auto sector will continue to contribute significantly to the Canadian economy for many years to come.
All this work was and continues to be recognized, not only by the industry but also by third party analysis such as the IRPP study I mentioned, which concluded that the restructuring assistance was successful. Furthermore, Industry Canada received recognition for its accomplishments, including in the form of the Institute of Public Administration of Canada's 2010 innovative management award. I believe it is a remarkable success story that we were able to partner quickly and effectively with our counterparts at home and abroad, within and outside of government, to provide sound advice and ultimately save thousands of jobs and hundreds of businesses, and to secure a future for Canada's auto sector.
With respect to the automotive innovation fund, I am pleased that the report reflects a program that continues to be well managed. In many respects, it's still early days for the program. It was established in 2008 and seven projects have been supported. The initial projects are just now being completed, yet we know from the initial evaluation we did in 2012 that the program is meeting its short-term objectives. It has leveraged about $2.8 billion in investments since its inception, and as the Auditor General has recommended, we will continue to report against its longer-term objectives as projects are completed.
Mr. Chair, I want to conclude my remarks by noting that we have learned a great deal from these experiences, and the Auditor General's recommendations have helped embed these. The recommendations have highlighted that clear and comprehensive reporting on support provided and the management of that support contributes to the public understanding of the restructuring success. In order to increase the ease of access to the information, last December we published a single summary report on the restructuring support and recoveries. We've also committed to undertaking a review of the management of the restructuring assistance with a focus on identifying lessons learned. This work will be completed this year.
The Auditor General also recommended reviewing how we evaluate proposals for support from the automotive innovation fund, and monitoring the performance of the program.
We have updated the program's risk assessment framework and made explicit the manner in which risk profiles of applicants are assessed. We will also evaluate the program again in 2017-18 to determine to what extent it achieves its long-term objectives.
It is fair to say, just like all Canadians, we hope we never face such a challenge again, requiring us to use the lessons learned from the 2009 crisis.
Thank you, Mr. Chair and committee members. We will be pleased to respond to your questions.
Thank you, Chair, and welcome to our witnesses today. This is certainly an important topic. I appreciate your opening comments. Mr. Jennings, you especially commented on an area I'd like to open with and also ask Mr. Berthelette. I'm talking about the scale of the industry. I think your comments reflect it well.
The auto sector remains a vital part of our Canadian economy. The Canadian auto sector just experienced two record sales years: 1.8 million vehicles per year in Canada, which is a remarkable recovery considering where we came from in 2007-08, which you've all reiterated today. It's interesting that our government has worked hard to put in place the right conditions, with low taxes making Canada a great place to do business, and employing tools like the automotive innovation fund, which has given manufacturers incentives to do bigger and better work.
As we've heard today, one manufacturer in Alliston is building new right-hand drive cars for the CETA European market. Ford in Oakville is doing the same thing. They're building right-hand drive vehicles for Europe. That has to be an encouraging sight, particularly for those who lived through it up here in those terrific times.
In section 5.2 of the report, Mr. Berthelette, there's a pretty good summary. It talks about the extent of this industry and just how important this industry is to the overall economy. It states that:
In 2007, approximately 1.5 percent ($21.4 billion) of the Canadian gross domestic product was attributable to the car industry, compared with about 1.1 percent ($19.1 billion) in 2013. In 2007, car manufacturers and parts suppliers employed 152,000 people. In 2013, the sector employed about 117,000 people.
Mr. Berthelette, I don't want to reiterate all the comments that have already been stated, but could you talk to how many jobs you estimated, i.e., the Auditor General's office, would have been lost had General Motors and Chrysler ceased production? Does this include runoff jobs such as dealers? General Motors had 700 dealers at the time; Chrysler had 450 dealers. I wonder if you could consider them as well in your total numbers.
If GM and Chrysler had ceased production, you stated in your comments that tax revenues would have decreased, and expenditures such as those for social programs would have increased. What do you estimate this could have cost the federal government?
Mr. Chair, I agree with what you say.
I would make reference to paragraph 5.88, which is our conclusion:
...we concluded that Industry Canada, the Department of Finance Canada, and Export Development Canada managed the financial support to the automotive sector in a way that contributed to the viability of the companies and the competitiveness of the sector...over the short and medium terms.
Generally, this is a good news story.
Mr. Chair, I would then make reference to paragraph 5.23. While I just noted that it is a good news story, there are certain areas where we saw that some more work could have been done. There were areas where there was limited analysis and limited information.
We recognized, as we state in paragraph 5.25, that, “The federal government made its decisions on financial assistance in a period of high uncertainty and within tight time frames.” We understand that. We think more work could have been done in terms of the analysis, maybe relying less on the material presented by the companies and doing a little more independent analysis of it, and perhaps doing a more independent challenge of the information that had been presented.
I think that a final restructuring plan would have been good. It would have provided a place where all of the details related to the restructuring could have been brought together in one place. It would have made it easier for the department and for Canadians to follow what had gone on in the restructuring, and would have made it easier for the department to report against the restructuring.
We have in appendix A, which I believe is at page 25 in my document, some suggestions related to going forward if there is ever another situation like this. We made suggestions related to the planning, monitoring, and public reporting related to such large interventions by the federal government.
I am going to try to answer that question.
One thing the Auditor General did highlight was the fact that it would be useful to do a lessons learned exercise. While we didn't do a formal one, following the crisis we got together among partners—with Ontario and all of the federal departments—to understand what we learned from that crisis: what worked well and what didn't work well. I think the reason there was an award received for the work that was done is that principally there were a lot of very positive lessons learned.
The first lesson was about pooling resources, in the sense of working across organizations and understanding where there was expertise and where you had to draw on additional expertise to support the intensive work that was necessary under very tight timeframes. I mentioned already that there was financial expertise that had to be brought in. There was legal work that was done. There was actuarial work that was brought in. There were leading experts who were hired. It was about trying to, within a matter of weeks, get the intelligence that was necessary to inform the decisions that were made. That's one big lesson that was learned.
The other one was about working together and coordination. A decision that was made very early on was striking at very high levels, at a deputy minister committee, which would talk on a daily basis to keep track of where things were and to support the decisions being made.
Another one was a very novel approach, in terms of what we called “home and away teams”. There were a number of negotiation sessions that did take place outside of Canada. There was a very intense session in New York dealing with General Motors, and one with Chrysler that took place in Washington. There were senior teams where those negotiations were taking place, as well as senior teams that were in Ottawa. They were supporting each other in terms of trying to ensure we got the outcome that was desired. If Canada and Ontario were going to participate and support the companies, it was ensuring that we got the outcomes we wanted. As we've seen, the outcomes have been very strong, in the sense of both companies being very viable and vibrant now, and they're both reinvesting in Canada.
Thank you very much, Mr. Chair.
Thank you, folks, for being with us.
Mr. Berthelette, in the Auditor General's report, on page 12 in the English at 5.45, 5.46, and 5.47, it talks about the amounts of money that were set aside as part of the whole. It talks in broad strokes about the $2.8-billion loan made for capital expenditures, warranty claims, under general corporate purposes. It goes on to talk about the $4-billion loan, $1 billion of which was for the GM pension plan.
There seems to be a concern with that piece in the sense, as you raise it, that it was set aside for the pension plan but it seemed to be set aside in a trust or some sort of other account that the parent corporation, which is actually a U.S.-based corporation, seemed to control.
Can you walk me through that piece as to what you found in the sense of the lack of oversight or control, if I can use those terms? I'm not suggesting you will, but can you tell us what happened with that billion dollars in the sense of the control of it or lack thereof?
Thank you, Mr. Berthelette.
It goes back to the point I think Mr. Watson made about at the time there was a real liquidity crisis in the markets. I think everyone would agree. There was a meltdown and money was tight; it was hard to find. Canadian taxpayers' dollars went into a restructuring plan, a billion of which finds its way to the U.S. corporate headquarters. Of course for those of us...and four of us on this committee are either representatives of or tied to the auto sector one way or the other: Mr. Watson, Mr. Carrie, Mr. Carmichael, and me, who represented workers.
I know all too well, as an ex-CAW leader who was at bargaining, that you bargain and fight against each other inside your own corporation. If the liquidity ends up in GM U.S. hands...and we don't know what happened with it, they may very well have invested it. I'm speculating; I'm not asking you to speculate. They could have invested in a plant in the southern United States that takes on the St. Catharines transmission plant that I represent. We don't know that.
With money being tight, they could have used part of the money that was in escrow to take on what we thought was going to be a viable corporation up here that we were trying to bail out at the time. That's speculation; we don't know.
As you pointed out, Mr. Berthelette, I guess we should have known, and I think what Industry Canada is saying, Mr. Jennings, is that in the future we will find out and know where money is going. I believe that's what you said in your action plan. Is that correct?
Participating in the overall restructuring of GM and Chrysler was necessary to protect the Canadian automotive sector at large, which I said in my opening remarks.
With most of the production exported to the U.S., the events that were south of the border were affecting Canadian car production and auto part suppliers. Just to put numbers in perspective, the GM production, months before the worst part of the crisis, was 150,000 units, which they were producing on an annual basis. That went down to 49,000, just to give you a sense of just how much that dropped. In terms of Chrysler, production fell from 143,000 to 30,000. You have drops of about two-thirds in the case of GM and a drop of about 80% in the sense of Chrysler.
Obviously at the end of the day having such a steep decline in terms of production really put the viability of those operations at risk. As these companies were looking to restructure, the Government of Canada and the Government of Ontario wanted to ensure that we were at the table so that any restructured company would essentially maintain the Canadian operations.
We protected those interests in terms of our negotiations with those companies. While I can't get into the details of the covenants because they are commercially confidential, there were production commitments made by the companies and there were commitments made in terms of the capital expenditure investments in Canada as well as research and development commitments to Canada.
The last thing I will just say, which is important to note as well, is that the viability of these companies not only mattered to those companies and the suppliers obviously that relied on them, but also to the other manufacturers that did not directly receive money.
I will give you just two very quick quotes. During the crisis Toyota essentially said that they were mostly concerned with the suppliers, “And if the supply chain falls apart...it could stop production at Toyota's plants, too.”
As well, Alan Mulally the CEO of Ford, said in 2012, “If GM and Chrysler would've gone into free-fall they could've taken the entire supply base into free-fall also”.
Maybe I'll answer the last question first, which is that there is no federal equivalent to the automotive innovation fund in the U.S. The support that takes place in the U.S. in terms of attracting automotive investment is at the state level. That's usually a combination of either direct subsidies, tax abatements, land and infrastructure, as well as training support.
In terms of the automotive sector, I guess the first thing to note is that the industry has continued to grow. As I've mentioned, there has been investment by all the five assemblers, as well as by suppliers in Canada, but it's not without competitive challenges. At the end of the day, it is a sector where many jurisdictions do try to attract this type of investment.
It may be useful to walk through what we consider to be Canada's value proposition of why people invest. The automotive innovation fund, as you noted, has to date had a billion dollars allocated to that program. Not all of it has been invested to date, but what has been invested to date has leveraged about $2.8 billion from investments in the private sector, including the Ontario government. What we also have is a number of programs that support research and development in the auto sector. I'll just name a couple of organizations federally: the National Research Council and the Natural Sciences and Engineering Research Council. They provide R and D support, as well as more generous tax credits that also flow to a number of sectors under the scientific research and experimental development tax credit.
Another thing I should note as well is the investment climate. It is one with lower corporate tax rates, which have been cited by many auto companies in terms of being attractive, as well as a workforce that continues to produce high-quality vehicles because of high skills.
I'll maybe just mention on that point that J.D. Power, which is a leading firm that assesses quality.... One-third of all awards that have ever been given have been given to plants in Canada, which is much higher than the proportion of the production that we have.
Maybe the last thing very quickly—
Thank you very much, Mr. Chair.
Thank you all very much for being here. I have to say that if I listen to my colleagues across the way, everything is wonderful, you did a great job, and all of that. Well, if that were the case, none of you would be sitting here before the public accounts committee. Clearly there are issues that need to be dealt with.
I want to also reiterate my and all of my colleagues' support for the auto industry. We understand how important that industry is, not just to Ontario but to all of Canada. We were all under huge amounts of pressure at that particular time, opposition and government, to assist in helping to save that industry.
I'm not being critical of the fact that we saved the industry, or at least we think we have. There were reports this morning in The Globe and Mail about the concern of the closing down the Oshawa plants and what that would do. I'm sure that—again, for all of us—we don't want that to happen. When the government commits to a $9-billion bailout, my disappointment here is the fact that, yes, you didn't have sufficient information and this, that, and the rest of it, but we trust you to make sure you have everything in line. All the ducks have to be in order. It's a $9-billion investment that we want to be successful. Clearly the pressure on the department to approve this money and to move forward once Parliament had approved it was probably very difficult, but clearly you were making decisions without sufficient information.
Could you not have held back for more information, even though the commitment was there, the money was there, and allocated it in a slower way while you got the information you needed to be able to back up your decisions? At the end of the day, Parliament's responsible for every cent that goes out, but you are also responsible. Could you not have secured more information through this process than you did?
I just want to return, first of all, to the context. When we're talking about restructuring, it's easy with the passage of time to remember precisely how difficult the time was when this decision was being made. Unemployment in Oshawa, for example, in 2009 was at or above 10%. In Windsor I remember it being as deep as 15.3% at the depths of the recession, and that was without losing the auto sector and all of those related jobs.
It's not just numbers. It is, of course, families, and what that could have meant to them. Windsor, I dare say, would have been a ghost town. This is what the Center for Automotive Research in Ann Arbor said in its study of the U.S. auto bailout. They said that a collapse of GM and Chrysler “would have produced a Depression Era economy in much of the upper Midwest.” I think our at the time suggested that if the industry had gone under, it would have blown a gaping hole in the Canadian economy. That recession could have been significantly worse than it was. We are talking about how the restructuring was implemented precisely because this government actually authorized the funds to be used.
I appreciate the talk of support by members opposite, but the reality is that the authorization for these programs came from Conservative members standing up on that, including funding for the auto innovation fund in 2008 and in 2013-14, as well as through restructuring in the budget of 2009. We don't get results if we don't in fact advance the money.
Regarding the report on the auto innovation fund, Mr. Jennings, we already established that risk assessments that were completed may be exhaustive in some ways. I asked whether the additional criticisms of the Auditor General have already been incorporated into the risk assessment framework of the department. You suggested that has been done.
The program has a number of safeguards. I point to page 18 of the Auditor General's report. There are three safeguards identified there, if I'm correct. The funds are disbursed only after the recipient has invested its own money. That's a significant safeguard. That support is unconditionally repayable. Can you explain what that means?