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The federal government is teaming with Ontario, Quebec and Alberta to provide a crucial financial backstop to salvage a restructuring plan for a $32 billion slice of the commercial paper market.

The exact amount of the "senior funding facility" was not disclosed yesterday, with a Finance Department spokesperson saying the size of the public support and other details would be released "later."

Ambiguousness in the announcement prompted some retail investors with life savings entangled in non-bank, asset-backed commercial paper to react with skepticism, as they repeated pleas to Finance Minister Jim Flaherty to impose a strict condition on Ottawa’s support of the problem-plagued deal.

Mike and Wynne Miles of Victoria, B.C., are among those pleading with Flaherty to make the government’s backstop conditional on the immediate compensation of retail investors by the securities dealers that sold them the ill-fated ABCP. With the restructuring now in its 16th month, the couple say the financial hardship is becoming too much to bear.

"If the government provides funding for this, it would be really useful to have firm deadlines that ensure the retail owners get paid out soon," said Mike Miles in a telephone interview. "We want out."

Diane Urquhart, an adviser to the retail group, argues that government involvement means the deal is no longer a private-sector solution, adding the "public interest" must be served.

"We think the closing could take several more months. And there is no certainty that it will close …," she said. "We are just saying, `Get us out of the restructuring’."

Not all retail investors agree with that approach bad credit pay day loans. Among them is Brian Hunter, a Calgary-based engineer who started a Facebook group to help galvanize support for retail investors.

"The reality is a deal is a deal. And we have made that deal and we are happy to stick with it," he said.

"If it was going to collapse, then yes, we would have to look at other alternatives. But if it is proceeding along a reasonable path, why would we need to?"

About 2,000 retail investors are affected by the restructuring plan, known as the Montreal Accord. The group represents only about $400 million or 1 per cent of the total ABCP outstanding. Institutional investors hold most of the notes.

Most retail investors have struck separate bailout deals with their brokers, but getting their money back hinges on the completion of the main restructuring.

The Pan Canadian investors committee led by Bay Street lawyer Purdy Crawford has been working on that fix-it plan since 2007. It recently told Ottawa that it needed $9.5 billion in further guarantees.

Flaherty’s announcement could keep the restructuring from collapsing after foreign banks threatened to walk away from the deal.

"We expect that this will allow the investors and asset providers to achieve a stable and effective restructuring agreement," Flaherty said in a statement. "A successful restructuring agreement will protect financial stability and the health of Canada’s financial markets."

With files from the Star’s wire services

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