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Canadian business call on Freeland to extend CEBA deadline

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Business groups across Canada are pleading with the federal government to grant them more time to pay back emergency loans offered during the COVID-19 pandemic.

In a new letter to Deputy Prime Minister and Finance Minister Chrystia Freeland, organizations representing hundreds of thousands of small businesses are calling for another year or two to pay back their Canada Emergency Business Account (CEBA) loans.

“Many businesses had no choice but to take on this loan due to circumstances beyond their control… With each passing day, entrepreneurs who collectively maintain a very considerable workforce, face increasingly daunting financial pressure,” reads the letter, provided to CTV News. “Ottawa needs to act now to extend the CEBA repayment deadline.”

The federal government created CEBA early in the pandemic as one of a suite of financial aid measures aimed at keeping small businesses and non-profits afloat in the face of forced closures and health restrictions. Open for applications between April 2020 and June 2021, the loans were approved for 898,271 businesses, totalling $49.2 billion in federal assistance.

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In January 2022, in the wake of the Omicron variant surge and new restrictions, the Liberals announced they would be extending the repayment deadline by a year to the end of 2023. This meant that eligible businesses “in good standing” would have until Dec. 31, 2023 to repay and be eligible for debt forgiveness of one-third—up to $20,000—of their loan.

Monday’s letter—signed by more than 250 local chambers of commerce, tourism, and industry groups across Canada—indicates that while the government gave business in crisis a lifeline with these loans, years later many still are treading water in their post-pandemic recoveries. This has left them unable to make much more than a dent in the debt they’ve taken on, in the face of supply chain and hiring woes, as well as high inflation.

Now, businesses want to see the repayment deadline extended by two years to the end of 2025, or at least by one year, while maintaining access to the forgivable portion of their loans.

“Unless the federal government acts quickly to postpone the CEBA repayment deadline, businesses that are unable to repay their CEBA loan in time will lose access to the forgivable portion… thus further increasing their debt load,” the letter reads.

“Extending the repayment timeline for the CEBA loan without losing access to the forgivable portion would give many small-and-medium size businesses the stability and certainty they need to get back on their feet on a path to prosperity.”

The letter warns that without leniency many of the local businesses—particularly in the tourism sector—that federal government doled out billions to help save could be forced to close.

Among the signatories are the Tourism Industry Association of Canada, the Canadian Craft Brewers Association, the Canadian Home Builders’ Association, and Restaurants Canada.

According to recent surveys of CEBA loan-holders, 49 per cent of small businesses are still making below-normal revenues, some restaurants are still operating at a loss or just breaking even, and without government intervention 45 per cent of tourism businesses are likely or somewhat likely to be forced to shutter within the next three years.

“We’re not asking the government for an amnesty on COVID-era loans. We’re calling on them—as we’ve done for the past year—to give entrepreneurs and small businesses more time to pay them back. We don’t think the government should penalize those hit hardest by the pandemic when all they ever wanted was to keep the lights on, keep people employed, and get back to business,” said the Canadian Chamber of Commerce’s senior vice-president of government relations Matthew Holmes in a statement.

When the initial extension was announced, the government said outstanding loans after the 2023 deadline would be converted to two-year term loans with a five per cent interest rate, starting on Jan. 1, 2024, with the loans due in full by Dec. 31, 2025.

The federal government’s CEBA-dedicated webpage states that as it stands, all application outcomes and repayment deadlines “are now final and cannot be changed.”

 

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Before the Bell: Futures slip as losing month for stocks nears a close – The Globe and Mail

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Metrolinx Eglinton Crosstown opening date delayed – CTV News Toronto

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Canada's population added 1.15 million people since last year: StatsCan – CBC News

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