Tina Hamlin, who runs a home decor company in Vancouver, was initially elated when she heard the federal government will allow small businesses an extra year to repay a loan given to them during the pandemic.
Amid a series of other announcements on the housing crisis and rising food prices, Prime Minister Justin Trudeau on Sept. 14 said the extension on Canada Emergency Business Account (CEBA) loans will provide small businesses with a “bit more runway” to pay them back as dozens of his party’s members applauded the announcement on air.
Thrilled with what she saw on the news, Hamlin decided to go online and dig a little deeper. A few minutes later, her excitement fizzled as she realized the extension ignored a key aspect of the loan: the forgiveness grant.
CEBA extension falls short
CEBA offered interest-free loans of up to $60,000 to small businesses and not-for-profits until June 2021 to help them tackle the economic impacts of the pandemic. In total, $49.2-billion worth of loans to around 900,000 businesses were made under the program.
Repaying this loan by Dec. 31, 2023, would have allowed businesses to receive a loan forgiveness grant of up to $20,000. If companies fail to meet the deadline, however, they will be charged interest of five per cent per year and the full principal would be due Dec. 31, 2025.
Several business groups urged Ottawa to extend the repayment deadline along with access to the forgiveness grant by at least a year because thousands of small businesses warned they have yet to recover financially and are staring at bankruptcy.
The government responded this week by extending the overall loan repayment deadline by a year to Dec. 31, 2026. But the deadline to meet the condition for the forgiveness grant of up to $20,000 was increased by just 18 days, from Dec. 31, 2023, to Jan. 18, 2024.
“This doesn’t seem helpful at all. Really, it’s just lipstick on a pig,” Hamlin said. “They are not really making any difference here. I am very disappointed. It doesn’t seem like they really understand the gravity of the situation. We have been feeling like we have been in a recession for the last six months.”
In addition to rising prices and consumer spending declines, Hamlin’s business, Coast Consignment, which is a source for design props in movies, has been impacted by the ongoing Hollywood labour strikes, which she said has hurt about 25 per cent of her monthly sales. She said she would have to take yet another loan to receive the forgivable grant.
Losing the forgivable portion of the loan would put nearly 250,000 small businesses in jeopardy, according to a survey conducted earlier this year by the Canadian Federation of Independent Business (CFIB), which has 97,000 members, making it Canada’s largest association of small and medium-sized businesses.
“The extension of the forgivable deadline by a few weeks will be of very little value to the thousands of small business owners who just don’t have money to repay now,” CFIB’s chief executive Dan Kelly said in a statement on Sept. 14.
He added that the additional year to repay the full balance is helpful, but the plan “misses the most central issue.”
Almost 70 per cent of small businesses that accessed the loan have not been able to repay any of it yet, according to an ongoing CFIB study. Only 18 per cent had repaid their loan in full as of September.
Shara Vigeant, who runs a fitness centre in Edmonton, said the extension was “laughable.” She expects several small businesses to go bankrupt under the current plan, and said extending the forgivable deadline would have ensured the government gets some money back rather than nothing.
“It’s almost like a slap in the face,” she said. “What are 18 days going to do for a business that has been struggling for the last two to three years. Eighteen days is nothing. The people who have been making these policies or changing these deadlines have never run a small business before.”
Angela Pollak, chair of a business association in South Algonquin, Ont., a town with a population of about 1,000 people, echoed a similar sentiment and said the extension wouldn’t benefit businesses in rural places where the recovery has been “precarious and incomplete” at best.
“They would have been better off not making any changes at all,” she said.
TTC riders in Toronto’s downtown core now have access to 5G service.
In a Monday media release, representatives for Rogers said customers of all major Canadian wireless companies can connect to 5G to talk, text, and stream on Toronto’s subway system.
Service extends to all stations and tunnels in the downtown U (between Bloor-Yonge and Spadina, as well as Dupont Station), as well as in 13 stations between Keele and Castle Frank, plus the tunnels between St. George and Yonge stations.
The announcement comes a day earlier than anticipated, as the federal deadline given to Rogers to implement the extended service for all mobile customers was originally slated for Tuesday.
Rogers customers have had 5G connection in the aforementioned stations and tunnels since August, a decision that sparked ire in the telecommunications space, particularly from rivals Telus and Bell.
“Our dedicated team of technologists designed and introduced an immediate solution that added capacity, so Bell and Telus could join the network,” Ron McKenzie, chief technology and information officer for Rogers, said.
“For over 10 years, subway riders have been without mobile phone services and the Rogers team is pleased to step up and make 5G a reality for all riders today.”
In a statement shared with CP24, representatives for Telus said, “we are pleased to launch service for all our customers in connected TTC subway tunnels and stations. Now, TELUS customers can browse the Internet, talk and text, staying connected and safe on Toronto transit. We’ll be working hard to expand the number of stations and tunnels covered in the coming months.”
“We would like to thank Minister Champagne for his leadership in ensuring that all wireless carriers have the ability to serve their customers in Toronto’s subway system, and that Rogers can no longer delay the deployment of wireless service for all TTC riders regardless of their choice of carrier,” representatives for Bell shared in an afternoon statement.
“Bell looks forward to working collaboratively with our partners to build out the remainder of the TTC’s wireless network.”
Toronto Mayor Olivia Chow responded to today’s news in a tweet.
“Happy to hear that all 3 major telecoms have unrolled service to downtown stations,” she wrote.
“The work continues to expand service to the rest of the TTC subway system. François-Philippe Champagne and I will work to make sure it happens quickly.”
CP24 and CTV News Toronto are owned by Bell Media.
TORONTO — A week after a system crash blacked out much of the services offered by Laurentian Bank (TSX:LB), the financial institution announced on Monday the departures of president and CEO Rania Llewellyn and board of directors chair Michael Mueller.
The bank said Monday that Eric Provost, most recently head of personal and commercial banking, has moved into the role of president and chief executive with immediate effect.
Provost replaces Llewellyn, who became the first woman to lead a major Canadian bank when she took on the role three years ago.
Montreal-based Laurentian also said director Michael Boychuk has been appointed chair of its board of directors, replacing Mueller, who resigned from the board.
The bank said on Monday that it had restored most services, but that access might still be slow or intermittent because of the number of people trying to access services. It said it was also still working to restore some functions.
In a letter to customers, Provost said the bank would be reversing monthly service fees for September, and opening some branches on Monday despite the statutory federal holiday as the bank tries to resolve the issues.
“We understand how precious your trust is, and we recognize that we have not delivered on it,” said Provost in the letter.
“My sincerest apologies for the inconvenience this outage may have caused you, your family, and your company.”
The bank said it would also work with clients who may have missed payments because of the outage, including help if someone’s credit score was affected because they couldn’t access their money.
For a while, Sam Bankman-Fried tried to convince politicians and the public that he was the next J.P. Morgan. Now, he has to convince a jury that he wasn’t, in reality, the next Bernie Madoff.
The trial of Bankman-Fried, the founder of the failed cryptocurrency brokerage FTX, will begin Tuesday with jury selection. Prosecutors from the Southern District of New York are expected to lay out a case against Bankman-Fried that alleges he stole billions of dollars in FTX customer deposits and used the money to fund his hedge fund, buy real estate, and make millions of dollars of illegal campaign donations to Democrats and Republicans in an attempt to buy influence over cryptocurrency regulation in Washington.
While the case will involve the complicated world of cryptocurrencies, prosecutors are expected to try to boil it down to the simplest of terms for jurors: Bankman-Fried took money from customers and used it in ways he wasn’t supposed to.
“Prosecutors are going to say, ‘look at where the money went and how it was spent,'” said Michael Zweiback, co-founder of the law firm Zweiback, Fiset & Zalduendo LLP, and a former federal prosecutor. “This case is less about the complicated investments and all about garden-variety fraud.”
From humble beginnings to having billions on paper
Before FTX collapsed and filed for bankruptcy last November, Bankman-Fried was one of the most powerful people in the cryptocurrency industry. “SBF” had an estimated net worth of $32 billion US last year, at least on paper. He interacted with former presidents, politicians on both sides of the aisle, celebrities, and CEOs. When smaller crypto firms started imploding in early 2022, Bankman-Fried told the public he would help prop up the market, prompting the comparisons with J.P. Morgan.
The 31-year-old Bankman-Fried founded FTX in 2019, and it grew rapidly. The son of Stanford University professors, who was known to play the video game League of Legends during meetings, Bankman-Fried attracted investments from the highest echelons of Silicon Valley. FTX quickly became the second-largest crypto brokerage behind Binance.
Bankman-Fried and his inner circle of executives ran their then-growing crypto empire from The Bahamas, out of the luxury apartment complex Albany, where celebrities like Tiger Woods and Justin Timberlake have vacation homes.
FTX had effectively two lines of business: a brokerage where customers could deposit, buy, and sell cryptocurrency assets on the FTX platform, and an affiliated hedge fund known as Alameda Research, which took highly speculative positions in various cryptocurrency investments.
As Alameda started to pile up losses during last year’s cryptocurrency market declines, prosecutors allege Bankman-Fried directed funds to be moved from FTX’s customer accounts to Alameda to plug holes in the hedge fund’s balance sheet.
The U.S. government has charged Samuel Bankman-Fried, the founder of now-defunct cryptocurrency exchange FTX, with a host of financial crimes after being arrested in the Bahamas. He faces decades in prison if convicted.
The house of cards that Bankman and his lieutenants built came crashing down in early November, when reports surfaced about the condition of Alameda’s balance sheet. Spooked investors, who had already seen several crypto firms collapse during the year, quickly pulled their money out of FTX and within days the firm was bankrupt.
John Ray III, the restructuring expert who was tasked with cleaning up FTX in bankruptcy, described the conditions inside of FTX as worse than Enron, long considered the benchmark for corporate malfeasance in popular culture.
Bankman-Fried is expected come face-to-face with his former lieutenants at FTX for the first time since its collapse.
Several of them have agreed to plead guilty to lesser crimes in exchange for testifying against him. This includes Caroline Ellison, who was the CEO of Alameda and Bankman-Fried’s off-and-on girlfriend, as well as FTX co-founder Gary Wang.
Ryan Salame, another top executive at FTX, pleaded guilty on Sept. 7 to making illegal campaign contributions to Republicans on behalf of Bankman-Fried, who was publicly making contributions to Democrats. It is not known whether Salame will testify against Bankman-Fried.
Ellison is expected to be the prosecution’s central witness. Prosecutors are likely to count on her to demonstrate that the collapse of FTX was not due to a few mistakes, as Bankman-Fried alleges, but to fraud. She has previously said in a statement through her lawyers that she knew funnelling FTX customers’ money into Alameda was wrong.
“I expect the government is going to be able to show that Bankman-Fried knew what he was doing was wrong, and here are the people in the room who can corroborate that story,” said Christine Adams, a former federal prosecutor and a partner at Adams, Duerk & Kamenstein.
The defence is expected to argue that while Bankman-Fried made some mistakes, the mistakes do not amount to fraud and FTX was just the latest casualty in the broad collapse of the cryptocurrency market last year. Until he had his computer privileges taken away by the presiding judge in the case, Bankman-Fried himself spent months reaching out to reporters and posting on social media to explain his actions.
Before his bail was revoked, Bankman-Fried had been permitted to live with his parents in their Palo Alto, Calif., home with strict rules limiting his access to electronic devices. Bankman-Fried was ordered to be jailed after Judge Lewis A. Kaplan said there was probable cause to believe he was trying to tamper with potential witnesses, including Ellison, in the case.
Crypto winter underway
Broadly, the crypto industry has still not recovered since FTX’s collapse. The prices of Ethereum and Bitcoin, the two most widely used cryptocurrencies, are still down two-thirds from where they were a year ago and the volume of trading in crypto is half what it was. The market for NFTs, artificially scarce digital objects meant to create unique digital versions of memorabilia or photographs, has all but evaporated. Roughly 3,000 NFTs trade hands daily now, compared to more than 40,000 a day a year ago, according to NonFungible.com.
Even Bankman-Fried’s former competitors are facing their own legal scrutiny. This summer the Securities and Exchange Commission brought charges against Binance and its founder Changpeng Zhao similar to the allegations against FTX, including commingling of customer funds with the firm’s investments. Coinbase, the publicly traded crypto exchange, has also been charged by the SEC with securities violations.