PENTICTON, BC:Political parties, small businesses, and many Canadian Chambers of Commerce are calling on the federal government to extend the deadline for the Canada Emergency Business Account (CEBA) loan.
Only five months are left until the CEBA repayment deadline on Dec. 31, 2023. If the CEBA loan is not repaid by then, small business owners will lose the up to $20,000 forgivable portion and pay the entire amount at a 5% interest rate.
In a letter sent by over 250 Canadian chambers of commerce, they noted that 49 per cent of businesses are still making below-normal revenues and 50 per cent of Canadian food services are currently operating at a loss or breaking even, compared to 12 per cent pre-pandemic.
The joint letter was sent to Deputy Prime Minister Chrystia Freeland calling for more time to repay CEBA loans while keeping the forgivable portion.
The letter mentions that almost 900,000 CEBA loans were approved across Canada. Many businesses had no choice but to take on this loan due to circumstances beyond their control. This includes businesses in some of the hardest-hit industries such as the retail industry and tourism sector.
Mandatory business closures and other government health restrictions left businesses with severe income losses and cash flow issues. Despite their best efforts, high-interest rates, inflation and increased labour costs are making it difficult for small-and-medium size businesses to keep their heads above water, let alone make any dent in the debt many had to take on to survive pandemic restrictions.
A recent analysis of over 15,000 Canadian businesses found that inflation, input costs, and interest/debt costs are the three most acute obstacles faced by business (at 56%, 40% and 38%, respectively), and the smaller the firm, the more constrained they are by debt, the letter mentions.
Corinne Pohlmann, Executive Vice-President at CFIB said, “We’re not asking for total loan forgiveness—just more time. If businesses are forced to close because of their pandemic debt, government will not be able to recoup that money. It’s a win-win situation if businesses are allowed more time to repay.”
“The pressure is growing for the Liberals to act and help small businesses get through these tough times,” said NDP critic for small business and tourism, MP Richard Cannings (South Okanagan—West Kootenay). “These businesses are getting squeezed, and the Liberals are leaving them to fend for themselves. Instead of ignoring these calls, New Democrats are here to help and secure an extension.”
“Enough is enough. Summer tourism is almost over, and we need to have these businesses’ backs now more than ever. The NDP will keep standing up for those who have contributed so much to our country and keep pushing for an extension on repayment,” Cannings said.
