Small businesses 'being walloped by rising inflation and interest rates'
The premiers of all Canadian provinces and territories have called on the federal government to extend the deadline for businesses to repay their Canada Emergency Business Account (CEBA) loans in order to access the forgivable portion.
They are asking for the deadline to be extended by a full year.
“We are urging your government to provide additional time to allow businesses to take advantage of the loan forgiveness option in addition to extending repayment of CEBA loans for another year,” read part of the letter – signed by all premiers – sent to Prime Minister Justin Trudeau on Friday.
“More time is needed to allow the hardest hit small businesses to continue their recovery from not only the pandemic, but the cost shocks that came after.”
"The same loan that was once a lifeline during the pandemic is now threatening to sink the small businesses that are only just getting by," read part of the letter, according to a CBC report.
CEBA deadline moved to Jan. 18, 2024
This comes after, in mid-September, the federal government moved the deadline for the repayment for partial loan forgiveness of up to 33 per cent under the CEBA to Jan. 18, 2024. Also, for CEBA loan holders who make a refinancing application with the financial institution that provided their CEBA loan by Jan. 18, 2024, the repayment deadline to qualify for partial loan forgiveness now includes a refinancing extension until March 28, 2024, according to the government.
However, in announcing that extension, Ottawa “failed to address the most critical issue on outstanding CEBA loans - the loss of the $20,000 forgivable portion for those unable to repay the loans by year end,” said Dan Kelly, president and CEO of the Canadian Federation of Independent Business (CFIB).
“Canadians are feeling squeezed by the rising cost of housing, groceries and other daily essentials. It’s no different for small businesses,” said British Columbia Premier David Eby. “Just when many small businesses are starting to find their feet after the pandemic, they’re now being walloped by rising inflation and interest rates. That’s why I’m joining other premiers in asking the federal government to give small businesses a chance to recover with more time to qualify for loan forgiveness and by extending CEBA loan repayments for another year.”
“Whether it’s homeowners and renters, or small businesses struggling to recover, we need to support people in these difficult times,” he said.
Stakeholders welcome premiers’ call
Now, the CFIB welcomed the premiers’ call for extension.
“Canada’s Premiers are clearly listening. CFIB is calling on federal leaders to do the same,” said Kelly.
He noted that many small businesses continue to struggle even though we are past the pandemic.
“CFIB has been lobbying everyone who will listen on the urgency of extending the forgivable deadline by a year – pushing it to December 31, 2024. Most small firms have yet to recover from two years of on-and-off COVID restrictions. Only half of small firms are back to 2019 levels of sales and the average business has taken on $100,000 in new debt just to survive.
“If Ottawa can find billions of funding for giant multinational car companies in the matter of weeks, surely it can allow Canada’s small businesses more time to repay a loan they were forced to take on just to survive the pandemic.”
Canada’s New Democratic Party (NDP) liked the premiers’ move, but also took a hit at the federal government.
“Small businesses are integral to communities across Canada, and the federal government has failed them in so many ways,” said Richard Cannings (South Okanagan – West Kootenay), NDP critic for small business. “The Liberals have no problem giving favours and handouts to ultra-rich CEOs while leaving small businesses and their workers behind. We welcome the Premiers’ call on the feds to deliver relief for small businesses on their CEBA loan. New Democrats urge the federal government to heed this call, show leadership and act.”
CEBA was part of the federal government’s COVID-19 Economic Response Plan, which helped Canadians and businesses deal with the economic impacts of the COVID-19 pandemic. Ottawa previously expanded the CEBA to cover more Canadians and businesses who were facing difficult challenges as a result of the health crisis.