COVID debt, rising costs and lack of sales pose major challenges to a small business recovery
by Morinville Online Staff
With all COVID support programs for businesses ending May 7, the Canadian Federation of Independent Business is calling on the federal government to help the hardest-hit small and medium enterprises (SME) deal with their COVID-related debt by increasing the forgivable portion of their Canadian Emergency Business Account loan to at least 50 per cent and extending the repayment deadline beyond December 2023.
A new CFIB survey indicates continued challenges and a long road to recovery, with only 40 per cent of respondents back to normal revenues for this time of the year. The same survey indicates only 27 per cent of businesses reporting they are fully recovered.
“Two-thirds of small businesses (65%) have had to take on debt, at an average of $160,000, just to survive the past two-years,” said CFIB president Dan Kelly in media release. “For almost 900,000 business owners, up to $60,000 of this debt is in the form of a government-backed Canada Emergency Business Account loan.”
Kelly said the 2022 federal budget missed an opportunity to forgive a larger portion of CEBA loans for the most deeply affected small businesses.
CFIB notes many Canadian businesses are also facing significant challenges from rising costs for energy, inputs and insurance (90%) or hikes to government-imposed costs for carbon and payroll taxes (82%).
In addition to calling on the feds to increasing the forgivable portion of their CEBA loan to at least 50% and extend the repayment deadline beyond December 2023, they are also asking government to help new businesses that were excluded from the CEBA program and to forgive a portion of other federal COVID-19 loan programs, including HASCAP.
Small business owners are asked to add their voice to CFIB’s petition calling for more debt relief at cfib.ca/covidpetition.