by Morinville Online Staff
Industry associations representing hundreds of thousands of businesses across Canada have sent a joint letter to the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, urging the government to extend the current Canada Emergency Business Account (CEBA) repayment deadline. The letter calls for an extension of two years until the end of 2025, or at least one year, while maintaining access to the forgivable portion.
The letter writers point out the CEBA program had been crucial in supporting businesses during the pandemic, with almost 900,000 loans approved across the country. Many businesses, especially those in the hardest-hit industries like retail and tourism, had no choice but to take on these loans due to the severe income losses and cash flow challenges caused by mandatory closures and government health restrictions.
However, the letter states that ongoing economic challenges make it difficult for small and medium-sized businesses to repay the loans on time, and that rising interest rates, inflation, and increased labour costs are putting immense financial pressure on entrepreneurs.
A recent analysis of over 15,000 Canadian businesses highlighted that inflation, input costs, and interest/debt costs are the three most acute obstacles businesses face, with smaller firms being more constrained by debt.
The surveys focused on companies that received CEBA loans and revealed concerning statistics. Almost half of small businesses are still making below-normal revenues, while half of Canadian food service operators are currently operating at a loss or breaking even compared to pre-pandemic levels. Additionally, 45% of Canada’s tourism businesses are at risk of closing within the next three years due to mounting debt.
In the letter, the industry associations collectively stressed that unless the federal government acts quickly to extend the CEBA repayment deadline, businesses struggling to repay their loans on time will lose access to the forgivable portion of up to $20,000, further exacerbating their financial burden.
To provide stability and certainty for small and medium-sized businesses on the path to recovery, the associations are urging the government to extend the repayment timeline without losing access to the forgivable portion. They emphasize that such an extension is crucial to ensure these businesses can get back on their feet and move towards prosperity.
The joint letter was signed by various industry associations, including the Canadian Federation of Independent Business, Alberta Chambers of Commerce, Greater Toronto Hotel Association, British Columbia Restaurant and Foodservices Association, and many others.