Business groups gave a mixed reaction to Prime Minister Justin Trudeau’s announcement Thursday that the initial repayment deadline for loans under the Canada Emergency Business Account (CEBA) program will be extended to Jan. 18, 2024.
The final deadline will be extended by a year to Dec. 31, 2026.
Trudeau made the announcement Thursday at the Liberal caucus retreat in London, Ont.
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The Canadian Chamber of Commerce applauded the move.
“Today’s CEBA announcement signals that the government has heard the business community and is responding to some of the challenges of the current economic environment,” said chamber president and CEO Perrin Beatty in a statement.
“It would be tragic to see businesses that survived the pandemic having to close now. That is why the Canadian chamber joined our network of local chambers of commerce and boards of trade, along with other business associations and thousands of individual businesses across Canada, in calling for an extension to the CEBA repayment deadline.”
The chamber cites the current environment that has “presented unprecedented challenges that make it difficult for many businesses to stay afloat, let alone thrive.
“High interest rates, inflation and increased labour costs are just some of the obstacles businesses continue to face after surviving pandemic restrictions,” the statement read.
However, the Canadian Federation of Independent Business (CFIB) said it was disappointed with the announcement.
In a statement, CFIB president Dan Kelly said, “The government has 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. 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.”
According to CFIB’s latest data, 69 per cent of small businesses that accessed the loan have not yet been able to repay any of it. Only 18 per cent have repaid their loan in full as of September.
“It is helpful that the government has given business owners an additional year to repay the full balance of the loan, but the plan misses the most central issue – the loss of the forgivable portion,” the statement read.
Earlier CFIB data found that losing the forgivable portion puts the future of up to 250,000 small businesses in jeopardy.
The Ottawa Coalition of Business Improvement Areas (OCOBIA) came out in support of the announcement on LinkedIn.
Last month, a spokesperson for Finance Minister Chrystia Freeland suggested to OBJ that the government was unlikely to reconsider the deadlines, even as local advocates weren’t giving up hope that the federal government would extend the upcoming deadline for partial loan forgiveness.
“When the COVID-19 pandemic hit, the federal government acted swiftly to provide emergency support and ensure that Canadians and Canadian businesses could weather the storm,” Katherine Cuplinskas, Freeland’s senior communications adviser, said in a statement to OBJ.
“The (Canada Emergency Business Account) programme, which delivered over $49 billion to more than 890,000 small businesses and non-profits across the country, was an essential part of that effort.”
The CEBA program allowed businesses to receive interest-free loans of up to $60,000, of which up to $20,000 would be forgiven if the business repaid the outstanding balance by the end of 2023. Otherwise, the debt would be converted to a two-year loan with interest of five per cent annually. The initial deadline of Dec. 31, 2022 was extended by the federal government by one year.
