Businesses across Canada plead with finance minister to extend emergency loan repayment deadline
Business groups across Canada are pleading with the federal government to grant them more time to pay back emergency loans offered during the COVID-19 pandemic.
In a new letter to Deputy Prime Minister and Finance Minister Chrystia Freeland, organizations representing hundreds of thousands of small businesses are calling for another year or two to pay back their Canada Emergency Business Account (CEBA) loans.
"Many businesses had no choice but to take on this loan due to circumstances beyond their control… With each passing day, entrepreneurs who collectively maintain a very considerable workforce, face increasingly daunting financial pressure," reads the letter, provided to CTV News. "Ottawa needs to act now to extend the CEBA repayment deadline."
The federal government created CEBA early in the pandemic as one of a suite of financial aid measures aimed at keeping businesses afloat in the face of forced closures and health restrictions. Offering initially up to $40,000 to small businesses and non-profits who have experienced a loss of revenue due to COVID-19, an expansion was then offered, seeing businesses able to apply to receive up to $60,000 interest-free loans.
Open for applications between April 2020 and June 2021, the loans were approved for 898,271 businesses, totalling $49.2 billion in federal assistance.
In January 2022, in the wake of the Omicron variant surge and new restrictions, the Liberals announced they would be extending the repayment deadline by a year to the end of 2023. This meant that eligible businesses "in good standing" would have until Dec. 31, 2023 to repay and be eligible for debt forgiveness of one-third—up to $20,000—of their loan.
Monday’s letter—signed by more than 250 local chambers of commerce, tourism, and industry groups across Canada—indicates that while the government gave business in crisis a lifeline with these loans, years later many still are treading water in their post-pandemic recoveries. This has left them unable to make much more than a dent in the debt they've taken on, in the face of supply chain and hiring woes, as well as high inflation.
Now, businesses want to see the repayment deadline extended by two years to the end of 2025, or at least by one year, while maintaining access to the forgivable portion of their loans.
"Unless the federal government acts quickly to postpone the CEBA repayment deadline, businesses that are unable to repay their CEBA loan in time will lose access to the forgivable portion… thus further increasing their debt load," the letter reads.
"Extending the repayment timeline for the CEBA loan without losing access to the forgivable portion would give many small-and-medium size businesses the stability and certainty they need to get back on their feet on a path to prosperity."
Among the signatories are the Tourism Industry Association of Canada, the Canadian Craft Brewers Association, the Canadian Home Builders’ Association and Restaurants Canada.
The letter warns that without leniency many local businesses—particularly in the tourism sector—that federal government doled out billions to help save, could be forced to close.
"The ideal situation would be to give these businesses another two years and just give them some breathing room… These are our neighbours. These are the businesses that fill our main streets, that are in every community. They provide services and employment in every community across the country," said Beth Potter, president and CEO of the Tourism Industry Association of Canada, in an interview on The Vassy Kapelos Show.
Potter said Freeland not heeding this call would be "perhaps a little short-sighted" as businesses have "every intention" to pay the loans back, but many "just need a little bit more time in order to ensure that they do so in a way that’s not going to put them out of businesses."
According to recent surveys of CEBA loan-holders, 49 per cent of small businesses are still making below-normal revenues, some restaurants are still operating at a loss or just breaking even, and without government intervention 45 per cent of tourism businesses are likely or somewhat likely to be forced to shutter within the next three years.
"We're not asking the government for an amnesty on COVID-era loans. We're calling on them—as we’ve done for the past year—to give entrepreneurs and small businesses more time to pay them back. We don’t think the government should penalize those hit hardest by the pandemic when all they ever wanted was to keep the lights on, keep people employed, and get back to business," said the Canadian Chamber of Commerce's senior vice-president of government relations Matthew Holmes in a statement.
NDP Leader Jagmeet Singh has also called on the federal government to extend the deadline.
“It’s not fair to local shop owners that the Liberals keep saying they have businesses’ backs when, in reality, they’ve only been looking out for ultra-rich corporations,” Singh said in a statement last week, ahead of meetings with small business owners in Toronto to discuss pushing back the repayment date.
“These business owners aren’t asking for a free-ride; they just need a little more time to get back on their feet,” he also said. “Helping out hardworking small businesses and the communities who depend on them is the very least the government should do.”
When the initial extension was announced, the government said outstanding loans after the 2023 deadline would be converted to two-year term loans with a five per cent interest rate, starting on Jan. 1, 2024, with the loans due in full by Dec. 31, 2025.
The federal government's CEBA-dedicated webpage states that as it stands, all application outcomes and repayment deadlines "are now final and cannot be changed."
As of May 31, approximately 21 per cent of businesses that received a CEBA loan, had fully repaid. The government anticipates that as the deadline approaches, more businesses will be in a position to repay their loans in full.
In a statement to CTV News, Freeland’s office said CEBA was "central to ensuring Canadian small businesses were able to not only survive the pandemic but thrive in the recovery," but offered no indication the minister is considering extending the loan repayment deadline.
"We are very aware of the concerns expressed in today’s letter and we remain in contact with a number of these organizations," said Freeland’s senior communications advisor Katherine Cuplinskas.
IN DEPTH
Budget 2024 prioritizes housing while taxing highest earners, deficit projected at $39.8B
In an effort to level the playing field for young people, in the 2024 federal budget, the government is targeting Canada's highest earners with new taxes in order to help offset billions in new spending to enhance the country's housing supply and social supports.
'One of the greatest': Former prime minister Brian Mulroney commemorated at state funeral
Prominent Canadians, political leaders, and family members remembered former prime minister and Progressive Conservative titan Brian Mulroney as an ambitious and compassionate nation-builder at his state funeral on Saturday.
'Democracy requires constant vigilance' Trudeau testifies at inquiry into foreign election interference in Canada
Prime Minister Justin Trudeau testified Wednesday before the national public inquiry into foreign interference in Canada's electoral processes, following a day of testimony from top cabinet ministers about allegations of meddling in the 2019 and 2021 federal elections. Recap all the prime minister had to say.
As Poilievre sides with Smith on trans restrictions, former Conservative candidate says he's 'playing with fire'
Siding with Alberta Premier Danielle Smith on her proposed restrictions on transgender youth, Conservative Leader Pierre Poilievre confirmed Wednesday that he is against trans and non-binary minors using puberty blockers.
Supports for passengers, farmers, artists: 7 bills from MPs and Senators to watch in 2024
When parliamentarians return to Ottawa in a few weeks to kick off the 2024 sitting, there are a few bills from MPs and senators that will be worth keeping an eye on, from a 'gutted' proposal to offer a carbon tax break to farmers, to an initiative aimed at improving Canada's DNA data bank.
Opinion
opinion Don Martin: Gusher of Liberal spending won't put out the fire in this dumpster
A Hail Mary rehash of the greatest hits from the Trudeau government’s three-week travelling pony-show, the 2024 federal budget takes aim at reversing the party’s popularity plunge in the under-40 set, writes political columnist Don Martin. But will it work before the next election?
opinion Don Martin: The doctor Trudeau dumped has a prescription for better health care
Political columnist Don Martin sat down with former federal health minister Jane Philpott, who's on a crusade to help fix Canada's broken health care system, and who declined to take any shots at the prime minister who dumped her from caucus.
opinion Don Martin: Trudeau's seeking shelter from the housing storm he helped create
While Justin Trudeau's recent housing announcements are generally drawing praise from experts, political columnist Don Martin argues there shouldn’t be any standing ovations for a prime minister who helped caused the problem in the first place.
opinion Don Martin: Poilievre has the field to himself as he races across the country to big crowds
It came to pass on Thursday evening that the confidentially predictable failure of the Official Opposition non-confidence motion went down with 204 Liberal, BQ and NDP nays to 116 Conservative yeas. But forcing Canada into a federal election campaign was never the point.
opinion Don Martin: How a beer break may have doomed the carbon tax hike
When the Liberal government chopped a planned beer excise tax hike to two per cent from 4.5 per cent and froze future increases until after the next election, says political columnist Don Martin, it almost guaranteed a similar carbon tax move in the offing.
CTVNews.ca Top Stories
'The world is too messy for bureaucratic hurdles': Canada still bars Afghanistan aid
Ottawa has plans to finally stop blocking Canadian development aid to Afghanistan this year.
Student anti-war protesters dig in as faculties condemn university leadership over calling police
Students protesting the Israel-Hamas war at at universities across U.S., some of whom have clashed with police in riot gear, dug in Saturday and vowed to keep their demonstrations going, while several school faculties condemned university presidents who have called in law enforcement to remove protesters.
Toxic testing standoff: Family leaves house over air quality
A Sherwood Park family says their new house is uninhabitable. The McNaughton's say they were forced to leave the house after living there for only a week because contaminants inside made it difficult to breathe.
Hamas is reviewing an Israeli proposal for a ceasefire in Gaza, as possible Rafah offensive looms
Hamas said Saturday it was reviewing a new Israeli proposal for a ceasefire in Gaza, as Egypt intensified efforts to broker a deal to end the months-long war and stave off a possible Israeli ground offensive into the southern Gaza city of Rafah.
Cisco reveals security breach, warns of state-sponsored spy campaign
State-sponsored actors targeted security devices used by governments around the world, according to technology firm Cisco Systems, which said the network devices are coveted intrusion points by spies.
I just don't get Taylor Swift
It's one thing to say you like Taylor Swift and her music, but don't blame CNN's AJ Willingham's when she says she just 'oesn't get' the global phenomenom.
opinion RFK Jr.'s presidential candidacy and its potential threat to Biden and Trump
Although it's still unclear how much damage Robert F. Kennedy Jr.'s candidacy can do to either Joe Biden or Donald Trump this election, Washington political columnist Eric Ham says what is clear is both sides recognize the potential threat.
More than 115 cases of eye damage reported in Ontario after solar eclipse
More than 115 people who viewed the solar eclipse in Ontario earlier this month experienced eye damage after the event, according to eye doctors in the province.
Russia renews attacks on the Ukrainian energy sector as Kyiv launches drones at southern Russia
Russia launched a barrage of missiles against Ukraine overnight, in attacks that appeared to target the country's energy infrastructure. Meanwhile, Russia said its air defense systems had intercepted more than 60 Ukrainian drones over the southern Krasnodar region.
Local Spotlight
DonAir force takes over at Oilers playoff games
As if a 4-0 Edmonton Oilers lead in Game 1 of their playoff series with the Los Angeles Kings wasn't good enough, what was announced at Rogers Place during the next TV timeout nearly blew the roof off the downtown arena.
'It was instant karma': Viral video captures failed theft attempt in Nanaimo, B.C.
Mounties in Nanaimo, B.C., say two late-night revellers are lucky their allegedly drunken antics weren't reported to police after security cameras captured the men trying to steal a heavy sign from a downtown business.
Fergus, Ont. man feels nickel-and-dimed for $0.05 property tax bill
A property tax bill is perplexing a small townhouse community in Fergus, Ont.
Twins from Toronto were Canada's top two female finishers at this year's Boston Marathon
When identical twin sisters Kim and Michelle Krezonoski were invited to compete against some of the world’s most elite female runners at last week’s Boston Marathon, they were in disbelief.
Mystery surrounds giant custom Canucks jerseys worn by Lions Gate Bridge statues
The giant stone statues guarding the Lions Gate Bridge have been dressed in custom Vancouver Canucks jerseys as the NHL playoffs get underway.
'I'm committed': Oilers fan won't cut hair until Stanley Cup comes to Edmonton
A local Oilers fan is hoping to see his team cut through the postseason, so he can cut his hair.
'It's not my father's body!' Wrong man sent home after death on family vacation in Cuba
A family from Laval, Que. is looking for answers... and their father's body. He died on vacation in Cuba and authorities sent someone else's body back to Canada.
'Once is too many times': Education assistants facing rising violence in classrooms
A former educational assistant is calling attention to the rising violence in Alberta's classrooms.
What is capital gains tax? How is it going to affect the economy and the younger generations?
The federal government says its plan to increase taxes on capital gains is aimed at wealthy Canadians to achieve “tax fairness.”