Canada's premiers are calling on the federal government to push back the deadline for businesses to repay their government-backed pandemic loans in order to access the forgivable portion.
The Canada Emergency Business Account (CEBA) was introduced at the height of the pandemic to help out small businesses forced to close or limit their operations due to public health measures. The program offered interest-free loans backed by the federal government.
A business could apply for up to $60,000 through the program. Up to $20,000 would be forgiven if the rest was repaid by a certain date.
In a letter to Prime Minister Justin Trudeau, all 13 provincial and territorial premiers asked Ottawa to extend that deadline.
"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," the letter reads.
The government recently granted a small extension to the deadline, moving it from December of this year to Jan. 18, 2024. Many businesses have called for the deadline to be delayed by a full year.
The premiers are now calling for a full year extension. They argue in their letter that small businesses are being hit with new costs pressures from inflation and higher interest rates.
In an interview with CBC News that was conducted prior to the letter being made public, federal Small Business Minister Rechie Valdez wouldn't say if the government is considering another extension.
Valdez did say she has been touring the country listening to small businesses in recent weeks, and plans to report back to cabinet on what could be done to help those that are struggling.
"I will continue to advocate for small businesses and even think about different options that are available at our disposal," she said.
When asked if those options include another CEBA extension, the minister was tight-lipped.
"There's several options," she said. "But it's more for me to bring back and then see what's viable with both our departments as well as with cabinet."
Nearly 900,000 businesses were approved for the program, which distributed just over $49 billion in loans. About a fifth had paid back their loans in full by the end of June.
The government is giving businesses looking to refinance their CEBA loans until March 28 to qualify for the forgivable portion. But some businesses fear that a new loan to cover the forgivable portion of CEBA will come with higher interest rates.
Kelly Higginson, president of Restaurants Canada, said the premiers' letter came as a "relief."
"The short-sighted CEBA announcement a month ago was, for a lot of operators, the last nail in the coffin," she said. "So it is really a relief to see this call to action by the premiers."
Higginson said she has had "productive meetings" with Valdez since she was appointed small business minister in July and trusts that she will bring what she's heard from small businesses back to Ottawa.
"The challenge is what happens from there," Higginson said.
The Canadian Federation of Independent Business (CFIB), another group that has been advocating for a year-long extension, welcomed the premiers' support on Friday.
"We are heartened that all 13 of Canada's premiers have sent a letter to the prime minister endorsing our recommendation," CFIB president Dan Kelly said in a media statement.
Kelly said that many of CFIB's member businesses have yet to return to pre-2019 sales levels.
"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," he said.
The federal New Democrats also welcomed the premiers' letter.
"New Democrats urge the federal government to heed this call, show leadership and act," NDP small business critic Richard Cannings said in a media statement.
https://news.google.com/rss/articles/CBMiY2h0dHBzOi8vd3d3LmNiYy5jYS9uZXdzL3BvbGl0aWNzL3ByZW1pZXJzLWNhbGxpbmctZm9yLWNlYmEtZm9yZ2l2ZW5lc3MtZGVhZGxpbmUtZXh0ZW5zaW9uLTEuNzAwMzM1NNIBIGh0dHBzOi8vd3d3LmNiYy5jYS9hbXAvMS43MDAzMzU0?oc=5
2023-10-20 21:12:13Z
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