We have been calling for the federal government to re-work its conclusion of the Canada Emergency Business Account (CEBA) for the last two years.
There was an initial one-year extension provided and then recently the Government of Canada once again announced it would be extending the deadline, only this time it’s by 18 days.
The CEBA loan program provided much-needed help to the business community early on in the pandemic with interest-free loans of up to $60,000, of which up to 33% would be eligible for loan forgiveness if the loan is repaid on time. The situation was quite different back in April of 2020 when it was rolled out. COVID-19 would continue to bring on public health restrictions that dramatically impacted businesses for the next two years. Some businesses and sectors were hit much harder by the pandemic and the public health restrictions than others. Some had to dig deeper to borrow more and some are still struggling to reach the profitability they enjoyed prior to the pandemic.
Just as the lockdowns and restrictions did not impact businesses equally, neither has our recovery. Even in recovery, the business community is trying to build back despite a shortage of labour, dramatic interest rate increases, inflation not seen in a generation, and now a potential recession.
Building back has not been easy for some businesses.
Back in 2021 the Peterborough and the Kawarthas Chamber of Commerce could see that while the CEBA program saved many businesses, it could also hold back many of the hardest hit businesses which are also the ones our governments pledged to step up and help.
Our 2021 policy resolution approved and endorsed by the Canadian Chamber of Commerce and its membership called on the Government of Canada to:
1. Extend the deadlines for repayment of the Canada Emergency Business Account program by two years.
2. Make the forgivable portion of the loan available to all business that continue to have operations impacted by ongoing COVID-19 public health restrictions throughout 2021.
3. Allow businesses that continue to have operations impacted by ongoing COVID-19 public health restrictions in 2021 to be exempt from incurring interest prior to the balance of their loan being due.
Rocco Rossi, President and CEO of the Ontario Chamber of Commerce summed up the recent CEBA extension announcement well:
“Small business owners across the province continue to grapple with compounding effects from the pandemic, including labour shortages, declining employee mental health, rising inflation, and repayment of debt.
Yesterday’s announcement by the Government of Canada was a step in the right direction in support of Ontario’s business community who, during the most challenging times, demonstrated resilience and resolve. While businesses appreciate the extension, those hardest hit will continue to face challenges over the next coming weeks and months, given the shorter-than-expected extension to the interest-free repayment period.
More action is needed to ensure that Canada’s small business community can fully recover. The Ontario Chamber of Commerce looks forward to working with the Government of Canada on this and other matters important to Ontario business.”
As it stands, the businesses that are still struggling will not be eligible for the $20,000 loan forgiveness and will begin paying 5% interest on what they owe. The alternative is further borrowing to pay their debts to the government.
It’s important that those who can comfortably repay their loans do so in a timely manner. But those not in such a good financial position, many of which are local small businesses, should still have an avenue to access debt forgiveness and low
The Peterborough and the Kawarthas Chamber of Commerce acts as a catalyst to enhance business growth, opportunity, innovation, partnerships and a diverse business community.