CEBA repayment due by end of the year
Canadian employers are getting the support of several political parties in their call for the federal government to extend the current Canada Emergency Business Account (CEBA) repayment deadline.
Recently, the Canadian Federation of Independent Business (CFIB) welcomed the support of Canada’s New Democratic Party (NDP), the Bloc Québécois and the Green Party of Canada in their push for the extension.
"Thousands of small business owners tell us they won't be able to outrun their COVID debt by the end of December. We're not asking for total forgiveness, just more time for small businesses to get back on their feet," said Dan Kelly, CFIB president.
"While many Conservative and Liberal Party Members of Parliament have shared their private support, their leadership has been silent on the need for CEBA changes. We need a decision now."
Before 2022 ended, CFIB also called on the federal government to hit the pause button on the 2023 increase in payroll taxes.
Three political parties join call
Earlier this month, the Green Party joined the rally for the extension of the CEBA repayment period.
“These are the local businesses we rely on every day for groceries or a haircut, and it’s they who shouldered much of the burden of pandemic-related closures and restrictions while big box stores were allowed to stay open,” said Mike Morrice, member of Parliament for Kitchener Centre. “Considering the restrictions stretched out longer than first anticipated, the federal government must step up and extend the timeline for them to repay these loans in full.”
That came just over a week after the NDP expressed the same sentiment.
“The pressure is growing for the Liberals to act and help small businesses get through these tough times,” said MP Richard Cannings (South Okanagan—West Kootenay), NDP critic for small business and tourism. “These businesses are getting squeezed, and the Liberals are leaving them to fend for themselves. Instead of ignoring these calls, New Democrats are here to help and secure an extension.”
In July, the Canadian Chamber of Commerce and the CFIB sent a letter to Chrystia Freeland, deputy prime minister and minister of finance asking to “extend the current CEBA repayment deadline by two years to the end of 2025, or at least by one year, while maintaining access to the forgivable portion.”
In June, the Bloc Québécois asked the federal government for the same flexibility for small businesses.
“We are asking the government to be more flexible and offer the opportunity to businesses that need it to obtain additional time and conclude a reimbursement agreement without losing their subsidies,” said Nathalie Sinclair-Desgagné, the Bloc Québécois spokesperson for pandemic programs.
Approved CEBA loans and expansions
Introduced by the federal government during the COVID-19 pandemic, the CEBA program offered interest-free loans of up to $60,000 to small businesses and not-for-profits.
Final program statistics show that, under the program, 898,271 businesses were approved for loans and 571,851 businesses were approved for expansions. Overall, the federal government approved a total amount of $49.2 billion for loans and expansions under the program.
The CEBA repayment is due on Dec. 31, 2023. For eligible CEBA borrowers in good standing, repaying the balance of the loan on or before the deadline will result in loan forgiveness of up to 33 percent (up to $20,000), according to the federal government.
However, small business owners who will not be able to pay on time will lose the up to $20,000 forgivable portion and begin paying interest on a much larger loan balance, noted CFIB.