Advocates urge Ottawa to extend loan deadline

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This article was published 11/01/2024 (979 days ago), so information in it may no longer be current.

Advocates for small business are urging the federal government to reconsider its stance on the Jan. 18 deadline for the Canada Emergency Business Account loan repayments and to carefully examine policies hindering the beleaguered sector.

This, according to Brandon-Souris Conservative MP Larry Maguire, would help small businesses get out of debt and keep their doors open.

Introduced in April 2020 to assist Canadian small businesses amid the COVID-19 pandemic, CEBA provided interest-free loans with a maximum amount of $60,000. A forgiveness of up to $20,000 was possible if the remaining amount was repaid by a specified date.

Maguire told the Sun that several small business owners in Brandon are facing a daunting challenge as the deadline for CEBA loan repayments approaches, amid the multitude of challenges they face.

The deadline, he said, is a real concern for many businesses in Westman and across the province, noting some businesses have been able to get back on their feet after the pandemic, but not all of them.

Maguire attributed the struggles to a variety of factors, including government-imposed payroll and carbon tax hikes, record inflation, rising interest rates and labour shortages.

“Our priority as Conservatives is to push to improve the economic circumstances our businesses are operating in,” he said. “I am constantly sharing the views and concerns of small business owners and employees with (Chrystia Freeland), the minister of finance. She has been made aware of the plight of small businesses in our region, and I have been clear with her that these businesses need relief in some form and fashion.”

While Maguire said he and his Conservative colleagues have proposed common-sense solutions to provide relief to small businesses without causing excessive inflation, he called on the Liberals to re-evaluate their position and consider policies that would enable businesses to succeed in the long term.

“When the Liberals brought forward their Fall Economic Statement in November, I thought there was a possibility we would see an extension of the deadlines,” he said. “The Liberals didn’t make any commitments past Jan. 18. They should soften their position and begin to take a hard look at the policies that are holding small businesses back from succeeding.”

Shrugging Doctor Beverage is one of the small businesses struggling to repay the $40,000 CEBA loans.

Founder Willows Christopher told the Sun the ongoing economic challenges listed by Maguire had prevented the wine brewer from meeting the deadline, noting that the effects of the pandemic persist today.

Reflecting on previous extensions, he suggested a need for another extension, emphasizing the slow business period from January to March traditionally constitutes the hospitality industry’s weakest quarter.

“Taking a significant sum like $40,000 from profit is stressful for a small business, and it’s not something that can easily be pulled from nowhere,” he said. “This situation has placed considerable pressure on both me and our organizations. If things had returned to what we consider ‘normal,’ this wouldn’t have been an issue. However, the lingering effects of COVID and the ongoing recession make me question the realism of the repayment timeline.”

The Prairies and Northern Canada spokesperson for the Canadian Federation of Independent Business, Brianna Solberg, expressed concern about businesses missing the Jan. 18 deadline, leading to the loss of the $20,000 forgivable portion of the loan and incurring five per cent interest on the principal amount. Solberg said there is a need for the government to recognize the hardships faced by small businesses.

CFIB is calling for an extension of the repayment deadline until at least the end of 2024.

“We have received over 55,000 signatures from business owners who wanted to see this deadline extended, but unfortunately, it does not look like Ottawa will listen,” she said. “If relief won’t come for those struggling with CEBA loans, then there are other ways for the government to help businesses with increasing costs.”

The majority of small enterprises (77 per cent), she said, expect governments to prioritize tackling the surge in prices and the escalating cost of conducting business. As well, 74 per cent of small businesses advocate for a reduction in the overall tax burden.

If such reductions were implemented, she said, more than half (57 per cent) of small businesses say they would enhance employee compensation, encompassing wages and benefits.

CFIB is advocating for collaboration between Ottawa and the provinces to counterbalance impending Canada Pension Plan hikes, Solberg said, adding there is a proposal to implement a 50-50 split in Employment Insurance premiums between employers and employees.

“With the carbon tax slated to increase to $80 per tonne on April 1, the CFIB recommends a comprehensive overhaul of the entire carbon tax system,” she said. “This includes the cessation of future carbon tax hikes, immediate reimbursement of committed funds to small businesses that contributed to the tax and an expansion of the carbon tax exemption to encompass all forms of heating fuels, including natural gas and other sources commonly utilized by small businesses.”

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