The pandemic is over and so is the early payment-discount plan for businesses that had to take out a loan under the government’s Canada Emergency Business Account program to survive.
Loans were extended through Canada’s banks to businesses that were struggling with the effects of COVID-19 restrictions that hurt business.
If businesses repaid their loans by Jan. 18, they would earn forgiveness of $10,000 for a $40,000 loan and $20,000 for a $60,000 loan.
Up to one-third of the loans could be forgiven if the outstanding amount is repaid by Jan. 18, otherwise the debt will convert into a three-year loan with five per cent annual interest.
As well, loan holders that submitted a refinancing loan application by Jan. 18, but required a grace period to finalize the payout of their CEBA loan, could still qualify for partial loan forgiveness if the outstanding principal of their CEBA loan, other than the amount of potential debt forgiveness, is repaid by March 28.
On Jan. 17, Prime Minister Justin Trudeau said the government extended the deadline twice because of the challenges faced by businesses in the wake of COVID-19.
But now, “we do have to wrap up pandemic programs,” he said, at a news conference in Saint John, N.B., according to a CP report.
Delta Chamber of Commerce board chair Rosanne Horner said the program was successful.
“Most businesses (76 per cent) that took the loans, are on track with their repayments, according to recent data from the Canadian Chamber of Commerce’s Business Data Lab,” Horner said. “That said, we fully acknowledge that in Delta, and elsewhere across Canada, there are businesses that will not be able to repay the loans.”
She added that some sectors have been more affected than others, including hospitality and tourism, which are still recovering and that perhaps the government will consider targeted programs for those.
“However, a blanket forgiveness program is unrealistic, and not fiscally responsible for the government and ultimately taxpayers,” Horner said.
Chamber executive-director Jill McKnight added that she’s heard of local businesses repaying their loans and that no one has contacted the chamber saying they can’t repay the loans.
Restaurants Canada has said that more than half of restaurants are operating at a loss or barely breaking even, as the sector was disproportionately affected by pandemic lockdowns.
Canada Emergency Business Account loans were available from April 9, 2020, to June 30, 2021, and provided $49 billion in interest-free, partially forgivable loans of up to $60,000, to nearly 900,000 small businesses and not-for-profits to help cover their costs during the pandemic, said the Department of Finance Canada.
– with files from CP
