Deadline to get partial CEBA forgiveness arrives, small businesses say more support needed

The deadline for Canadian businesses to repay pandemic loans and receive partial forgiveness has arrived, as business groups say it could mean closure for many firms.

Hundreds of thousands of businesses and non-profits received a Canada Emergency Business Account loan of up to $60,000 during the COVID-19 pandemic.

Up to one-third of the loans could be forgiven if the outstanding amount is repaid by today, otherwise the debt will convert into a three-year loan with five per cent annual interest.

Businesses also have the option to refinance the loan with a financial institution, giving them until March 28 to set up the arrangement and still be eligible for partial forgiveness.

The ‘end of the road’ for some small businesses

Meanwhile, some small businesses struggling to make Thursday’s deadline say they need more time to repay their debt.

Jeremy Jacob, founder of Village Bloomery in East Vancouver, says he won’t be making the Thursday deadline.

“What was supposed to help us is now going to hurt us and for many small businesses, it might be the end of the road,” Jacob said.

Due to the nature of his cannabis shop business, Jacob says it can be difficult to sustain.

“We are finding it very challenging as a small business in the regulated cannabis space,” Jacob said. “About 30 to 50 per cent of our sales go to the government, so sustainability and profitability is very challenging.”

In a statement to CityNews, the Office of the Deputy Prime Minister and Minister of Finance says: “As of January 15, we estimate nearly 70 per cent of CEBA recipients have repaid and benefited from partial loan forgiveness.”

Despite the option to refinance, Jacob says that doesn’t help much for his kind of business.

“I did speak to our bank about refinancing the loan. Most banks will not do business and lend to cannabis companies, so we are really stuck between a rock and a hard place here,” Jacob said.

Jacob says the federal government should do more to help small businesses hit hard by the pandemic.

“They could forgive portions of it regardless of your repayment status, just recognizing the economy has changed dramatically,” he said.

“When we know that billions of dollars a year is given to subsides to big carbon, and when we know our government is subsidizing foreign wars with our tax dollars, we would love to see giving back to small businesses in Canada that drive our communities, build our cultures and take care of people.”

Small business owner Munu Hicken-Gaberria also says more time is needed to pay back the loan without additional interest because the extra accumulating debt could hurt small businesses.

“The government really hasn’t done enough to help out small business,” Hicken-Gaberria said.

“There is a potential tsunami of bankruptcies that are coming down the line. It’s almost if they don’t understand what the implications are.”

Jacob says the government’s role is to support small businesses, but by calling in these loans, they’re doing the complete opposite.

“When you look at the numbers, 98 per cent of businesses in Canada are small businesses.”

The Canadian Federation of Independent Business and Restaurants Canada have been calling for another extension to the deadline.

However, on Wednesday, Prime Minister Justin Trudeau said it’s time to wrap up pandemic financial aid programs.