News | Sep 15, 2023
Image: Unsplash/James BeheshtiIn a move that has garnered both appreciation and critique, the federal government has announced an extension to the Canada Emergency Business Account (CEBA) loan repayment deadline.
CEBA Extension Details
- CEBA has been a pivotal support program during the pandemic, with a significant number of small and medium-sized businesses across various sectors, including food services, tourism, and retail, availing its benefits.
- As of June 30, only about a fifth of CEBA recipients have repaid their loans, with nearly $39-billion still outstanding.
- The initial repayment deadline for CEBA loans, which was set for December 31, 2023, has been extended by a year. This means businesses now have until December 31, 2024, to repay their loans.
- This extension applies to the nearly 900,000 enterprises that availed CEBA loans of either $40,000 or $60,000 during 2020 and 2021.
- The final repayment deadline, which was initially set for December 31, 2025, has now been pushed to December 31, 2026.
- Additionally, businesses in discussions with their financial institutions about refinancing their loans can still avail partial forgiveness if the negotiations conclude by March 28, 2024.
Government’s Stance and Response from the Business Community
- Prime Minister Justin Trudeau, in his announcement, emphasized the need for businesses to have “a bit more runway”. He acknowledged that while many businesses have managed to repay their loans, a significant number still haven’t.
- The government’s decision aims to provide relief to businesses, especially those still grappling with the economic repercussions of the pandemic.
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- The announcement has been met with a mixed response:
- While some, like the Canadian Chamber of Commerce, have lauded the government’s decision, others believe the extension isn’t sufficient.
- The Canadian Federation of Independent Business expressed concerns about the loss of the forgivable portion of the loan. They also organized a petition to reduce covid debt burden.
- The Tourism Industry Association of Canada and the Calgary Chamber of Commerce also voiced their opinions, highlighting the financial strain businesses are under and the need for more substantial support.
The mixed response from the business community indicates a need for more comprehensive measures to address the ongoing economic challenges.
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- Source: https://ncfacanada.org/trudeau-extends-ceba-loan-repayment-deadline-1-year/
