Pandemic Loan Deadlines Extended, but Challenges Linger for Small Businesses

In the latest update to Chestermere’s business community, Prime Minister Justin Trudeau announced an extension to the repayment deadline for the Canada Emergency Business Account (CEBA). Introduced during the pandemic’s zenith, this program aimed to support small businesses grappling with closures and restricted operations due to health mandates.
Under CEBA, businesses could seek interest-free loans, with the federal government acting as the guarantor. Qualifying businesses could secure up to $60,000, and if they adhered to repayment terms, $20,000 would be written off. Initially set for the close of 2022, the deadline received a push to the end of 2023.
Yet, businesses that lagged beyond this timeframe faced a two-fold consequence: the start of interest accumulation and the necessity to settle the full loan amount by 2025. Trudeau’s recent announcement now shifts this deadline further to 2026.
Offering his perspective on Thursday, Trudeau acknowledged, “While numerous businesses have squared their loans, some still seek a broader window.”
Sources from the government, speaking off the record, shared with CBC an added grace period for loan forgiveness, moving it to January 18, 2024. However, any dilly-dallying past this point will activate interest.
The vast scale of CEBA’s impact is evident: it greenlit nearly 900,000 businesses, channeling a whopping $49 billion in loans. Yet, as of May 31, only a mere 21% of these enterprises had cleared their dues.
These extensions come in the backdrop of fervent appeals from business advocacy collectives urging the government to extend beyond 2023. Some voices even championed the idea of complete loan forgiveness.
However, the announcement was met with a lukewarm response from some corners. The Canadian Federation of Independent Business (CFIB) expressed its discontent. CFIB’s president, Dan Kelly, lamented, “The most pressing concern with CEBA remains untouched – the evaporation of the $20,000 loan forgiveness for businesses that can’t settle by the year’s end.”
Kelly continued, “Merely extending the forgiveness window by several weeks won’t suffice for countless small business owners lacking the funds for immediate repayment.”
For Chestermere’s bustling local businesses, this news brings mixed feelings. While the extended deadline offers some respite, the journey ahead remains fraught with challenges as they navigate the economic aftermath of the pandemic.