Call to extend business loans made by industry associations in Mississauga, Oakville, Burlington

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Published July 24, 2023 at 5:02 pm

Industry associations representing hundreds of thousands of businesses across Canada are urging the Canadian government to extend the current Canada Emergency Business Account (CEBA) repayment deadline. PEXELS PHOTO

The Mississauga Board of Trade and Chambers of Commerce in Oakville, Burlington, Milton and Halton Hills are among the more than 150 industry associations calling for businesses to be allowed more time to repay their Canada Emergency Business Account (CEBA) loan.

In a letter sent via email to Deputy Prime Minister and Minister of Finance Chrystia Freeland, industry associations representing hundreds of thousands of businesses across Canada are asking the federal government extend the CEBA repayment to the end of 2025, or at least by one year, while maintaining access to the forgivable portion.

“Unless the federal government acts quickly to postpone the CEBA repayment deadline, businesses that are unable to repay their CEBA loan in time will lose access to the forgivable portion of up to $20,000, thus further increasing their debt load,” said the letter. “Extending the repayment timeline for the CEBA loan without losing access to the forgivable portion would give many small-and-medium size businesses the stability and certainty they need to get back on their feet on a path to prosperity.

“We urge you to quickly address this important matter.”

Almost 900,000 CEBA loans were approved across Canada.

“Many businesses had no choice but to take on this loan due to circumstances beyond their control,” said the letter. “This includes businesses in some of the hardest hit industries such as the retail industry and tourism sector.”

The letter pointed out that mandatory business closures and other government health restrictions left businesses with severe income losses and cash flow issues.

“Despite their best efforts, high interest rates, inflation and increased labour costs are making it difficult for small-and-medium size businesses to keep their heads above water, let alone make any dent in the debt many had to take on to survive pandemic restriction,” stated the letter.

The industry pointed to the results of a recent analysis of over 15,000 Canadian businesses found that inflation (56 per cent), input costs (40 per cent), and interest/debt costs (38 per cent) are the three most acute obstacles faced by business, and the smaller the firm, the more constrained they are by debt.

Recent surveys on CEBA loan-holder companies found that 49 per cent of small businesses are still making below normal revenues and 50 per cent of Canadian foodservice operators are currently operating at a loss or breaking even compared to 12 per cent pre-pandemic.

As well, 45 per cent of Canada’s tourism businesses are likely or somewhat likely to close within the next three years without government intervention into their mounting debt load.

“With each passing day, entrepreneurs who collectively maintain a very considerable workforce, face increasingly daunting financial pressure,” said the industry associations.

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