Voice of Business: Government Loan Repayment Post Cabinet Shuffle
/Repaying loans is creating another financial challenge for our local business community.
According to the Canadian Broadcasting Corporation (CBC), The Bank of Canada recently increased interest rates and now the Canada Emergency Business Account (CEBA) repayment deadline is looming. Many small business owners are facing more debt and more barriers to the long road of recovery from the pandemic. As we previously stated in our March Voice of Business column, it cannot be stressed enough that CEBA loan repayment is still a challenge for many small businesses. Recently, the Canadian Chamber of Commerce and 280 industry associations penned a letter to Minister Freeland highlighting the number of businesses that may not survive in the long term due to ever-growing debt. According to the letter, 49 per cent of small businesses’ revenues are still below normal, and approximately half of tourism-based businesses may not survive in the next few years.
“…not all businesses have their heads above water yet: they’re facing extreme inflation, unreliable supply chains, and the tightest hiring market in a generation. They’re just asking for more time to pay the government back.”
- Matthew Holmes, Senior Vice President of Policy and Government Relations, Canadian Chamber of Commerce
In another turn of events, the federal government announced a cabinet shuffle on July 26. In this change, there will be a new Minister of Small Business, MP Rechie Valdez. Valdez is a former small business owner herself. We look forward to seeing what she can bring to the table. In the swearing-in ceremony, she stated she would like to make the small business its own portfolio.
The need for an extension has already come up in the past. In 2021, the Peterborough and the Kawarthas Chamber of Commerce authored a Policy Resolution for the Canadian Chamber of Commerce calling on the federal government to:
Extend the deadlines for repayment of the Canada Emergency Business Account program by two years.
Make the forgivable portion of the loan available to all businesses that continue to have operations impacted by ongoing COVID-19 public health restrictions throughout 2021.
Allow businesses that continue to have operations impacted by ongoing COVID-19 public health restrictions in 2021 to be exempt from incurring interest prior to the balance of their loan being due.