Sent to: Honourable Chrystia Freeland, Minister of Finance & Honourable Rechie Valdez, Minister of Small Business
Dear Minister Freeland & Minister Valdez:
The recent announcement by the Government of Canada to extend repayment deadlines for the CEBA (Canada Emergency Business Account) Loan was a step in the right direction in support of the business community who, during the most challenging times, demonstrated resilience and resolve. While businesses appreciate the extension, those hardest hit will continue to face challenges over the coming weeks and months, given the shorter-than-expected extension to the interest-free repayment period.
Small business owners in Thunder Bay and across the country are continuing to grapple with compounding effects from the pandemic, including labour shortages, declining employee mental health, rising inflation, and repayment of debt. Restaurants Canada indicates that over 51% of restaurants are operating at a loss or barely breaking-even and the Tourism Industry Association of Canada continues to highlight the urgency of the very precarious financial situation faced by many small and medium-sized businesses in the tourism sector.
A one-size-fits-all approach to CEBA repayments does not adequately reflect the uneven nature of pandemic recovery across the full spectrum of businesses by size and sector. Business owners who can pay a portion of their loan balance should be eligible to receive a proportionate percentage of loan forgiveness. Requiring a minimum 50% repayment by January 2024 to receive a commensurate portion of loan forgiveness ensures that those businesses who cannot fully pay off the loan are not penalized for their economic struggles. The current lack of flexibility of repayment and loan forgiveness terms is a devastating blow to entrepreneurs who are doing everything they can to make ends meet in the face of so many challenges.
Just as the CEBA loan was implemented in two stages, we encourage you to implement a staged approach to repayments while further extending the final payment deadline to December 2024 to ensure that the hardest hit businesses can access loan forgiveness opportunities.