Yahoo Finance Business group wants extension of pandemic loan repayment deadline, saying downtowns in trouble
Federal action is needed to revive downtowns in Canada, says an organization that is calling on Ottawa to give businesses more time to pay back federally-backed pandemic loans.
Kate Fenske, chair of the International Downtown Association Canada, said on Monday that downtown businesses are continuing to grapple with rising costs, labour shortages, operational problems and high office vacancy rates. IDA Canada represents more than 500 business improvement associations.
Fenske called for an extension of the repayment deadline for Canadian Emergency Business Account (CEBA) loans and more time for loan forgiveness. The current deadline is Jan. 18, 2024. CEBA was launched in April 2020 to help Canadian small businesses during the height of the COVID-19 pandemic.
"Conversations with businesses on the ground and the observable low repayments reveal the gravity of this matter, especially for street level businesses. Addressing this will significantly dictate the prosperity of small businesses, and by extension, Canada's economy," she said in Ottawa.
"It's going to be much harder and more costly to bring back businesses and jobs than it is to keep the ones we have," she added.
Fenske said downtown businesses "represent the cultural and community spirit of our cities and towns. They are committed to our neighbourhoods and many are struggling to stay afloat as they face mounting operational costs and other adversities."
Businesses were offered zero-interest loans of up to $60,000 through the program. Approximately $49 billion went out to nearly 900,000 businesses across Canada.
In September, the government granted an extension of the repayment deadline, moving it from Dec. 31, 2023 to Jan. 18, 2024.
Fenske also called for a "nationwide collaborative initiative" to ensure downtown areas thrive.
"There are social challenges on our streets like we've never seen before," she said.
"It is time to put politics aside and have all levels of government work together to address homelessness, addictions and mental health concerns."
She said businesses want to see a "concerted effort" to ensure cities remain safe.
Kate Fenske, chair of the International Downtown Association Canada, middle, called on Monday for an extension of the repayment deadline for Canadian Emergency Business Account loans. (CBC)
Ryan Mallough, vice-president of legislative affairs for Ontario at the Canadian Federation of Independent Business, said he supports the demand from the IDA Canada. The CFIB's position is that the federal government should extend what it calls the CEBA repayment deadline for an additional year to December 2024.
Mallough said he believes the initial announcement by the government was "absolutely misleading" and the organization had to educate business owners on the fine print of the extension.
He described pandemic recovery in Toronto as "tight" because businesses have faced high interest rates and inflation following economic disruption at the height of the pandemic. He said 2023 was the first year that businesses have been open for the entire year.
"We're on our way but we're definitely not quite there just yet," he said. About one-third of businesses are in a good position to pay off their loans, he said.
A retail space in Toronto is shown here with a for lease sign. (CBC)
Katherine Cuplinskas, spokesperson for Deputy Prime Minister Chrystia Freeland, said in a statement on Monday that the government has already extended the repayment deadline.
"If you are a small business and do not currently have the funds to repay your CEBA loan, you now have three years to repay it in full," she said.
"The additional flexibility that we announced is significant support for small businesses who might still be struggling to make ends meet."
Barkat Bhanwadia, owner of INS Market, a convenience store that is inside Toronto's underground PATH, said he is driving Uber to supplement his income. He says foot traffic is well below what it used to be. On Mondays and Fridays, he said people often work from home. He doesn't think he'll make the January deadline.
"We didn't accumulate a single penny from the business to put toward the CEBA loan because the expenses are high so we cannot save anything."
