Yahoo Finance Opinion: Small businesses at risk if deadline for CEBA repayment not extended
By Dan Kelly
The clock is ticking on the Canada Emergency Business Account (CEBA) repayment deadline. Sept. 22 marks 100 days until time runs out.
As MPs return to Ottawa next week, changes on the CEBA front need to be at the top of their agenda. CFIB’s research shows that one-fifth of all businesses in Canada — nearly 250,000 in total — could be at risk of closing their doors next year unless the federal government changes the deadline. Small businesses in the arts, recreation, and information, hospitality and social services sectors are most likely to miss the current CEBA deadline.
The CEBA loan was a critical lifeline to businesses as governments ordered Main Street to shut down. Now it’s a source of immense stress, anxiety and uncertainty. We were optimistic that the last lockdowns in January 2022 would spur a return to normalcy, but many businesses are still not out of the woods. Sky-high operating costs, staffing challenges, a 15-year high in interest rates and low revenues continue to drive uncertainty for many.
The time for action is now: government needs to push the repayment deadline at least into 2024 to give businesses the runway they need. Over 250 business associations from coast to coast and across all sectors share the same sentiment in a joint letter to Finance Minister Chrystia Freeland.
Ottawa has been falling over itself to deliver billions upon billions of dollars to multinationals over the past six months. But small business owners can’t get a little more time to pay back their loan? These are our main streets we are talking about, the businesses that ensure 66 cents of every dollar spent local stays local.
The federal government wants to recoup its money, but it won’t be able to if substantial numbers of small businesses are forced to close because they’re still not in a position to repay the loan.
I’ve heard from some business owners who had to provide personal guarantees on their CEBA loan. If they’re forced to close their business, they can’t walk away from the loan. They could be at risk of personal bankruptcy, which only compounds their worries about the looming repayment deadline.
Small businesses understand better than anyone that businesses come and go. Churn is a natural and necessary part of the economy, and some of the 250,000 will inevitably close. The societal changes that have happened since the pandemic, like working from home, which caused a shift in spending patterns or a rise in online sales — these are the trends that businesses, whether they like it or not, have to keep up with. The market will dictate who succeeds or fails.
But businesses that took the CEBA loan did so to survive and to keep paying wages and serving customers. They were shut down not because they were not viable, but to protect society. Which they did. And now they’re asking for just a little more time to pay off their loan.
We’re not demanding the government bail out small businesses for the rest of history. But it should do a better job at covering the costs imposed on small businesses over the past three years by on-and-off restrictions that removed business owners’ rights to earn an income. They shouldn’t be on the hook for extra costs they experienced as a result.
A government that can give away tens of billions of dollars in outright subsidies to big businesses can surely afford to push back the deadline for emergency loans to small businesses. We’re now in the endgame, and the next few weeks will determine the future of tens thousands of enterprises across Canada.
Dan Kelly is president of the Canadian Federation of Independent Business.
