NDP MPs call for CEBA repayment extension

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This article was published 21/12/2023 (667 days ago), so information in it may no longer be current.

The federal NDP is calling for an extension to a pandemic-era business loan program since its looming payment deadline is causing anxiety among biz owners who say they can’t pay.

Winnipeg NDP MPs Leah Gazan and Daniel Blaikie joined premiers and business lobbyists to advocate for a Canada Emergency Business Account repayment extension.

“It’s going to mean the difference between going out of business or staying open” for some local companies, said Blaikie.

Upwards of 23,000 Manitoba businesses were approved for a federal CEBA loan during the COVID-19 pandemic. Companies obtained up to $60,000 each while the global event turned their operations upside down.

One-third of their loan is forgivable if it’s repaid by Jan. 18, or if they work to refinance through their bank by March 28.

Otherwise, companies will pay interest on their CEBA loan — five per cent per annum — with a full repayment deadline of Dec. 31, 2026.

The 23,424 Manitoba businesses approved for the loan received a collective $1.27 billion. Nearly two-thirds of the businesses — 61 per cent — haven’t fully paid their loan back, according to December Canadian Federation of Independent Business data.

More than half, 52 per cent, haven’t repaid anything, the federation said.

Manitoba follows a national trend: nearly two-thirds of businesses haven’t repaid their CEBA loans in full, and just 10.7 per cent have partially repaid the debt.

“We want to see the federal government get this money back,” Blaikie stated. “But if they’re going to force small businesses into foreclosure by requiring repayment of the loan that they can’t repay, it’s not a very good way to get the money.”

The federal NDP is calling for an extension on the CEBA loan’s partial forgiveness to the end of next year, with an assessment taking place in late 2024, Blaikie continued.

The party pointed to the Liberals paying billions in contracts to large consulting firms. Cutting back slightly would cover the cost of extending the CEBA deadline, the NDP tout.

Blaikie called the government’s refinancing option with a March extension “a good deal for the banks.”

“The government is prepared to provide forgiveness on the loan, and people are willing to pay interest to a bank instead of the federal government?” he questioned. “To me, that doesn’t sound like a great deal for the government.”

The Bank of Canada has raised its key lending rate 4.75 per cent, to five per cent, since March of 2022.

In October, all premiers signed a letter to Prime Minister Justin Trudeau asking for a CEBA deadline extension to Dec. 31, 2024, where compliant businesses receive a forgivable portion.

In November, Downtown Winnipeg BIZ chief executive Kate Fenske and her contemporaries across Canada visited Parliament Hill to stress a CEBA loan extension.

Both the Canadian Chambers of Commerce and the CFIB have lobbied for extensions.

“The situation for many could become dire, and small businesses are aware of this,” Brianna Solberg, the CFIB’s director of legislative affairs for the Prairies and Northern Canada, told the Free Press in October.

Riley Grae, a local shop on Corydon Avenue, is closing its café at the end of the year in anticipation of meeting its CEBA loan deadline, among other things.

“The bottom line is that, 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,” Katherine Cuplinskas, press secretary for Deputy Prime Minister Chrystia Freeland, wrote in a statement Thursday.

It’s a reiteration of Ottawa’s stance in November.

The initial CEBA loan deadline (for partial loan forgiveness) was Dec. 31, 2022. The feds extended the deadline to Dec. 31, 2023, and again to Jan. 18, 2024.

Roughly 900,000 small businesses and non-profits nationally took a CEBA loan. The program doled out $49 billion.

gabrielle.piche@winnipegfreepress.com