‘Risk to their continuing viability’: CEBA forgiveness deadline arrives for small-business owners

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This article was published 17/01/2024 (639 days ago), so information in it may no longer be current.

The financial pressure on 23,424 Manitoba businesses to repay a collective $1.27 billion in federal emergency loans by Thursday’s deadline will be too much for many to survive, business advocates and owners warn.

In 2020, the federal government launched the Canada Emergency Business Account program, with loans of up to $60,000 to help businesses during the COVID-19 pandemic — and up to $20,000 forgivable, if repaid by the deadline.

That deadline is Jan. 18.

As of December, only one-quarter of Manitoba CEBA loans had been paid back, the Canadian Chamber of Commerce business data lab reported — and just 76 per cent of CEBA loans would be paid back in full by the end of 2026.

Those numbers don’t bode well for survival, said Winnipeg Chamber of Commerce president and chief executive officer Loren Remillard.

Small- and medium-sized businesses struggling through the pandemic took the CEBA loans anticipating business to boom after lockdowns, but were instead sent reeling under rising costs and interest rates, he said Wednesday. “There is some risk to their continuing viability.”

That’s why chambers across Canada and premiers (including Manitoba Premier Wab Kinew) have asked the federal government to extend the CEBA repayment deadline to Dec. 31, 2024, but to no avail.

Remillard said Ottawa should give them more time to pay it back — for the good of the country.

“Let’s be strategic about how do we design that timeframe, so that it allows us to get the money back that the taxpayers are owed but leave the businesses still standing and healthy,” he said. “That’s in our collective interest.”

Loan recipient Carol Yaschuk said her small business has survived, but it’s been a long, hard-fought battle. She fears some won’t make it.

“I’ve been in business for 22 years,” said the owner of Ce Soir Lingerie in south Winnipeg that was forced to close during COVID-19 lockdowns while big-box stores could stay open. “I wasn’t going to go down without a fight.”

Months ago, she posted signs letting her customers know about the looming CEBA financial cliff. “I set all of my shame aside and said, ‘I’m going to survive it,’ and I did.”

Other small-business owners waited too long and will go under, said Yaschuk, referring to recent local social media posts.

“The other day, there was a message from another company — that they’re in their 11th hour and they need everybody to buy from them right now. It’s a little late to be asking. I’ve been asking for the last year for my clients to support me.”

Yaschuk ended up having to get a loan to repay her $60,000 CEBA loan.

On the eve of the deadline, she described jumping through hoops at her bank and an agonizing wait to make sure the money she borrowed in early December was transferred to pay off her CEBA loan by Jan. 18, in order to keep the $20,000 that was forgivable.

“I’ve been in business for 22 years … I wasn’t going to go down without a fight.”–Carol Yaschuk

Now, she has to deal with debt and rising costs, including rent that increased 30 per cent in the fall.

The entrepreneur said she plans to take her business online to increase sales. Considering her skills and experience, Yaschuk figures she probably could make more money doing something else but won’t.

“I love what I do. I have a purpose in my life. I’ve always known this was my purpose.”

On Wednesday, Kinew didn’t dismiss Manitoba throwing small businesses a lifeline.

“If we can come together to find an opportunity to ensure that they’re able to make it through this period, then I think that’s something that we’d all want to work together on,” the premier said at an unrelated event.

“Small businesses have had it tough these past few years, and while we want to make the big bets on a clean economy in the future, we also know that it’s those small businesses, medium-sized businesses that are the job creators for so many working Manitobans.”

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The recent 14-cents-per-litre gas tax holiday “is going a long way in helping to reduce their costs,” Finance Minister Adrien Sala said in an interview Wednesday.

“We’re also happy to be bringing in changes to personal income tax, which will provide significant benefits to sole proprietors and owners of small businesses to ensure that they’re able to deal with these cost pressures, themselves, as well as their employees,” Sala said.

“Overall, we feel that our government is doing doing our part to ensure that we help support our small-business owners taking on some of these cost challenges that they’re facing.”

— with files from Gabrielle Piché

carol.sanders@freepress.mb.ca

Carol Sanders
Legislature reporter

Carol Sanders is a reporter at the Free Press legislature bureau. The former general assignment reporter and copy editor joined the paper in 1997. Read more about Carol.

Every piece of reporting Carol produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.