A large number of business owner clients are wondering today how they will repay pandemic debts incurred as part of the Canada Emergency Business Account (CEBA) loan program, in time to meet the December 31, 2023 deadline making them eligible for some debt relief.

The Canadian Federation of Independent Business (CFIB) is petitioning the government to extend that deadline, saying only half of businesses are back to normal sales. More, they say only 10 per cent of CEBA users have repaid their loans so far; 43 % risk missing the December 31 deadline.

“Financial institutions still have time to delay repayment processes if the government extends the CEBA deadline, but that window is closing. Ottawa needs to act now,” says CFIB president, Dan Kelly.

They add that the smallest businesses with less than four employees were most likely to miss the deadline. “Even among the 47 per cent of small business owners who indicate they will meet the 2023 deadline, half say they will struggle to do so.” 

The CFIB’s chief economist and vice president of research, Simon Gaudreault adds that most business owners want to repay the loan on time to secure the forgivable portion, but many can’t guarantee they’ll be able to. “Our analysis suggests that most small firms expect to struggle in the process, putting their business’ future at risk.” 

Measures the association is lobbying for include an extension of the deadline until the end of 2024 or 2025. They’re also asking the government to consider additional debt forgiveness measures and implement an appeal process for loan recipients who were later deemed ineligible.

The CEBA loan program offered interest-free loans of up to $60,000 to small businesses and non-profit organizations. Borrowers were offered debt forgiveness—up to 33 % of the loan to a maximum of $20,000 if they repaid the balance by December 31 this year. “With the maturity date rapidly approaching and many businesses still struggling to return to normal sales and profits, it is crucial to examine debt challenges they face and identify measures governments could take to secure their viability,” the CFIB states in its report, Back in Business? Spring Update on Small Business Debt and CEBA. 

“With nearly 900,000 businesses receiving approval for the loans,” the report continues, “just under $50 billion was distributed through CEBA.”