With 51% of restaurants struggling, CEBA extension not enough: industry group
Global News
The federal government will be extending the deadlines for CEBA loan repayments, but Restaurants Canada says it's not enough to help many struggling businesses.
The federal government will be extending the deadlines for Canada Emergency Business Account (CEBA) loan repayments, but Restaurants Canada says it’s not enough for many struggling businesses.
Prime Minister Justin Trudeau announced Thursday that it would extend the overall loan repayment deadline by a year to Dec. 31, 2026. However, the deadline to meet the condition for the forgiveness grant of up to $20,000 was increased by just 18 days, from Dec. 31, 2023, to Jan. 18, 2024. The government previously announced a one-year extension in January 2022.
“It’s a first step,” said Mark von Schellwitz, vice president with Restaurants Canada for Western Canada.
He said the advocacy group for restaurants and service industry is disappointed by the length of the extension.
“It’s very tough times when you’ve got half the industry that’s not making any profit at all right now due to a combination of that pandemic-related debt, labour shortages and, of course, record-high inflation,” Schellwitz said.
CEBA was available from April 9, 2020, to June 30, 2021, and provided $49 billion in interest-free, partially forgivable loans of up to $60,000 to nearly 900,000 small businesses and not-for-profit organizations to help cover their operating costs during the COVID-19 pandemic.
“For CEBA loan holders who make a refinancing application with the financial institution that provided their CEBA loan by Jan. 18, 2024, the repayment deadline to qualify for partial loan forgiveness now includes a refinancing extension until March 28, 2024,” the federal government said in a news release Thursday.
Loans that are still outstanding on Jan. 19, 2024, will convert to three-year term loans, subject to interest of five per cent per year, the government said, “with the term-loan repayment date extended by an additional year from Dec. 31, 2025 to Dec. 31, 2026.”
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