TORONTO — The fine print of last week’s CEBA extension announcement from the federal government has left ACTA and others in the industry disappointed and frustrated.
As reported on Sept. 15, the federal government is extending deadlines for CEBA (Canada Emergency Business Account) loan repayments, providing an additional year for term loan repayment, and additional flexibilities for loan holders looking to benefit from partial loan forgiveness of up to 33%.
More details can be found at the Department of Finance’s site here.
Yesterday ACTA issued a statement expressing its disappointment with the extension, saying it’s not enough.
“Last Thursday, Prime Minister Trudeau announced that more time – one year – would be provided for small businesses, including travel agencies and independent travel advisors, to repay CEBA loans – the Canada Emergency Business Account – which were due to be repaid by Dec. 31, 2023,” says ACTA.
“At the time, ACTA and many other business associations were delighted to hear of this measure of temporary relief that offered hope to heavily indebted businesses struggling to repay their loans.
“However, ACTA was very disappointed to read the actual details of the announcement that came later.”
As Wendy Paradis, ACTA President, notes: “Hours after the announcement, new details appeared on the Department of Finance website that described a very different picture.
“Although more time to repay CEBA loans was being offered, the government was taking away the key element of the program – the interest-free partial loan forgiveness offered (worth up to $60,000) – if businesses repay the full amount by the deadline.”
She added: “Instead of carrying forward the interest-free partial loan forgiveness to the new deadline, the government instead is providing only an 18-day extension to qualify for it –until January 18, 2024. If the loan is not repaid by this date, outstanding CEBA loans will be administered by financial institutions subject to 5% interest. Instead of extending forgiveness, the government is charging interest. This is unacceptable.“
Paradis said that while ACTA is thankful that the government announced more time to repay CEBA and RRRF loans, it is critical that the interest-free forgivable portion of both also be extended immediately.
According to a recent ACTA survey, travel agencies and independent travel advisors continue to struggle with significant debt as a result of enduring and recovering from the covid-19 pandemic. 27% of businesses owe at least $100,000; 56% owe at least $50,000; 80% owe at least $10,000. 36% of respondents say it is likely or somewhat likely their business will close within 3 years.
DOUBLING DOWN ON ADVOCACY
With Parliament’s return this week, Paradis says ACTA’s advocacy efforts will intensify through Dec. 3, 2023 with a vigorous advocacy strategy which includes the letter writing campaign that began on Aug. 29 and collaboration with stakeholders.
“We need to make it clear that this CEBA extension is by no means enough to help our members,” said Paradis. “We will continue to work alongside other stakeholders in our coalition to make sure the message gets through.”
ACTA is asking that the deadline to repay CEBA and RRRF loans be extended by two years from Dec 31, 2023 to Dec. 31, 2025 –and that the government extend access to the interest-free forgivable portion of both for two years.
ACTA will also advocate for relief on federal HASCAP (Highly Affected Sectors Credit Availability Program) loans, though terms of that program are different than CEBA and RRRF.
ACTA will target the Government of Canada in their efforts including Members of Parliament, Finance Minister Chrystia Freeland and additional cabinet members.
