The federal government announced it will be extending the repayment deadline for the interest-free loans taken from the Canada Emergency Business Account (CEBA) program to next year as businesses are concerned about the new restrictions amid the spread of the Omicron COVID-19 variant.
According to the Minister of International Trade, Export Promotion, Small Business and Economic Development, Mary Ng, the previous repayment deadline which was set for December 31 of this year are now pushed to the same date in 2023.
“We’ve heard from businesses that they’re looking for this flexibility, and that’s what today’s announcement is about,” she said during a news conference on Wednesday.
“This additional year will help businesses get that flexibility and continue to work together through this pandemic to the end of this pandemic.”
The CEBA program offered interest-free loans of up to $60,000 to small businesses and not-for-profits during the COVID-19 pandemic. It was open from April 9, 2020, to June 30, 2021, and funded more than 898,000 Canadian businesses.
Going forward, the government said repaying the balance of the loan on or before Dec. 31, 2023, would result in loan forgiveness of 33 percent, or up to $20,000.
Outstanding loans would then convert to two-year term loans with interest of five percent per year starting on Jan. 1, 2024, with loans fully due by Dec. 31, 2025.
To date, the federal government has approved 898,254 CEBA loans and 569,282 CEBA expansions for businesses. Overall, the government has spent $49.17 billion on the program.
Ng also announced Wednesday the repayment deadline to qualify for partial forgiveness for CEBA-equivalent lending through the Regional Relief and Recovery Fund has been extended to Dec. 31, 2023, as well.
Dan Kelly, President and CEO of the Canadian Federation of Independent Business (CFIB), tweeted Wednesday the announcement was “good news.”
“#CEBA has been an incredibly helpful program & used by nearly 900,000 small business owners,” he wrote as part of a Twitter thread.
“Importantly, it is not just a $60K loan as the $20K forgivable portion is one of the few programs that helps reduce the COVID debt small firms have taken on.”
As the Omicron variant threw off Canada’s pandemic recovery last month, the government announced in December 2021 it would be expanding eligibility for its Canada Worker Lockdown Benefit to allow for any worker to apply for the support if their workplace has been slapped with capacity-limiting restrictions of 50 percent or more.
The measure came after provinces across the country hit bars, restaurants and other workplaces with restrictions to try to slow the spread of Omicron.
Eligible workers can receive $300 — $270 after taxes — for each one week until May 7, 2022. The expanded eligibility, however, only applies until Feb. 12, 2022.
Furthermore, businesses can get support through the Local Lockdown Program that was expanded to include any employers that are subject to restrictions that cap their capacity at 50 percent or more.
Eligible employers will receive wage and rent subsidies that can range from 25 percent to a maximum of 75 percent, depending on how much revenue they lost as a result of the capacity limits.
The new benefits are part of the government’s Bill C-2, which became law last month.
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