Pandemic supports “had to end at one point,” according to Prime Minister Justin Trudeau.
The federal government is not extending the Jan. 18 deadline for small businesses to repay emergency pandemic loans.
During a news conference in Saint John, N.B., on Wednesday, Trudeau acknowledged that some businesses continue to struggle, even as the economy bounces back.
“Which is why we extended twice the repayment deadline for the CEBA loans, but we are now far enough from the pandemic that we do have to wrap up pandemic programs,” the prime minister said in response to a question from a reporter.
The Canada Emergency Business Account (CEBA) delivered more than $49 billion to nearly 900,000 small businesses to help get through the pandemic and now borrowers must repay by Thursday to qualify for partial loan forgiveness.
The loans maxed out at $60,000, but if they are paid back before the deadline, businesses can keep one-third of it.
If the money is not paid back on time, it will be converted to a three-year loan at five per cent interest with monthly payments starting immediately.
Trudeau said there are options for small businesses who are unable to pay their loans back before the deadline.
“There are plenty of financial institutions who are there to give low-cost loans to be able to benefit those businesses as they continue to repay it over the coming years,” he said.
“If they don’t want to engage with financial institutions, they still have three years to repay the entire body of the loan.”
Some businesses have taken out secondary loans so they can pay back the CEBA loan and qualify for partial forgiveness.
A study by the Canadian Chamber of Commerce released in December said nearly one-quarter of current CEBA borrowers still did not have a plan to repay with 15 per cent saying they would not be able to pay it back.
“Small businesses that are the backbone of our communities, the backbone of our economy, we will continue to be there for them in many different ways, but pandemic supports, we all know had to end at one point,” said Trudeau.
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