Area businesses are under pressure as the deadline to repay federal emergency loans without losing a forgivable portion is now fast approaching.
During a November 16 press conference, Salaberry-Suroît MP Claude DeBellefeuille was flanked by the heads of the local chambers of commerce and industry as she called on the Canadian government to extend the repayment period while demanding greater flexibility for small businesses.
Accompanied by Mathieu Miljours, the director of the Chambre de commerce et d’industrie de Vaudreuil Soulanges (CCIVS), and Éliane Galipeau, the director of the Chambre de commerce et d’industrie de Beauharnois-Valleyfield-Haut-Saint-Laurent (CCIBVHSL), DeBellefeuille insisted that an extension to the repayment period is necessary to avoid putting businesses in her riding at risk.
“The federal government’s inaction is weakening many of our businesses,” said DeBellefeuille, who noted the lack of flexibility while alleging there are errors within the program that are not possible to correct. “At the moment, there is no direct contact with the ministry, and companies are unable to speak to anyone. There is no one to talk to about specific issues with the program,” she lamented.
Introduced in April 2020 to help businesses and non-profits that were forced to close during the height of the pandemic, the federal government’s Canadian Emergency Business Account (CEBA) offered interest-free loans of up to $60,000 through the program. Up to one-third of the loans are eligible to be forgiven if businesses can pay back the outstanding amount by January 18, 2024. Businesses that are not able to make this deadline will lose the forgivable portion, and the debt will be converted into a three-year loan with five per cent annual interest.
The government has offered an additional extension to March 28, 2024, for those businesses who refinance their debt to remain eligible for the forgivable portion of the loan.
Nearly 900 small businesses and non-profits across Canada took out loans through the program. In Quebec, a total of 182,923 businesses were approved for CEBA loans, for a total of over $10 billion in funding. Between 85 and 90 per cent of small- to medium-sized businesses in the Vaudreuil-Soulanges area benefitted from the CEBA program. Miljours explained that the immediate repayment of these loans, or the conversion to interest-bearing loans, would have a negative impact on the regional economy.
“If government assistance was greeted with relief during the Covid-19 pandemic crisis, it must be said that this massive injection of money into the Canadian economy accentuated the inflationary crisis we are currently experiencing, not to mention the labour shortage that is forcing our companies to increase the wages paid to their employees. These are just some of the challenges to which the addition of further financial pressure could have serious consequences on our businesses,” said Miljours.
Galipeau agreed, while suggesting that at a time of economic stagnation – when the cost of living is putting pressure on businesses from all directions – the inaction and rigidity on the part of the government will create additional pressure. “This will undoubtedly force many companies to take drastic measures, such as shutting down their operations for good – either voluntarily or as a result of bankruptcy,” said Galipeau.
Similar calls for an extension have now come from all 13 Canadian premiers, as well as the federal NDP, Bloc Québécois, and Green Party. Over 50,000 small business owners have signed a petition by the Canadian Federation of Independent Businesses calling on the government to extend the deadline.
“We intend to continue to pursue the government, and to use every means at our disposal to obtain an extension. The survival of many businesses in my riding and in the rest of Quebec depends on it,” concluded Claude DeBellefeuille.