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Deadline for CEBA repayments hits as business groups warn of closures [Video]

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Canadian Economy and Markets

Deadline for CEBA repayments hits as business groups warn of closures

The deadline for Canadian businesses to repay pandemic loans and receive partial forgiveness arrived Thursday, despite push back from some business groups that warn it could lead to closures.

Nearly 900,000 small businesses and non-profit groups received the pandemic-era Canada Emergency Business Account loan of up to $60,000, interest-free.

Should businesses repay the outstanding amount by Thursday, up to one third of the loan could be forgiven. Otherwise, the remaining debt will be converted to a three-year loan with a five per cent annual interest.

An alternative option is additionally available. Businesses can choose to refinance the loan with a financial institution by March 28 and remain eligible for partial forgiveness.

Both the Canadian Federation of Independent Business and Restaurants Canada have called on the government to extend the deadline after it was already pushed twice.

The CFIB says a significant number of businesses, about 20 per cent of CEBA loan takers, will not be able to meet today’s deadline and will be placed into a $60-thousand loan. And will loose the access to the forgivable portion of the loan.

Businesses in Hamilton and the surrounding areas have raised concerns about the sustainability of local stores in the wake of the CEBA deadline.

Kyle Ferreira, owner of Bar Sazerac in Hamilton, says he was not able to pay back his CEBA loan by today’s deadline but is working hard to keep his business open.

Ferreira says “its especially disheartening to have for the past four years through a difficult time in world history, the pandemic, make it to the other side, and be knocked down by something you really couldn’t account for.”

The CFIB says that businesses will see their pandemic debt rise by 50 per cent, while Restaurants Canada warns that one in five restaurants with outstanding CEBA loans are on the brink of closing.

Ferreira says the debt makes the bar’s future uncertain. Though he remains wary and says, “I’m confident that I’ll be able to exist tomorrow, further than that, I can’t tell you.”

These organizations aren’t alone in their concern.

Jacques Long is the owner of another business in Hamilton, he has owned JMS Treasure Chest on Ottawa Street for 12 years. He says he’ll be shutting the doors of his antique shop if the federal government doesn’t extend the deadline to pay back his pandemic loan.

“If they don’t extend the deadline for the payment, the repayment, we will have to close,” said Long.

While not facing a shut down like the Longs, not-for-profit community organization The Bridge says that they too are very worried about repaying and say they has to fundraise and even dip into their operating budget to cover the cost.

“We’re looking roughly around 20,000 dollars this year on top of what we normally need for our budget to kind of help fill that gap.” says Sarah Worry, a member of the group that helps prisoners reintegrate into the community.

Despite the push back, the deadline stands firm and on Wednesday, Prime Minister Justin Trudeau said it is time to wrap up pandemic financial aid programs.

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