Forgive federal pandemic business loans, says accountant behind petition

An Ottawa accountant is urging the federal government to consider forgiving pandemic loans for small businesses, as many are strugglingto pay the money back by the deadline.

Moe Tabesh started a petition that has more than 13,000 signatures callingon the government to consider forgivingloans paid out through theCanada Emergency Business Account (CEBA).

The federally backed loan wasintroduced in April 2020 to help businesses during the height of the pandemic.

Nearly 900,000 small businesses and non-profits across the country tapped into CEBA, receiving up to $60,000 each. Atotal of $49 billion was paid out,according to the federal Department of Finance.

The majority of hundreds of Tabesh's clients applied for the loan but the problem, he said, is that many of them haven't bounced back and are struggling to make ends meetlet alone repay thousands of dollars.

"It's just mad. You can't afford it," said Tabesh, a chartered accountant with NumetricaCity. He addedthat it's not fair to ask people to repay that much money at a time when interest rates have climbed above seven per cent.

"The outlook is pretty bleak," agreedrestaurateur Sarah Chown, who is also the Ottawa chair of the Ontario Restaurant and Hotel and Motel Association.

"Nationwide you're looking at50 per centof businessesoperating either at a loss or just breaking even."

$20K of loan forgiveness at stake

In September, the government granted an extension of the repaymentdeadlinefrom Dec. 31, 2023 to Jan. 18, 2024.

Chown said CEBA was "a lifeline at the time" for many restaurants, but it's unclear if many will be able to repay by the current January deadline.

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Sarah Chown, managing partner of the Metropolitain Brasserie, said the restaurant industry is facing several challenges due to rising inflation and higher food costs. As the deadline to repay pandemic loans approaches, Chown said not a lot of businesses are going to be in the position to repay their outstanding amounts by Jan. 18, 2024, meaning theyll miss out on having up to one third of the loan forgiven.

It's a possibility many struggling businesses are facing and it means losing out on up to $20,000 of loan forgiveness. Those who don't repay by mid-January will instead have three more years to pay back CEBA in full.

Florist Vanessa Bishop said she'll likely be able to pay back her loan, but it will mean some tough decisions.

"It's going to be a choice between paying that off and then paying off taxes or paying payroll," she said.

Tabesh's petition is the latest in a chorus calling on the federal government to provide more leniency for borrowers.

• Premiers across Canada call for extension of CEBA loan repayment deadline

In a statement Tuesday, the Canadian Federation of Independent Business(CFIB) renewed its calls to have the CEBA repayment deadline extended to the end of next year.

"We're already seeing a wave of business closures and fewer people wanting to become entrepreneurs," said Corinne Pohlmann with CFIB.

"We worry this situation will become worse if the CEBA forgivable deadline is not extended."

Deadlines final

Tabesh doesn't necessarily expect the federal government to bite on his proposal to eliminate CEBA debts completely, but said he hopes it gets them to consider the impact paying back this loan would have on businesses.

"Maybe we could sit down and say, 'OK,how can we help small businesses either pay this or we give them more time to pay or put it on a payment plan.'"

On the Canadian government's CEBA web page, it writes that "all program eligibility determinations, application outcomes and repayment deadlines are now final and cannot be changed."

In a statement to CBC, Department of Finance spokesperson Katherine Cuplinskaswrote "the additional flexibility that we announced is significant support for small businesses who might still be struggling to make ends meet."