One-fifth of Alberta businesses 'most likely' to close due to looming CEBA repayment deadline: CFIB

Businesses facing CEBA loan deadline The Alberta Chamber of Commerce says thousands of businesses are struggling to pay their CEBA loans. Chelan Skulski reports.

A deadline looms for businesses to pay back loans received during the COVID-19 pandemic from the federal government — and as a result, says the Alberta Chamber of Commerce, thousands of them are at risk of closing.

Businesses have until Jan. 18 to pay back the Canadian Emergency Business Account (CEBA) loans.

Shauna Feth, the chamber's president and CEO, told CTV News Edmonton on Wednesday that 41 per cent of more than 500 members her organization surveyed just before Christmas said they're not able to repay their CEBA loans by the deadline.

Feth said even though the deadline is a little more than a week away, the chamber is "still trying to bang the drum."

"We've been saying it all along that during the COVID lockdowns, businesses were challenged in a much different way than individuals were from a financial perspective in terms of being able to make a living for themselves and their families," she said. "That's really what we're talking about. We're just wanting to fight the fight for our small businesses in the province that are still struggling trying to repay this loan."

Andrew Sennyah, the Alberta senior policy analyst for the Canadian Federation of Independent Business, says recent data generated by the CFIB suggests a quarter of businesses in the province could be affected by the deadline.

"We calculated that (approximately) one in five are most likely going to close because of the CEBA repayment," he told CTV News Edmonton.

In a statement, a spokesperson for federal Finance Minister Chrystia Freeland says businesses have three years to repay loans, adding the program "was an essential part of the federal government’s swift response to the COVID-19 pandemic."

Across the country, 898,271 businesses applied for CEBA loans totalling more than $49 billion.

Originally, businesses could receive up to $40,000 from the federal government. The limit was increased in December 2020 to $60,000. More than half a million businesses took advantage of the extra $20,000 loan.

Ottawa set the deadline to repay the loans in full on Dec. 31, 2022, extending it twice: to Dec. 31, 2023, then to Jan. 18 this year.

Both the Alberta chamber and the Canadian Federation of Independent Businesses want the federal government to extend the deadline to the end of 2024.

The provincial government supports the chamber's request for an extension. In a statement to CTV News Edmonton, a spokesperson for Alberta Finance Minister Nate Horner, who met with Feth this week to discuss the situation, said "Premier (Danielle) Smith joined other premiers in signing a letter asking for the federal government to extend the deadline."

Nate Box, the founder and CEO of Black Box Hospitality -- which operates four Edmonton restaurants -- says repaying the loans isn't as simple as asking the bank to come to the rescue with refinancing help.

"For the average small business owner ... most people have put their house and everything they own on the line in order to open up shop," Box said. "That's probably the majority of most independent restaurants, in fact, like most independent businesses.

"The hard part is that when the feds have already given you money, and then they say, 'Oh, just go back to the bank to give you more.' The banks aren't in the business of lending money, certainly to high-risk industries like the restaurant industry, so for us, it's a real challenge. It's like a huge blow to our cash flow."

Sennyah says that just like few expected a pandemic and its resulting restrictions, "nobody expected the economic conditions post-pandemic."

"I think it's very easy for the federal government to say, 'You've been given time.' Business owners are not abdicating the responsibility to repay these loans," he said.

"They're more than willing to repay these loans, but let's be honest, everyone's paycheques have gotten a little smaller as of Jan. 1, people are choosing to spend their money differently, confidence among business owners going into the busiest season — the holiday season last year — was so low ... What businesses would like to do is repay the loan, but we just need more time, and time is super important for businesses."

Box said he and other restaurant owners don't all have "a Plan B" and that their involvement in the industry is their "livelihood."

"I've been in the restaurant industry for 25 years — if it is getting gutted, then it's not like I was a trained accountant before or an engineer before or an architect before, a lawyer before that," he said.

"Will we adapt through this? Yes. Would it be nice to have the federal or any level of government step up more to the plate and realize the integral part that restaurants play or hospitality plays or retail plays in a city or in a region's vitality? Yes, but I'm not seeing it in as far as tangible efforts outside of the grants."

With files from CTV News Edmonton's Chelan Skulski.