Manitoba businesses at risk of closure over loan repayment

Deadline looming for pandemic loan repayment The deadline to repay federal pandemic loans is looming and some fear it could force small businesses to close. CTV's Jon Hendricks reports.

Many businesses go through ups and downs, but the pandemic was a major down that many have yet to recover from.

Loans from the federal government helped a lot to survive; however, several businesses in Manitoba are now facing a deadline to pay the money back by Dec. 31.

If they don't pay it back by then, they'll also have to pay back a portion that was supposed to be forgiven. Now, a small business group is warning it could force the closure of thousands of small business in our province.

Judy Weselowski, co-owner of Book Fair Winnipeg, said customers have been leaving the downtown area. She added it was slow progression at first, but then sped up once the pandemic hit.

"Used books suffered because people couldn't come in and browse,” she said.

“We said you tell us what you want, we'll read you the back of the book. But that didn't work that well.”

The store was able to stay afloat with a Canada Emergency Business Account loan from the federal government. The loan must be repaid by the end of the year, but Weselowski said business hasn't recovered and the loan repayment could force its closure.

"If this place went, or any used bookstore like this disappears as they have been doing unfortunately, this is not a good thing for the public,” said long-time customer Danny Blair.

Book Fair Winnipeg isn't alone.

According to the Canadian Federation of Independent Business (CFIB), more than 8,000 small businesses in Manitoba are at risk of closing due to the looming loan repayment.

"They're not back to normal sales levels yet. Not to mention interest rates are on the rise,” said Brianna Solberg with the CFIB.

The CFIB is calling on Ottawa to extend the deadline; however, the Trudeau government isn't offering any commitments to do that.

In a statement to CTV News, a government spokesperson said: “Last year, for eligible loan holders in good standing, we announced that the repayment deadline to qualify for partial loan forgiveness was extended by one year, to Dec. 31, 2023. This was intended to support hard-working business owners as they continue to recover from the pandemic.”

The CFIB is calling on Ottawa to extend the repayment deadline for the loans until at least the end of 2024. Ideally, they'd like an extension to the end of December 2025, and would also like Ottawa to consider additional debt forgiveness.