After studying the federal government’s extension for CEBA loan payments by small businesses, including Canadian travel agencies and independent advisors, ACTA says it is “disappointed” in the actual details of the announcement, which later appeared on the Department of Finance’s website.
Announced last Thursday as ACTA was hosting its eastern Canada regional summit, the association says that it, and many other business associations, were initially “delighted” to hear of the measure of temporary relief that “offered hope to heavily indebted businesses struggling to repay their loans” by Dec. 31, 2023.
However, ACTA president Wendy Paradis says that despite providing more time – one year – to repay the Canada Emergency Business Account, the government is actually taking away the key element of the program – the interest-free partial loan forgiveness offered (worth up to $60,000) – if businesses repay the full amount by the deadline.”
She adds: “Instead of carrying forward the interest-free partial loan forgiveness to the new deadline, the government instead is providing only an 18-day extension to qualify for it – until Jan. 18, 2024. (And) if the loan is not repaid by this date, outstanding CEBA loans will be administered by financial institutions subject to 5% interest.
“Instead of extending forgiveness, the government is charging interest. This is unacceptable,” she charges.
Paradis says that while ACTA is thankful that the government announced more time to repay CEBA and RRRF loans, it is critical that the interest-free forgivable portion of both also be extended immediately.
According to a recent ACTA survey, travel agencies and independent travel advisors continue to struggle with significant debt as a result of enduring and recovering from the COVID-19 pandemic: 27% of businesses owe at least $100,000; 56% owe at least $50,000; 80% owe at least $10,000. And 36% of respondents say it is likely or somewhat likely their business will close within three years.
ACTA says it will double down on its advocacy efforts and that with Parliament’s return this week, advocacy efforts will intensify through Dec 3 with a vigorous advocacy strategy that includes the continuation of a letter writing campaign that began on Aug. 29, as well as collaboration with stakeholders.
“We need to make it clear that this CEBA extension is by no means enough to help our members,” says Paradis. “We will continue to work alongside other stakeholders in our coalition to make sure the message gets through.”
ACTA is asking that the deadline to repay CEBA and RRRF loans be extended by two years from Dec 31, 2023, to Dec. 31, 2025 – and that the government extend access to the interest-free forgivable portion of both for two years.
The association will also advocate for relief on federal HASCAP (Highly Affected Sectors Credit Availability Program) loans, though terms of that program are different than CEBA and RRRF.