Some relief for travel and other hardest-hit businesses in Canada as the federal government announced that it is extending the repayment deadline for small business pandemic loan programs by one year.
The news is a 'win' for advocacy efforts by ACTA and other stakeholder organizations. As Open Jaw has reported, ACTA has been lobbying Ottawa to extend deadlines for repayment, following its survey that revealed that two-thirds of travel business owners believed they couldn't repay debt by the previous, end-of-year deadline.
The organization's survey results, released in JUL, found that 27% of travel businesses owe at least $100,000, 56% owe at least $50,000 and 80% owe at least $10,000 in pandemic government loans.
Crucially, it also found that over one-third of travel business owners thought it was likely or somewhat likely that they will close within 3 years.
In announcing extended repayment terms this week, Prime Minister Justin Trudeau told media that, with respect to the Canada Emergency Business Account (CEBA) loan, any business that hasn't paid back the unforgivable portion of its loan by the deadline is required to repay the entire loan. The remainder of the loan also starts accruing interest after the deadline passes.
The original repayment deadline was the end of 2022, which was then extended to 31DEC 2023. The new deadline will be the end of 2024.
Nearly 900,000 businesses were approved for the program, which distributed just over CAD $49 billion in loans. But only 21% of those businesses had fully repaid their loans as of 31MAY this year.
The federal government has been under immense pressure from a number of business advocacy groups, including ACTA, which as recently as its first 2023 summit in Toronto Thursday encouraged industry members to put more pressure on the government for an extension.
