The Tourism Industry Association of Canada (TIAC) has responded to the Government's "overall runway of the Canada Emergency Business Account."
CEBA was created to assist small businesses affected by pandemic restrictions. The program provided interest-free loans backed by the government, with a maximum of $60,000 available per business. Up to $20,000 could be forgiven if the loan was repaid by the deadline, which was initially the end of 2022 but was later extended to the end of 2023.
As reported by Open Jaw on Thursday, 14SEP, it has been announced that the deadline for repayment will be extended to the end of 2024.
However, although Prime Minister Justin Trudeau says the government is extending the repayment deadline for its small business pandemic loan program by one year — businesses will still lose the forgivable portion of the loan if they don't repay in the coming months.
In the announcement made by Trudeau on Thursday, he outlined, "While many have paid these loans back, we know that some need a bit more runway." As a result, businesses will be given a small extension to qualify for debt forgiveness. — until 18JAN 2024.
Businesses that refinanced their loans will be given a three-month extension - until 28MAR - to qualify.
The TIAC said it's disappointed in the government's announcement, indicating that extending the forgiveness period by only three months is inadequate to resolve the significant financial stress that operators face. This includes dealing with the adverse effects of inflation and high-interest rates.
"We appreciate the government's efforts to support businesses, however, we must emphasize that a mere three-month loan forgiveness extension for businesses needing to refinance does not align with the severity of the crisis," said Beth Potter, President and CEO of TIAC. "This falls short of adequately addressing the immense financial strain and uncertainty that our members are experiencing."
Last month, ACTA launched an urgent advocacy drive to urge Ottawa to provide relief on pandemic-era loans as two-thirds of travel business owners say they can't repay debt by the end-of-year deadline.
The TIAC said the tourism industry still needs to overcome immense challenges due to the absence of international travellers, closures, and fluctuating domestic demand. Many businesses in the sector struggle to survive, especially small and medium-sized enterprises across the country. The recent extension of the loan forgiveness period has raised concerns about the viability of these businesses.
TIAC urged the Government to "reevaluate this decision for the tourism sector and extend the forgiveness period significantly to provide necessary breathing space for a full recovery."
