Last Thursday, 14SEP, Prime Minister Trudeau announced that more time - one year - would be provided for small businesses, including travel agencies and independent travel advisors, to repay CEBA loans (Canada Emergency Business Account), which were due to be repaid by 31DEC 2023.
At the time, this appeared to be good news for struggling business owners.
Then, when industry leaders and advocates got to read the fine print, the other shoe dropped.
"Hours after the announcement, new details appeared on the Department of Finance website that described a very different picture," said Wendy Paradis, ACTA President.
Although more time would be given to repay CEBA loans, the Canadian government had removed the interest-free loan forgiveness (worth up to $60,000 if businesses repaid the total amount by the deadline).
Paradis noted: "Instead of carrying forward the interest-free partial loan forgiveness to the new deadline, the government is providing only an 18-day extension to qualify for it."
As Open Jaw reported TIAC already expressed disappointment with the government's one hand giveth, one hand taketh away approach.
"This falls short of adequately addressing the immense financial strain and uncertainty that our members are experiencing," said Beth Potter, President and CEO of TIAC
The Association of Canadian Travel Agencies and Travel Advisors (ACTA) echoed the TIAC's frustration, releasing a statement on 19SEP reiterating that "this is unacceptable."
If the loan is not repaid by the new date, outstanding CEBA loans will be administered by financial institutions subject to 5% interest.
According to the Globe and Mail, "The Big Six banks say they are open to refinancing Canada Emergency Business Account loans for small businesses, though they provided few details and say new terms will have to be decided on a case-by-case basis."
"Some alternative lenders have already started advertising their CEBA refinancing programs. Those loans may be available for business owners who can't get reapproved at a bank, but will likely feature even higher interest rates," reports the Globe and Mail.
Paradis added, "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 due to enduring and recovering from the COVID-19 pandemic.
"27% of businesses owe at least CAD $100,000; 56% owe at least CAD $50,000; 80% owe at least CAD $10,000. And 36% of respondents say it is likely or somewhat likely their business will close within 3 years."
ACTA has plans to intensify its advocacy efforts through 04DEC 2023, including a letter-writing campaign that began on 29AUG.
"We need to make it clear that this CEBA extension is by no means enough to help our members," said 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 31DEC 2023 to 31DEC 2025. It says it will also advocate for relief on federal HASCAP (Highly Affected Sectors Credit Availability Program) loans, though the terms of that program are different than CEBA and RRRF.
