UPDATE & RECOMMENDATIONS FROM CFIB PRESIDENT RE: RECENT CEBA CHANGES
As you know, the entire CFIB team has been working hard to push back the date at which point small businesses lose the forgivable portion of CEBA (up to $20,000).
After months of lobbying, dozens of meetings with MPs, and over 40,000 signed petitions from small business owners we have delivered to government since the start of 2023, the government announced changes to the CEBA repayment process on September 14, 2023.
The Prime Minister himself announced that CEBA loans would be extended by one year. Journalists, small business owners and even Liberal MPs all believed this meant that small business owners would have an extra year to repay $40,000 on their CEBA loan in order to keep the $20,000 forgivable portion.
But sadly, this isn’t true at all.
The confusion is that there are 2 CEBA deadlines. The first is the December 31, 2023 deadline to repay in order to keep the forgivable portion. That deadline was extended—but only by 18 days – to January 18, 2024.
The extra year is for those who miss out on the forgivable portion – they now have 3 years rather than 2 to pay back the full $60,000 CEBA loan (by the end of 2026). While this will be helpful for some, it is not the deadline small businesses were worried about.
Since this announcement, I’ve heard from hundreds of small business owners who feel that the government deliberately misled them on what was changing and that the change that was made misses the mark entirely.
Business owners have every right to be angry about how the government is treating them. The government is now telling business owners that they should simply convert their CEBA loan to a regular bank loan in order to secure the forgivable portion. In fact, the government has created a special provision allowing those who apply for a bank loan to repay CEBA before January 18 to have until March 28 to convert their loans in order to keep the forgivable portion. This is essentially like government telling a family struggling to pay their Visa bill to simply apply for a Mastercard.
Instead of two CEBA deadlines, we now have three. Here is a summary of these new dates.
|Deadline to keep the forgivable portion (up to $20K) by repaying the balance (up to $40K).
||Dec. 31, 2023
||Jan. 18, 2024
|Deadline to keep the forgivable portion if you have an application in process before Jan. 18, 2024 for a bank loan to repay CEBA.
||Mar. 28, 2024
|Deadline to repay the entire CEBA loan (up to $60K) if you miss the forgivable deadlines.
||Dec. 31, 2025
||Dec. 31, 2026
So where do we go from here?
First, despite the incredibly short time frame, CFIB will continue our campaign for further changes to the deadlines. Now that the government has pushed the forgivable deadline to January 18, 2024, we are calling on them to further move it to December 31, 2024 to give small business owners a full extra year to repay the $40,000 while protecting the $20,000 forgivable portion.
This, combined with the other changes they did announce, would make it a package CFIB can support.
But many business owners are asking us for advice on what they should do? Should business owners hold out hope for a further change, or is this the time to try to borrow $40,000 in order to pay the balance to ensure they are able to keep the $20,000 forgivable portion?
My best advice is that 2 strategies are needed:
- I ask you to join the final push for a further change to the repayment deadline. Make sure you sign (or re-sign) the new petition we’ve created to call on government to push the forgivable deadline to December 31, 2024. Share the petition with other business owners. Call your MP right away to let them know the changes are not good enough and a further fix is required.
- Take steps now to be prepared if government doesn’t make any further changes. If you do not have the money to repay up to $40,000 before January 18, 2024, it would be wise to see if your bank will offer you a term loan to allow you to keep the forgivable portion. In most cases, if you are able to get a term loan, it will be less expensive than losing out the $20,000 forgivable portion.
CFIB will do everything we can to get a further delay in the forgivable deadline. But as we can’t be certain that further changes will be made at the 11th hour, we want to ensure small business owners are prepared before January 18th of next year. CFIB is also working on a list of alternative lenders for those who are not able to secure a term loan with their bank.
As always, please feel free to call CFIB’s Business Helpline if our team can be of any assistance along the way.
We haven’t given up and we never go away. Thanks for your ongoing support!
President and CEO