Thousands of small businesses holding COVID emergency loans losing $10,000 or more as they are now deemed ineligible

Toronto, October 17, 2022 – The Canadian Federation of Independent Business (CFIB) is urging the federal government to ensure small businesses that received the Canada Emergency Business Account (CEBA) loans in good faith but are now deemed ineligible get to keep the $10-20,000 forgivable portion of the loan as other applicants.

“The CEBA program was incredibly helpful to over 900,000 small businesses as it provided an interest free $40-$60,000 loan to help them through the pandemic. One of the most important features was that $10-$20,000 of the loan would be forgiven by government upon repayment of the balance, allowing the business to retire a portion of the debt many were forced to take on to survive lockdowns and restrictions,” said Corinne Pohlmann, Senior Vice-President of National Affairs and CFIB. “Unfortunately, thousands of small businesses are now being contacted by their financial institutions demanding that they pay back their CEBA loan in full by end of 2023 because they have now been deemed ineligible in the first place.”

“It is deeply unfair to force small businesses that received a government-backed loan in good faith to lose one of its key benefits,” said Dan Kelly, CFIB President. “While businesses were given some time to provide more information to qualify, it feels like government has forgotten that many were fighting every day for the very survival of their businesses during lockdowns and restrictions. Making businesses who applied and received funds repay the full amount will push some over the edge given the massive debt load many accumulated due to the pandemic.”

Other than in cases of outright fraud, CFIB is calling on government to allow any business that received a CEBA loan to keep the forgivable portion upon repayment of the balance. At minimum, government needs to ensure there is a fresh process for businesses to requalify and to address cases of extreme hardship.

Since coming out of COVID, small businesses have been dealing with high input costs, inflation, labour shortages and supply chain challenges. The latest data on CFIB’s Small Business Recovery Dashboard shows that 58% of small businesses are still making less than their normal revenues and 64% are carrying pandemic debt at an average of $144,000.

Throughout the pandemic, government made changes to its programs to address the changing nature of the pandemic. Small businesses were pleased government listened to earlier CFIB advice by allowing all CEBA recipients to repay the loan by the end of 2023, rather than the earlier deadline of December 31, 2022. CFIB urges government to continue this approach by making the following changes:

  • Ensure all CEBA loan recipients who received it in good faith but are now deemed ineligible get to keep the forgivable portion if they repay the loan by the end of 2023
  • Increase the forgivable portion of all CEBA loans to at least 50%
  • Extend the repayment deadline of the CEBA loan for an additional year to December 2024
“Implementing these recommendations will help ensure more businesses are in a position to recover and repay the balance of their loans in full,” Kelly concluded.

Business owners can add their voice to CFIB’s petition and ask government to expand and extend CEBA loans for businesses.

For media enquiries or interviews, please contact:
Milena Stanoeva, CFIB

About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 95,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at