One in five restaurants in Canada at risk as CEBA deadline looms, say advocates
The food service industry could be decimated by a wave of closures if the federal government does not extend the Jan. 18 deadline for the repayment of loans under the Canada Emergency Business Account program, two industry groups are warning.
Restaurants Canada, a not-for-profit association advocating for the food service industry, said Jan. 8 that the looming deadline could prove disastrous for the sector, which has been operating under the strain of debts incurred during the pandemic as well as other economic factors beyond its control.
“Immediate action is essential to prevent further closures and ensure the long-term survival of this critical sector, which contributes significantly to the nation’s economy,” the association said in a press release.
We are not asking for a handout; we are asking for more time
The call was echoed by the Canadian Federation of Independent Business (CFIB), which advocates on behalf of more than 97,000 small businesses.
According to a CFIB survey, nearly one-fourth of those who received loans through the Canada Emergency Business Account (CEBA) are likely to miss the repayment deadline.
If small businesses fail to repay the loan on time, or if they haven’t arranged a refinancing extension with their bank, they will forfeit the chance to have up to $20,000 of the loan forgiven. Additionally, they will start incurring interest on the remaining principal amount.
The federal government has maintained the original CEBA loan repayment deadline of Jan. 18, 2024, despite persistent appeals by businesses for an extension.
Dan Kelly, chief executive of the CFIB, said the government’s hasty distribution of loans during the pandemic has led to ongoing confusion among small business owners.
“I think at
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