The Yukon Party is joining business organizations calling for the federal Liberal government to give businesses more time to pay back “much-needed” loans received to keep their operations going during the COVID-19 pandemic.
A July 24 letter sent via email to Finance Minister Chrystia Freeland is attributed to industry associations representing hundreds of thousands of businesses across Canada, including the Yukon Chamber of Commerce and the Tourism Industry Association of the Yukon. The letter is urging the feds to push back the Canada Emergency Business Account, known as CEBA, repayment deadline by at least a year or two while maintaining access to the forgivable portion.
“Extending the repayment timeline for the CEBA loan without losing access to the forgivable portion would give many small-and-medium-size businesses the stability and certainty they need to get back on their feet on a path to prosperity,” reads the letter.
An Aug. 1 release from the Yukon Party notes that many small businesses are still not yet back on their feet, with a combination of high interest rates, inflation and increased labour costs putting limits on businesses’ ability to recover.
Yukon Party Leader Currie Dixon also wrote to Freeland to echo the call from businesses.
“Small and medium-sized businesses are the lifeblood of our economy, and many are still suffering after a disastrous past few years,” Dixon said in the release.
“Now is not the time to add to their cost of doing business. The federal government should extend the repayment deadline for CEBA loans to allow businesses to get their heads above water.”
Only 21 per cent of businesses have fully repaid their loans as of May 31, according to data provided by the federal Finance department. Yukon-specific numbers were not available by press time.
The up to $60,000 loans were given to about 890,000 businesses and non-profits, representing approximately $49 billion, to help them “weather the storm” when the COVID-19 pandemic hit, Katherine Cuplinskas, press secretary for the federal Finance minister, said by email on Aug. 2.
That includes 910 businesses in the Yukon, making up $48 million, according to the federal government’s website.
A spokesperson said the Finance department is predicting that businesses that can repay their loans in time to benefit from the forgiveness will do so closer to the repayment deadline given there is no penalty.
Dec. 31 is the deadline for businesses to repay their loans in order to receive forgiveness. Businesses that can’t meet that deadline will be given another two years to repay the borrowed money without forgiveness, per the department spokesperson.
For example, a business that borrowed $60,000 and paid back $40,000 by the current deadline will get $20,000 in available forgiveness.
The letter from industry associations cites data from recent surveys focused on CEBA loan-holder companies.
Canadian Federation of Independent Business data suggests that about half (49 per cent) of small businesses are still making below-normal revenues.
Restaurants Canada data suggests that half (50 per cent) of food service operators are operating at a loss or breaking even, which compares to 12 per cent before the pandemic.
Tourism Industry Association of Canada data suggests that 45 per cent of businesses are likely or somewhat likely to shut down within the next three years without the government intervening in their mounting debt loads.
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