Alberta Chambers of Commerce warns many businesses will struggle to pay back CEBA loans by deadline

The Alberta Chambers of Commerce says it has conducted a survey that found 41 per cent of businesses in the province will struggle to pay back Canada Emergency Business Account (CEBA) loans by the federal government’s Jan. 18 deadline.

“We have the statistical data supporting the fact that we know businesses in Alberta are being challenged by the repayment of this loan,” said Alberta Chambers of Commerce CEO and president Shauna Feth.

The organization said the survey involved 500 businesses in the province.

Businesses that meet the Jan. 18 deadline keep the forgivable portion; that means businesses that took the maximum $60,000 loan only have to repay $40,000.

The Canadian Federation of Independent Business (CFIB) has conducted its own study and found 25 per cent of Alberta businesses will not meet the deadline.

“We look at the (COVID-19) pandemic and how the pandemic has impacted businesses as well with restrictions and the need to take on debt, so it is looking to be a challenging year for businesses,” said Andrew Sennyah, a senior policy analyst with the CFIB.

“Adding the CEBA repayment at this point and time, it’ll be even more challenging.”

2:29 Small businesses push to extend CEBA loan repayment deadline

Mark Wilson, the co-owner of an Edmonton business called Vivid Print, said his business is one of those that will not be able to meet the deadline.

“We’ve been able to pay approximately 30 per cent of that loan back … (there are) pressures of inflation and interest rates (and) consumer spending hasn’t returned to pre-pandemic levels,” he said.

According to the federal government, a business that does not repay the loan by Jan. 18 has three years to pay it back and only has to pay off the five per cent interest during that period. However, the business loses the forgivable portion.

“The businesses that have been able to pay that loan back probably didn’t need them in the first place, and my colleagues on the avenue (Whyte Avenue) that I’ve spoken to, the ones that did need it all, are in the same situation that we’re in,” Wilson said.

The CFIB said one-in-five Alberta businesses are in danger of closure. Wilson worries that needing to pay off the CEBA loan is a factor in businesses struggling.

“We made it through the pandemic, but in the end, what killed a lot of independent businesses off was having to navigate that loan.”

The Alberta Chambers of Commerce and CFIB are both pushing for the Jan. 18 deadline to be extended until the end of 2024.

“That would be an enormous help because I think we have been seeing a recovery happen,” Wilson said.

“We’re seeing inflation stabilize, we’re seeing interest rates stabilize, and I think consumer confidence is returning and that would certainly be helpful for a lot of businesses.”

The federal government has reset the CEBA loan deadline twice after it was initially scheduled for the end of 2022.