Small businesses in B.C. say 2-week federal loan extension a 'slap in the face'
Entrepreneurs and advocates say what Ottawa touts as a lifeline falls far short
North Vancouver shopkeeper Tamara Nowakowsky says she was relieved on Thursday to hear Ottawa had postponed its year-end deadline to repay $50,000.
Her Delish General Store and Jar Bar Refillery is one of nearly 900,000 recipients of the Canada Emergency Business Account (CEBA), which helped many survive the pandemic.
But because of inflation's rising costs and falling sales, she said, she's been "fighting to save" her two shops — and couldn't meet Ottawa's Dec. 31 deadline.
So it seemed the government had finally heard the pleas of small business owners like her, she thought.
"And then I read that it was two weeks," she told CBC News in her shop on Saturday. "What good does that do anybody in my situation?
"It's just another bucket of water out of the sinking ship, but it doesn't right the ship."
The CEBA loans, up to $60,000, were meant to help small businesses and non-profits survive the pandemic.
Ottawa's original deadline was already deferred once last year. But until this week recipients had less than four months to repay — or lose the one-third forgivable portion of the debt.
On Thursday, after months of pressure from the Canadian Federation of Independent Businesses (CFIB), the federal government announced it would again push back the deadline to get that loan forgiveness — from Dec. 31 to Jan. 18.
After that date, outstanding loans will convert into three-year loans with five per cent interest.
"The bottom line is that, if you are a small business and do not currently have the funds to repay your CEBA loan, you now have three years to repay it in full," a finance ministry spokesperson said in an email.
"The additional flexibility that we announced [Thursday] is significant support for small businesses who might still be struggling to make ends meet."
'They've really missed the point'
According to the CFIB, however, what Ottawa sees as a lifeline actually falls far short.
It said that, as of last month, only 19 per cent of B.C. recipients of CEBA have repaid, and the advocacy organization believes up to a quarter-million small businesses across Canada could be forced to close even with the extended deadline.
"They've really missed the point of what small businesses are struggling with the most," said Emily Boston, a Vancouver-based policy analyst with CFIB.
"Our communities benefit from their bravery and from their hard work — it's a slap in the face to be told that it just wasn't enough and that it's not going to cut it in time."
She said few such entrepreneurs could afford the extra $20,000 they'd have to pay over three years if they gave up on the forgivable part of the loan.
"We hope that the government does extend the deadline for the forgivable portion of the loan so that these small business owners can make ends meet and continue to survive," she said.
The finance ministry countered that loan recipients could file a refinancing application to whichever bank first handled their CEBA money. Getting approved would buy them until late March.
"To give us just an extra two weeks to get that $20,000 of forgiveness … that affects my bottom line in a very big way," Nowakowsky said.
Compromise, flexibility sought
Another CEBA recipient in B.C. has had to take significant steps to keep his coffee shop afloat as inflation takes its toll.
Evan Falck co-owns The Island Grind Coffee & Tea in Campbell River, B.C., about 265 kilometres northeast of Victoria.
He said he's had to remove popular but costly items from his menu, raise prices to the point of customer complaint, and stop buying some baked goods made by other local food businesses. He's also asked his staff to work inconvenient split shifts to restrain his losses.
"Six months from last summer until May this year, we didn't see a profit," he told CBC News. "Just the rising cost of everything — we were able to get through there by the skin of our teeth for sure."
He had hoped to see the government create a payment plan that still ensures CEBA recipients get the partial forgiveness they'd been counting on. He proposed asking recipients to repay $10,000 every six months, for example, in order to qualify for their $20,000 forgiveness.
"I hope the government considers … a compromise," he noted. "Something a little more flexible."
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