Northern Ontario tourism businesses survived pandemic to repay CEBA loans, industry says

Representatives of rural and remote northern Ontario tourism operators say they have largely paid back the Canada Emergency Business Account (CEBA) loans that helped them get through the COVID-19 pandemic.

And some operators in northeastern Ontario are doing better than ever as a result of pandemic-era efforts to attract more tourists from within Canada.

"Before the pandemic … 95 per cent of our clientele was from the U.S.," said David MacLachlan, a partner at Lodge 88 on Esnagi Lake and the executive director of Destination Northern Ontario.

"Last summer when we ran the numbers, we were basically 50/50. … You know, even though the border at Sault Ste. Marie has still been down seven per cent … those extra Ontario fishermen more than made up for the loss of American business."

But other operators aren't out of the woods yet, particularly in northwestern Ontario, where American business has been slower to come back, and it's harder to draw business from the Greater Toronto Area, said Gerry Cariou, the executive director of Ontario's Sunset Country Travel Association, which promotes tourism between Upsala and the Manitoba border.

Many tourism operators in the far west of the province struggled to pay the loan back, he said.

Statistics Canada reports on CEBA repayment

CBC News checked in with the industry after Statistics Canada released a report on Tuesday documenting the repayment status of the CEBA loans, which provided more than $49 billion in funding to nearly 900,000 businesses across Canada.

The loans were part of a suite of federal programs offered to businesses during the pandemic to help them survive the drop in revenue caused by border closures and stay-at-home orders. 

Some Canadian business leaders are calling for similar programs to support businesses affected by new United States tariffs.

Under the CEBA, businesses could borrow up to $60,000 interest-free and were offered partial loan forgiveness if they repaid before Jan. 18, 2024. Any loans not paid off by that deadline are due Dec. 31, 2026, and payable at an interest rate of five per cent per year.

StatsCan found that 18.8 per cent of the loans were still outstanding at the time of the forgiveness deadline, but the number was just 13.4 per cent in the traveller accommodations sector.

Agriculture, forestry, fishing and hunting were at less than 10 per cent, though it's unclear how many hunting and fishing tourism operators are so categorized.

MacLachlan said the performance of Ontario's tourism sector is consistent with its performance under previous programs.

"If we went back into the 1980s and '90s, when there was a lot of development programs, the tourism sector had a very, very low default rate on those programs," he said.

Northern Ontario's hunting and fishing tourism operators are heavily reliant on American business and had warned of possible bankruptcies during the pandemic-related border closures, as they had to continue to pay high overhead costs, including, in some cases, the cost of maintaining and insuring small aircraft.

MacLachlan said most companies, in fact, survived, and credited that survival in part to the skill of the business owners.

CEBA helped operators get through lean summer after border closure

MacLachlan also said the CEBA helped his business get through the first year of the pandemic, when he had only approximately 60 guests – down from more than 500 in a typical year. 

The co-owner of Crane's Lochaven Wilderness Lodge in French River told a similar story.

Between 65 and 70 per cent of Crane's pre-pandemic business came from U.S. customers, Sue Crane said.

The CEBA and other government financial supports helped keep the business open while the Cranes worked to attract Canadians from the Greater Toronto Area, who now make up around half of her business.

The Cranes paid off the loan in time to get partial forgiveness, but they did so at the expense of other needed investments in their business, she said.

"We didn't want that hanging over our head," Crane said.

"And also, I mean it was generous of the government to, you know, forgive us for the $10,000. So, you know, that was an incentive to pay it back also."

The executive director of Nature and Outdoor Tourism Ontario (NOTO) said any new government programs aimed at helping businesses through the instability brought on by U.S. tariffs should come with more flexible repayment terms than the CEBA offered.

"I think it would have been wonderful had the government taken a look ... at those sectors that were most heavily impacted by the pandemic and considered, you know, carrying them for longer or … turning those into grants," Laurie Marcil said.

Cariou agreed, saying the government should base the repayment terms on the length of the emergency.

"They only had a half a year under their belt and they had to start paying a fairly large loan payment back," he said.

"And they had to then go to, say, a private financial institution to lend the money … or else they would lose [the loan forgiveness]." 

Cariou would also like to see any future relief money available more quickly than it was made available during COVID, he said.