ACTA Says CEBA Extension Is ‘Not Enough’
After digging into the details of last week’s announcement by Prime Minister Justin Trudeau that more time –one year– would be provided for small businesses, including travel agencies and independent travel advisors, to repay CEBA loans – the Canada Emergency Business Account– which were due to be repaid by Dec. 31, 2023, ACTA say it is ‘disappointed.’
At the time, ACTA and many other business associations were delighted to hear of this measure of temporary relief that offered hope to heavily indebted businesses struggling to repay their loans.
However, ACTA was very disappointed to read the actual details of the announcement that came later.
Wendy Paradis, president of ACTA, said: “Hours after the announcement, new details appeared on the Department of Finance website that described a very different picture.”
Paradis continued: “Although more time to repay CEBA loans was being offered, the government was taking away the key element of the program – the interest-free partial loan forgiveness offered (worth up to $60,000) —if businesses repay the full amount by the deadline.”
As a result, ACTA’s president pointed out that: “Instead of carrying forward the interest-free partial loan forgiveness to the new deadline, the government instead is providing only an 18-day extension to qualify for it – until Jan. 18, 2024. If the loan is not repaid by this date, outstanding CEBA loans will be administered by financial institutions subject to 5% interest. Instead of extending forgiveness, the government is charging interest. This is unacceptable.”
Paradis said that while ACTA is thankful that the government announced more time to repay CEBA and RRRF loans, it is critical that the interest-free forgivable portion of both also be extended immediately.
According to a recent ACTA survey, travel agencies and independent travel advisors continue to struggle with significant debt as a result of enduring and recovering from the COVID-19 pandemic. 27% of businesses owe at least $100,000; 56% owe at least $50,000; 80% owe at least $10,000. 36% of respondents say it is likely or somewhat likely their business will close within 3 years.
With Parliament back to business this week, ACTA will be intensifying its advocacy efforts through Dec 3, 2023 with a vigorous strategy which includes the letter writing campaign that began on August 29 and collaboration with stakeholders.
Said Paradis: “We need to make it clear that this CEBA extension is by no means enough to help our members. We will continue to work alongside other stakeholders in our coalition to make sure the message gets through.”
ACTA is asking that the deadline to repay CEBA and RRRF loans be extended by two years from Dec 31, 2023 to Dec. 31, 2025 — and that the government extend access to the interest-free forgivable portion of both for two years.
The association will also advocate for relief on federal HASCAP (Highly Affected Sectors Credit Availability Program) loans, though terms of that program are different than CEBA and RRRF.
ACTA will target the Government of Canada in their efforts including Members of Parliament, Finance Minister Chrystia Freeland and additional cabinet members
Go to www.acta.ca for more.
