Government to extend pandemic small business loan repayment deadline by 1 year

Prime Minister Justin Trudeau says his government is extending the repayment deadline for its small business pandemic loan program by one year.

The Canada Emergency Business Account (CEBA) was introduced at the height of the pandemic to help out small businesses forced to close or limit their operations due to public health measures. The program offered interest-free loans backed by the federal government.

Any business that hasn’t paid back the unforgivable portion of its loan by the deadline is required to repay the entire loan. The remainder of the loan also starts accruing interest after the deadline passes.

The original repayment deadline was the end of 2022. It was later extended to the end of 2023.

Trudeau said on Wednesday that the deadline will be extended again to the end of 2024.

Nearly 900,000 businesses were approved for the program, which distributed just over $49 billion in loans. But only 21 per cent of those businesses had fully repaid their loans as of May 31.

The federal government has been under immense pressure from a number of business advocacy groups to extend the deadline past 2023. Other have been calling for complete forgiveness of the outstanding loans.