Struggling businesses in Surrey, BC are asking Ottawa to extend pandemic loan repayment terms

The Surrey Board of Trade says it is urging Ottawa to re-extend the rapidly approaching emergency pandemic loan repayment deadline. It says many small businesses won’t be able to pay back without closing.

President and CEO Anita Huberman says about 600 businesses in Surrey, southeast of Vancouver, most with only a handful of employees, are already grappling with a “perfect storm” of rising costs, supply chain delays and labor shortages.

And with the deadline to repay the Canada Emergency Business Account (CEBA) loans in December, “another ingredient in the perfect storm is about to emerge as we face the ‘great opportunity’ to pay back their loan that they can’t pay back by this time,” Huberman told CBC.

“Everything is on the line right now in terms of profitability.”

About 890,000 small businesses and nonprofits across Canada have received more than $49 billion in loans through the CEBA program, according to a spokesperson for the federal Treasury Department.

The interest-free loans, administered by private banks but guaranteed by the federal government, provided up to $60,000 to eligible businesses for pandemic adaptations and personal protective equipment, and were originally due for repayment on December 31, 2022.

Last year, Ottawa extended the deadline by one year to December 31, 2023, so that the company qualifies for a one-third loan forgiveness and pays no interest.

But if companies can’t pay in full by the end of this year, they’ll no longer be eligible for a waiver and must pay back the total by December 31, 2025, plus 5 percent interest.

Huberman says extending the deadline for full, interest-free repayment to December 2025 could be the difference between closing a business or surviving.

“It would give companies an opportunity to save money, to pay back that loan, to make money,” Huberman said.

Many businesses, including those in retail, arts and culture and manufacturing, have still not returned to pre-pandemic levels of business and profit margins, she added.

In a statement to CBC News, a spokesperson for the federal Treasury Department declined to comment on whether the deadline would be extended again.

“When the COVID-19 pandemic hit, the federal government acted quickly to provide emergency relief and ensure Canadians and Canadian businesses weathered the storm,” said Katherine Cuplinskas, pointing to the original one-year extension.

“This program was central to ensuring that Canadian small businesses could not only survive the pandemic, but also thrive during the recovery.”

Reconstruction efforts ‘crawl ahead’

The rehabilitation of Nela Hallwas’ inclusive dance studio for children and adults in South Surrey is still ongoing.

Hallwas, founder and director of XBa Dance Center, says the pandemic decimated her studio, which offers classes for children with disabilities, overnight in 2020.

“The last thing I wanted was a loan,” Hallwas told CBC. “I had no choice.”

Hallwas received $40,000 from CEBA, $10,000 of which she would be forgiven if she repaid the remainder on time.

But she has since said her bank told her to pay back the entire amount, which she can’t do without cashing in her retirement savings.

She has paid her staff but has not received a salary in three years and says costs for rent, recital theaters and supplies have only increased.

“This is our third year of rebuilding and it’s just starting to make progress,” Hallwas said.

Hallwas says the loans should be forgiven, at least in part, for organizations that provide a community service like hers.

“I will find a way to repay my loan,” Hallwas said. “But I could use a little justice and I could use a break.”