Extending the pandemic-era loan repayment deadline for businesses and forgiving part of it in Canada would cost Ottawa about $907 million, according to estimates by the parliamentary budget officer.

The Canada Emergency Business Loan (CEBA) was introduced during the pandemic to help small businesses forced to close or restrict operations due to public health measures. These loans, backed by the federal government, were offered without interest.

According to this program, any business could borrow up to $60,000, and if it paid back $40,000 by a certain date, $20,000 would be forgiven.

Now that the government has decided to extend the deadline for these refunds from December 31 to January 18, 2024, many businesses are looking to extend this deadline until the end of next year. After this date, CEBA loans will be converted into three-year loans with five percent interest.

Few small businesses have returned to pre-pandemic operations and are still under cost pressures, experts say, due to new costs from inflation and high interest rates. Therefore, extending the repayment deadline could allow these businesses to repay their loans before January 18.

The decision to extend the deadline could not only give businesses more patience, but also possibly allow the government to collect more money. The Program and Budget Agency had estimated that extending the deadline to January 18 would cost about $52 million.

news source