We need more time! Provinces speak out for small businesses

BY PAUL JUNOR

The impact of rising fuel costs, food prices, mortgage and rental prices have had a steep effect on small businesses across Canada. There is no doubt that small businesses are the economic engine of the Canadian economy. According to data presented by the Innovation, Science and Economic Development Canada, small and medium-sized enterprises (which is defined as a business establishment with 1 to 499 paid employees) make up the bulk of the workplace.

Many of these businesses were impacted by the COVID-19 pandemic and were able to access loans of up to $ 60,000 under the Canada Emergency Business Account (CEBA) program. It was offered by over 220 financial institutions to businesses across Canada.

Now that they are due, thirteen premiers of provinces in Canada have sent Prime Minister Justin Trudeau a letter asking for an extension on loans that were due on, or before January 18^th, 2024.

There were 1.19 million (97.9%) small businesses, 22,700(1.9%) were medium-sized businesses, and 2,868 were large businesses. A small business is defined as one that employs between one to 99 employees. Of the following four industries: scientific and technical services, construction, retail trade, health care and social assistance account for 570,606 businesses, and over half of Canadian businesses are in the five industries.

According to 2021 data, 67.7% (8.2 million) people work for small businesses out of the 12.1 million people in Canada who work in the private sector. SME’s are reported to have contributed 47.7% of the $575.1 billion worth of goods that Canada exported in 2021.

The letter signed by the premiers of eight provinces and two territories including: British Columbia, Alberta, Ontario, Quebec, Newfoundland & Labrador, New Brunswick, Nova Scotia, Prince Edward Island, Yukon and Northwest Territories was sent by Shannon Whittaker from the Office of the Premier of Ontario to the media on October 20^th, 2023. The letter highlights the financial challenges and hardships that many Canadians are currently experiencing. It notes, “Just as people are being hit hard by rising costs, so too are small businesses.  Small businesses are vital to the social and economic fabric of communities, providing everything from first jobs to family supporting careers.”

The letter mentioned the financial and economic impact that COVID-19 pandemic had on small businesses as it turned their lives and livelihood upside down as many were forced to shut down, or entirely change their business model to keep people safe.

As these businesses slowly recover from the financial devastation from the fallout of the worst crisis since the depression, they are now facing additional economic challenges. The letter states, “Now, just as many small businesses are starting to find their feet after the pandemic, they are facing cost pressures from rising inflation and interest rates. Compounding these challenges, many small businesses are anxious about their abilities to pay back their federal CEBA loan when the forgiveness repayment period ends in the new year. The same loan that was once a lifeline during the pandemic is now threatening to sink the small businesses that are only just getting by.”

The letter makes a strong case for the need for additional time and extension of repayment of CEBA loans for an extra year. It concludes, “We look forward to continuing our work with the federal government to make sure Canada is a place where businesses thrive.”

The Government of Canada’s website: ceba-cuec.ca mentioned that forgiveness repayment date has been extended to January 18^th, 2024, for CEBA loan holders who are in “good standing” and are eligible, but for others they are expected to pay in full by December 31^st, 2023.