‘Hold your horses:’ Firms want more time on pandemic loans

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Downtown organizations in New Brunswick have joined their counterparts across the country to demand that Ottawa give small businesses more time to pay back pandemic loans.

They argue too many empty storefronts already blight the heart of the nation’s cities, and that forcing businesses to give back the money by a January deadline could sink even more of them.

The federal government already extended the deadline by a year, and more recently, it tacked on an extra 18 days.

Not good enough, says Patrick Richard, the executive director of Downtown Moncton Centre-ville Inc.

“Businesses had no other choice but to sign up for these loans. It was a question of survival during the pandemic,” Richard said in an interview. “We’re not looking for a forever extension. We want another year, extending the loans till December 2024, and then businesses would have two full years under their belts, out of COVID, and have more of a game plan.”

Richard was the only New Brunswick representative from dozens of downtown organizations that journeyed to Ottawa to lobby federal cabinet ministers and MPs on Nov. 6.

In a release that day, the International Downtown Association Canada (or IDA Canada) said its members had expressed significant concern about the vacancy rates in the country’s leading cities, with notable downtown street-front vacancies.

Out east, the vacancy rates are not nearly as bad, with Halifax’s vacancies hovering around 13 per cent, while Moncton and Fredericton posted much lower rates. In Toronto, it’s 14 per cent, and in Winnipeg, it is 30 per cent.

The worst is in Edmonton, one in three storefronts downtown sit empty.

“While government efforts have certainly aided struggling businesses, the brief 18-day extension for federal payments falls short,” said Kate Fenske, chair of IDA Canada, which represents 500 business improvement associations that include more than 250,000 business and property owners. “Many businesses are teetering on the edge. The very core of our downtowns and main streets – our central business districts – are feeling the strain.”

The Trudeau Liberal government launched the Canada Emergency Business Account, better known as CEBA, in April 2020.

It offered zero-interest loans of up to $60,000 to Canadian small businesses struggling during the COVID-19 pandemic. Up to $20,000 would be forgiven if $40,000 was paid by a certain date.

So far, more than $49 billion has been doled out to help nearly 900,000 organizations.

But with the Jan. 18, 2024, repayment deadline looming, many businesses across Canada are pleading for more time.

We’re just saying, ‘please, hold your horses, you’re going to get your money back, just give us one more year under our belts.’

Bruce McCormack

Last year, Ottawa provided a one-year extension, and in September, it moved the due date from Dec. 31 to Jan. 18, another goodwill gesture.

But fearing many of these businesses could go belly up, the nation’s premiers asked Prime Minister Justin Trudeau in October to extend the deadline another full year.

So far, his government has shown little willingness to budge again.

“The bottom line is that, if you are a small business and do not currently have the funds to repay your CEBA loan, you now have three years to repay it in full,” said Katherine Cuplinskas, press secretary to Finance Minister Chrystia Freeland, in an email to Brunswick News.

She pointed out that the deadline moves to March 28 if businesses make a refinancing application before Jan. 18 with the financial institutions that provided their initial CEBA loans.

“The CEBA program, which delivered over $49 billion to nearly 900,000 small businesses and nonprofits across the country, including in New Brunswick, was an essential part of the federal government’s swift response to the COVID-19 pandemic. The additional flexibility that we announced is significant support for small businesses who might still be struggling to make ends meet.”

But Bruce McCormack, executive director of Downtown Fredericton Inc., said it’s taken longer than expected for many businesses, especially restaurants, to get back to pre-pandemic profit levels.

“They’re still struggling. And then when you add higher labour costs, inflationary pressures, supply costs, the cost of borrowing a dollar has gone up, all of these different things, it’s significant. So we’re just saying, ‘please, hold your horses, you’re going to get your money back, just give us one more year under our belts’.”

Both McCormack and Richard said empty storefronts have not blighted their downtowns as badly as in cities farther west.

In downtown Fredericton, McCormack said he could count on one hand the number of boarded up buildings. Most of them, he said, are tied up in insurance claims or other problems, and will likely soon be filled with new businesses.

“The social issues in downtowns across the country have exploded, and it’s really bad out west in places like Winnipeg and Edmonton. People living rough and on the street have blown out of proportion in those areas, which hits businesses. We’re seeing it here, but we’ve been able to work with our city to help the situation, such as bringing in community safety officers and having them walk the beat, rather than just leaving it up to police. That’s been a tremendous success.”