Yesterday, The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, announced the following changes to the federal government’s Canada Emergency Business Account (CEBA) program:
- The repayment deadline for CEBA loans to qualify for partial loan forgiveness is being extended from Dec. 31, 2022, to Dec. 31, 2023, for all eligible borrowers in good standing.
- Repayment on or before the new deadline of Dec. 31, 2023, will result in loan forgiveness of up to a third of the value of the loans (meaning up to $20,000).
- Outstanding loans would subsequently convert to two-year term loans with interest of 5% per annum commencing on Jan. 1, 2024, with the loans fully due by Dec. 31, 2025.
- The government is also announcing that the repayment deadline to qualify for partial forgiveness for CEBA-equivalent lending through the Regional Relief and Recovery Fund is extended to Dec. 31, 2023.
- The CEBA program was open for applications from April 9, 2020, to June 30, 2021. It has provided more than $49 billion in liquidity to over 898,000 Canadian businesses.
- CEBA provides interest-free loans of up to $60,000 to small businesses to help cover their operating costs during a time where their revenues have been reduced. These loans are partially forgivable. With the extension announced today, repaying the balance of the loan on or before December 31, 2023, will result in loan forgiveness of up to 33 per cent (up to $20,000).
- The $2 billion Regional Relief and Recovery Fund, operated through Regional Development Agencies, has been a key support for businesses unable to access other federal pandemic support programs.