A quarter of small businesses with outstanding Canada Emergency Business Account (CEBA) loans missed last week’s repayment deadline, according to the federal government. 

Small Business Minister Rechie Valdez and Finance Minister Chrystia Freeland shared repayment estimates for the program during an announcement in Montreal on Monday.

Businesses had until Jan. 18 to repay the pandemic loans while receiving partial forgiveness. 

Valdez said government estimates indicate “about 75 per cent have been able to pay back” their outstanding CEBA loans. She did not say what percentage of businesses repaid CEBA loans with their own money and how many did so through refinancing agreements.

“Thank you to all the small businesses who did the right thing to keep Canadians safe and then continued to remain resilient and persevere through some very challenging times,” Valdez said during the announcement. 

The loan program was introduced in 2020 to help businesses affected by restrictions introduced by governments to reduce the spread of COVID-19.

The deadline had been pushed back multiple times to the final date of Jan. 18.

Businesses that missed the deadline saw debts converted to three-year loans with interest of five per cent each ear. However, businesses that set up refinancing agreements with financial institutions will have until the end of March to repay their outstanding debt and have up to a third of the loan forgiven. 




Businesses borrowed money to repay: CFIB

Dan Kelly, president and CEO of the Canadian Federation of Independent Business (CFIB), said the government’s repayment figures do not reflect the fact that “a huge number of those that repaid their CEBA loans did so by borrowing the money.” 

In a post on X, formerly Twitter, Kelly cited previous estimates from the CFIB that indicated one-third of CEBA loan holders would have to borrow money by taking a bank loan, borrowing against their home or using a line of credit in order to meet the deadline. 

“While government got its money back, the debt burden to many small businesses didn’t suddenly go away – it just moved from the left pocket to the right one,” Kelly said in Tuesday the social media post. 

Kelly said CFIB was “pleased” for businesses that were able to meet the deadline. He noted a recent CFIB survey showed that 22 per cent thought they would be unable to meet the deadline.

“I don’t think government should interpret this as a sign that all is well for Canadian small businesses,” Kelly said. 

“The 25 per cent that missed the deadline represents 225,000 small firms – a staggering number unable to come up with $40,000 almost four years after the pandemic started.”

 Last week, economists at Desjardins published a report predicting repayments related to the program would weigh on real GDP and employment in Canada, though they expected the overall economic impact would be minimal.

Their report said over half of businesses in Canada received loans under the program. Nearly 900,000 loans were approved and about 575,000 received extensions, with about $49.9 billion in funding sent out in total