Restaurants Canada (RC) is demanding the federal government adapt its Canada Emergency Business Account (CEBA) repayment plan. .“Thousands of small independent operators in our industry are at breaking point as a result of their CEBA debts,” said RC Vice President, Federal and Quebec Affairs Olivier Bourbeau in a Monday press release. .“That’s why we are calling on the Deputy Prime Minister, Chrystia Freeland, to take meaningful action by adopting our CEBA repayment proposal to help ensure their survival.” .With half of all food service companies operating at a loss or breaking even and 80% making less profit today compared to pre-pandemic, Bourbeau said many of them are weighing their options to remain open and incur more debt or close their businesses and file for bankruptcy. He called a decision on CEBA before the summer season “integral to providing small businesses with predictability.”.The release said time is of the essence to address loan repayment requirements facing restaurants and other small businesses given the House of Commons will be rising for the summer on June 23 and the repayment deadline is December 31. It said bankruptcy filings have increased 116% since 2022, and it is expecting more restaurants to close their doors because of the Canadian government’s failure to take action. .RC’s CEBA recommendations ask Parliament to provide struggling small businesses with a three-year payback extension on loans, with a scale-down model on the forgivable portion. This plan will ensure funds are paid back to the government while saving thousands from being forced to declare bankruptcy in the near future. .For the majority of Canada’s food service sector, the COVID-19 pandemic created large financial challenges from which it is struggling to recover. In response, the Canadian government launched CEBA to give small businesses interest-free loans of up to $60,000. .A survey conducted by RC found about 20% of the restaurants which have not reimbursed it will be unable to repay it in part or at all because of the state of the food service industry. .The release went on to say it looks forward to learning about the government’s future plans to address CEBA loan repayment challenges by May 31 at the latest to ensure food service remains an active part of the economy. .For many restaurants, Bourbeau said the December 31 repayment deadline is “simply impossible to meet — which reflects the state of our industry as a whole.” .“Post-pandemic operational challenges like inflation, labour shortages, and supply chain hurdles are further diminishing the profitability of these businesses and lengthening the sector’s recovery process entirely,” he said. .The Canadian Federation of Independent Business (CFIB) warned in September the Bank of Canada’s rate increase will be a hard hit to small businesses which are being squeezed by inflation. .READ MORE: 7 in 10 small businesses say interest rate hikes will harm them.A report from the CFIB found 70% of small business owners expect interest rate hikes to have a negative impact on their operations.."While keeping inflation at reasonable levels is definitely an important policy goal, the rate increase comes at a time when 62% of small businesses are still saddled with pandemic debt, for an average of $158,000," said CFIB Chief Economist and Vice President of Research Simon Gaudreault.
Restaurants Canada (RC) is demanding the federal government adapt its Canada Emergency Business Account (CEBA) repayment plan. .“Thousands of small independent operators in our industry are at breaking point as a result of their CEBA debts,” said RC Vice President, Federal and Quebec Affairs Olivier Bourbeau in a Monday press release. .“That’s why we are calling on the Deputy Prime Minister, Chrystia Freeland, to take meaningful action by adopting our CEBA repayment proposal to help ensure their survival.” .With half of all food service companies operating at a loss or breaking even and 80% making less profit today compared to pre-pandemic, Bourbeau said many of them are weighing their options to remain open and incur more debt or close their businesses and file for bankruptcy. He called a decision on CEBA before the summer season “integral to providing small businesses with predictability.”.The release said time is of the essence to address loan repayment requirements facing restaurants and other small businesses given the House of Commons will be rising for the summer on June 23 and the repayment deadline is December 31. It said bankruptcy filings have increased 116% since 2022, and it is expecting more restaurants to close their doors because of the Canadian government’s failure to take action. .RC’s CEBA recommendations ask Parliament to provide struggling small businesses with a three-year payback extension on loans, with a scale-down model on the forgivable portion. This plan will ensure funds are paid back to the government while saving thousands from being forced to declare bankruptcy in the near future. .For the majority of Canada’s food service sector, the COVID-19 pandemic created large financial challenges from which it is struggling to recover. In response, the Canadian government launched CEBA to give small businesses interest-free loans of up to $60,000. .A survey conducted by RC found about 20% of the restaurants which have not reimbursed it will be unable to repay it in part or at all because of the state of the food service industry. .The release went on to say it looks forward to learning about the government’s future plans to address CEBA loan repayment challenges by May 31 at the latest to ensure food service remains an active part of the economy. .For many restaurants, Bourbeau said the December 31 repayment deadline is “simply impossible to meet — which reflects the state of our industry as a whole.” .“Post-pandemic operational challenges like inflation, labour shortages, and supply chain hurdles are further diminishing the profitability of these businesses and lengthening the sector’s recovery process entirely,” he said. .The Canadian Federation of Independent Business (CFIB) warned in September the Bank of Canada’s rate increase will be a hard hit to small businesses which are being squeezed by inflation. .READ MORE: 7 in 10 small businesses say interest rate hikes will harm them.A report from the CFIB found 70% of small business owners expect interest rate hikes to have a negative impact on their operations.."While keeping inflation at reasonable levels is definitely an important policy goal, the rate increase comes at a time when 62% of small businesses are still saddled with pandemic debt, for an average of $158,000," said CFIB Chief Economist and Vice President of Research Simon Gaudreault.
