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CEBA Loan Appeal - an Inequity to Small Business and a Case for Disaster Financial Assistance

By Peggy Berndt


Historically, during crises, the Government of Canada extended financial aid through its Disaster Financial Assistance program to individuals and businesses financially impacted.


Amidst COVID, individuals received aid through the Canadian Emergency Response Benefit (CERB) designed to alleviate financial strain without repayment obligations.


Contrastingly, struggling small business operators (mom-and-pop companies who count on the business to feed their families) received a short-term loan under the Canadian Emergency Business Account (CEBA) with conditions, consequences, and a looming repayment deadline.


COVID is an unprecedented crisis, that has worsened for small businesses over time... warranting equitable financial aid through Canada's Disaster Assistance program, as the federal government has always offered to other Canadians severely impacted by a crisis through its Emergency Management mandate.


However, the Canadian Government is standing by as numerous small businesses, the very ones that adapted and provided essential services to Canadians during the darkest days of COVID, now hang on the edge of closure. These resilient entities built Canada's economy, are crucial to our communities, and are on the brink due to the lack of support from the government in the pandemic's aftermath and glaring economic downturn, while 4.6 Billion in COVID aid that was given to ineligible individual/businesses is not being actively collected.


The stark disparity in the Canadian Emergency Business Account (CEBA) program's treatment toward small businesses is exacerbating economic struggles, paving the way for inevitable job losses, and further hindering our economy's recovery. COVID is the biggest crisis to hit Canada on a national level in modern times, but yet, aid through the Disaster Financial System was not offered, despite pleas for help from small businesses in Canada, which are suffering devasting financial consequences of COVID, not seen by any other sector of our economy.


The COVID-19 aid programs, while well-intentioned, have failed to address the unique needs of small businesses. The lack of clarity on what constitutes a crisis, and how to respond to the COVID crisis in Canada, coupled with the limitations of COVID financial aid packages, has left many small business operators without sufficient means to sustain their livelihoods.


“In 2021, 98.1% of all employer businesses in Canada were small businesses, and small businesses employed 63.8% of the Canadian workforce, which represents 10.3 million people. Medium-sized local businesses employed 21.1% and large businesses 15.1%” (Reference: Statistics Canada).


Small businesses, the backbone of our economy, remain far from pre-crisis stability, lacking funds to repay the CEBA loan by January 18, 2024, or qualify for a bank loan of 40K at this time, to avoid a 20K penalty imposed by the federal government.


Simply put... the Government of Canada has failed to provide small businesses the right kind of help, and sufficient recovery time to pay back the loan-shark-style help they offered during the COVID crisis.


Most small businesses used the CEBA loan to sustain staff they couldn’t afford to pay/keep during COVID. The happy result for the government was fewer payments to laid-off employees through CERB. The unhappy result for many small businesses is the loss of money they haven’t had time to recover.


COVID is an unprecedented crisis warranting equitable financial aid for both individuals and businesses. However, small businesses, the backbone of our economy, face an uphill battle, expected to repay a crisis-time loan by January 18, 2024, without sufficient recovery time.


Understanding the phases of a crisis, the recovery phase, often prolonged, demands comprehensive support.


The outcry from small businesses to extend the loan payment and offer equitable assistance is deafening, yet ignored. The Government of Canada must prioritize fairness, and bolster the Canadian economy rather than exacerbating its fragility. Stop justifying unfair practices toward small businesses by comparing them to the state of big business needs (apple and oranges).


Now is not the time for governments to forsake their people. It’s time for the Government of Canada and our provincial leaders to stand by small businesses, treating them with parity and fortifying the nation's economic stability under its Disaster Assistance Program.

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