Friday’s meeting of federal, provincial and territorial finance ministers is an opportunity for Deputy Prime Minister Chrystia Freeland to announce the extension of the Canada Emergency Business Account (CEBA) forgivable deadline by a full year, says the Canadian Federation of Independent Business (CFIB).
In recent weeks, this move was supported by all 13 provincial and territorial ministers, said the organization in a news release on Thursday.
The CFIB is also calling on ministers to support a freeze of four major tax hikes coming in early 2024.
Next Monday will mark one month until the CEBA repayment deadline on January 18. If small businesses can’t repay the loan by then or haven’t applied with their bank for a refinancing extension, they will lose the up to $20,000 forgivable portion and begin paying interest on the principal amount, said the CFIB.
Dan Kelly
“Last week, Ottawa finally provided some crucial details to help businesses considering different repayment options,” said Dan Kelly, President at CFIB. “While this information is helpful, it gives businesses very little time to find the best option for them. We’re urging government to give businesses more time to secure the forgivable portion of the loan.
“Canadians and small businesses are already struggling with high costs. The upcoming tax increases will further drive up the cost of doing business and cut workers’ take-home income. We’re calling on the federal government to make both living and doing business in Canada more affordable by pausing the upcoming tax hikes.”
New CFIB data found that only one-third (34%) of business owners have repaid their CEBA loans while another 23% don’t think they can repay it in time to keep the forgivable portion.
CFIB continues to push the government to further extend the forgivable deadline from January 18 to December 31, 2024.
Jasmin Guénette
“Small businesses feel like Ottawa is abandoning them at a critical time in their recovery,” said Jasmin Guenette, Vice-President of National Affairs. “We’re already seeing more business bankruptcies compared to last year. Close to 50% of small businesses are making below normal sales, they face more than $100,000 in pandemic debt, while consumers are spending less than they were previously due to the pressures of inflation. It seems that only the government doesn’t understand the negative consequences that not extending the repayment deadline could have on our economy and our small businesses.”
The national organization said Employment Insurance (EI) and Canada Pension Plan (CPP) premiums will rise on January 1, while the carbon and alcohol excise taxes will increase on April 1.
Both CPP and EI changes will increase payroll taxes for workers by up to $348 in 2024, and by up to $366 per employee for employers. Total employer contributions for CPP and EI changes could amount up to $5,524 per employee in 2024. That doesn’t even include other payroll taxes that an employer may pay depending on where their business is located, it said.
“Then on April 1, the carbon tax will increase from $65 per tonne to $80 per tonne, while the alcohol excise tax will be automatically adjusted to inflation (approximately 3.5%) in 2024 unless Ottawa legislates a freeze or cap,” explained the CFIB.
“The increase in the federal carbon tax is planned despite the fact that Ottawa has not even created the program intended to return $2.5 billion in carbon tax revenue to small business owners. The federal government is sitting on billions that have been collected since 2019 despite repeated promises to get these dollars back to small firms.”
Business owners can visit CFIB’s website for more information on their CEBA financing options.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list
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