Restaurant and hospitality sector business owners in the Okanagan could be struggling even more than their counterparts in other parts of B.C. and Canada to pay back their CEBA loans.
Thursday was the deadline for an estimated 900,000 small businesses that took advantage of interest-free Canada Emergency Business Account (CEBA) loans of up to $60,000 during the pandemic to pay the money back, interest free.
The BC Restaurant and Foodservices Associationand the Kelowna Chamber of Commerce joined other business groups in calling for an extension that was denied by the federal government.
BCRFA president and CEO Ian Tostenson believes there could be between 2,000 to 3,000 restaurants in the province unable to pay back their loans at this time. They get three years to come up with the money, but with an additional 5% interest that he says could push the bill up to $70,000 by the end of that term. For those in the Central Okanagan, even that time frame could be a challenge.
“If you look in the Okanagan, of particular concern to our industry and members there was the effect that they had during the fires,” said Tostenson.
“A lot of businesses in August, and restaurants in particular, where they make a lot of their savings and their money and their income out of a brisk August and September, July - we had restaurants that had no sales. They phoned us and said we haven’t had one customer in today.”
He says they tried to get the government to take that into consideration in their pleas to extend the CEBA deadline, but it didn’t work.
The BCRFA is now looking at other ways to help for its members.
Tostenson says they’ve set up a Zoom call next week with what he hopes is "every politician in British Columbia" to talk about issues like red tape, bureaucracy and recent policies, like the single-use plastic legislation.
At the Kelowna Chamber of Commerce, they’re hearing of some small businesses that are taking extreme measures, like putting up their homes as collateral, to refinance their CEBA loans.
“We’re staying in close contact with the Canadian Chamber and our colleagues across the country. I think there are centres where the economy has been tougher than B.C., where the percentage of defaults will be higher,” said Kelowna Chamber executive director Dan Rogers.
Exactly how many businesses might default has not been released by the federal government.
“What we hear from the Canadian Chamber is it’s a small percentage but despite that, the impact on that small number of businesses is going to be significant.
“If it means they have to go to the extremes to secure their loan, like putting their house on the line, or frankly they just get so fatigued that they close their doors. And that’s a sad state, particularly as an organization that tries to support small business,” adds Rogers.
