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Jen Christie, owner of Bonfire on Queen, one of three restaurants in the town of Paisley, Ont.Fred Lum/The Globe and Mail

Small businesses in hard-hit sectors are anxious to hear from the government about when they will have to pay back their emergency loans, as the once-far-away repayment deadline begins to approach.

The federal government announced the Canada Emergency Business Account (CEBA) program in April, 2020, to provide emergency loans of $40,000 to eligible small businesses. The loans are interest-free and $10,000 of the value is forgivable as long as the loan is repaid by Dec. 31, 2022. (The maximum loan amount was later increased to $60,000 and the forgivable portion to $20,000).

Finance Minister Chrystia Freeland said in the House of Commons Tuesday that the Liberal government would introduce legislation to extend the CEBA repayment deadline. But she did not give any further details, nor did the fall economic statement tabled Tuesday mention an extension. Ms. Freeland’s office could not provide more information when contacted by The Globe and Mail.

At the time the CEBA loans were announced, the repayment deadline seemed a long time away. But nearly two years later, with the COVID-19 pandemic still in full force and a new variant causing concern, some business owners in hard-hit sectors say the deadline is approaching fast and they have not recovered enough to pay back the money.

“It’s in the top three calls we’re getting from members right now,” said Dan Kelly, president of the Canadian Federation of Independent Business. “Businesses are wondering how on earth they’re going to possibly repay.”

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The economic recovery has been very uneven across sectors. While some businesses, such as those in the technology and financial industries, could pivot to remote work and e-commerce, others that relied on high-contact in-person services have faced a mix of less demand and heavy COVID-19 restrictions.

The nature of the CEBA loan program also means that those businesses that have done the best in the pandemic are in the strongest positions to repay the loans and take advantage of the forgivable portions, while businesses in hard-hit sectors may miss out on the benefits of a loan.

Business groups are asking the government for more information about a repayment extension, as well as an increase the amount that is forgivable, at least for businesses that are still experiencing diminished revenue.

Mr. Kelly said the CFIB has asked for a two-year extension, to Dec. 31, 2024.

The federal government has already recognized the different recovery trajectories: Ottawa ended the wage and rent subsidies for most businesses in October, but kept the aid going for businesses in hard-hit sectors such as hospitality and tourism.

Jen Christie, owner of Bonfire on Queen, one of three restaurants in the town of Paisley, Ont., said worrying about the debt has kept her up at night. She and her husband opened the restaurant in early 2020 using their personal savings, financial help from family and the proceeds of selling her house in Kitchener, Ont.

She said she was not sure at first they would need the CEBA loan, but they applied for it just in case. She said the money later came in handy as the pandemic dragged on.

“At first it was, like, ‘We should get this so that we’ve got it as insurance in case things get worse in 2021,′” Ms. Christie said. “And they did.”

She said she’s not sure how they’re going to pay back the loan, on top of other rising costs for the business, such as the price of pizza boxes rising to $34 for a pack of 50, from $19.95 a year earlier.

Ms. Christie said she was relieved to hear there might be an extension to the CEBA loans, because with the possibility of more lockdowns coming as the Omicron variant spreads, “it looks like there’s still some hurt to come.”

The tourism industry is also operating on much lower revenue because of continuing travel restrictions.

Richard Vanderlubbe, president of and a spokesperson for the Association of Canadian Travel Agencies, said the severe drop in international travel has decreased demand for travel agents and agency revenues because so much domestic travel is more about seeing friends and family than booking tours.

He said the industry has been through multiple rounds of reopenings and cancellations as conditions shift and new variants spread, and it’s not clear whether things will be better in 2022.

“Are we going to be back to 2019 levels?” Mr. Vanderlubbe said. “I don’t think so.”

In total, nearly 900,000 businesses took out CEBA loans for a total value of $49-billion. Businesses that do not pay back their CEBA loan balance by Dec. 31, 2022, forfeit the forgivable portion ($10,000 or $20,000) and have to begin paying a 5-per-cent annual interest rate to the financial institution through which they got the funds. Businesses have until Dec. 31, 2025, to pay the loan back in full.

Export Development Canada, the Crown corporation that administers the CEBA program on behalf of the federal government, declined to say how many businesses have already repaid the loan, but suggested very few would until closer to the deadline.

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