Applications for the expanded Canada Emergency Business Account (CEBA), which were set to open across the country Friday, have been delayed. Canadian Finance Minister Bill Morneau announced the update in a tweet Thursday night.
It is not clear why the launch was delayed or when the CEBA will become available.
The delay comes only four days after Prime Minister Justin Trudeau announced the expanded CEBA would become available Friday. Under the expanded CEBA, sole proprietors, farmers, and businesses who use contractors or pay themselves through dividends would be eligible for the program. It is not clear why the launch of the updated program was delayed.
“Work continues around the clock to ensure the program can securely launch across over 230 financial institutions,” Morneau said in his tweet Thursday. “We know how important the program is to small businesses [and] want to launch as quickly as possible.”
The CEBA is one of the federal government’s COVID-19 relief programs aimed to help businesses access loans to cover the costs of keeping their enterprise afloat during the pandemic.
This $55 billion program offers interest-free loans of up to $40,000 to small businesses and non-profits, to help cover their operating costs while their revenues have been temporarily reduced due to the economic impacts of the pandemic.
Under the terms of the program, repaying the balance of the loan on or before December 31, 2022, will result in loan forgiveness of 25 percent, or up to $10,000.
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Dan Kelly, president and CEO of the Canadian Federation Of Independent Business, took to Twitter on Friday to bemoan the delay, calling it “unfair” for the small businesses struggling through the pandemic.
1000s of small firms have struggled thru 3 of the most difficult months ever. First, govt excludes them from the CEBA loan program. 1 month ago they're promised to gain access within days. PM finally announced it would happen today. Now there is a further delay. So unfair!
— Dan Kelly (@CFIB) June 19, 2020
As of Friday morning, the federal government has yet to announce when the expanded CEBA will become available. In his Friday press briefing, Trudeau pushed for businesses to take advantage of the Canada Emergency Wage Subsidy, but did not provide an update on when the expanded CEBA applications might open.
The CEWS covers 75 percent of an employee’s wages during the pandemic, but has seen far less uptake than expected. In comparison, more than 669,000 CEBA loans have been approved by financial institutions as of June 15, representing approximately $26 billion in interest-free credit for eligible businesses.
Kelly noted that the CFIB is calling on the federal government to make “needed fixes” to the CEBA as well as the rent relief program. He also pressed the federal government to announce the criteria for the wage subsidy for July and August, which will reportedly differ from the existing criteria.
“Small firms need time to plan as they consider reopening,” he said in regards to the CEWS criteria. The CFIB CEO recommended the government lower the 30 percent revenue drop test and create a sliding scale to allow more companies to access the subsidy. He also called for more access for employer dividends.
Image source Unsplash. Photo by Christin Hume.