While the Canada Emergency Business Account (CEBA) loan deadline was recently extended, the forgivable portion of the loan is still causing sleepless nights.
The economic landscape has seen a transformation in recent years, with Nelson and area businesses facing mounting pressures due to various cost factors.
Rising costs fuelled by higher interest rates, continued inflation and a slowing economy are putting upward pressure on the cost of inputs, borrowing, and virtually every expense associated with owning and operating a business.
Coupled with increased direct costs imposed by all levels of government, it is more challenging to do business, disincentivizing business growth, entrepreneurship, and economic mobility.
As a consumer, as you shop for groceries or back-to-school shopping for your family, you see it yourself. Inflation has slowed somewhat over the past several months, but it is not just consumers who are struggling. So are entrepreneurs, who find themselves forced to pass on their higher costs.
Last week the federal government extended the deadline for the repayment of CEBA loans. For clarity during the COVID-19 pandemic, CEBA offered interest-free loans of up to $60,000 to small businesses and not-for-profits, to help them tackle the economic impacts of the pandemic. In total, $49.2 billion worth of loans to around 900,000 businesses were made under the program.
That was helpful, but more could have been done to address the needs of businesses that are at risk of losing the forgivable portion of their CEBA loan. That deadline was moved only 18 days to Jan. 18, 2024, and would have allowed businesses to receive a loan forgiveness grant of up to $20,000. If companies fail to meet the deadline, however, they will be charged interest of five per cent per year and the full principal would be due Dec. 31, 2025.
Several business groups, including the Nelson and District Chamber of Commerce, urged Ottawa to extend the repayment deadline along with access to the forgiveness grant by at least a year because thousands of small businesses warned they have yet to recover financially and are staring at bankruptcy.
Many businesses are still struggling, and with the added inflationary pressures, some are on the verge of throwing in the towel. Customers that were out before the pandemic and before current inflationary pressures just aren’t returning in the same numbers.
With the costs of mortgages, housing, groceries, and day-to-day necessities there is often very little left over for new clothes, a bike, going out for dinner or other discretionary spending or entertainment options.
Small businesses employ 1.1 million British Columbians and make up 33 per cent of the provincial GDP. Market fluctuations and rising costs disproportionately impact small and medium-sized businesses due to their reduced capacity to absorb new costs.
Small business owners often work long hours and make great sacrifices to ensure the success of their companies during the best of times. Labour shortages, inflationary pressures, the rising costs of doing business, it’s no wonder business owners have had many sleepless nights.in these turbulent years.
Look around, small businesses make up most of Nelson’s business community and they all play a critical role in driving our local economy and creating jobs. It’s your favourite restaurant, the outdoor store, the trusted accountant or where you go for a beverage with friends. The cornerstones of our community.
In recent years, the province has implemented several measures that have also increased costs and made it harder for B.C. businesses to succeed. These include new and increased taxes, mandatory five paid sick days, increases to the minimum wage five years in a row, and the recent introduction of a new statutory holiday.
Faced with the ongoing challenges caused by high interest rates, inflation, and supply chain challenges, B.C. businesses need help. Last week, our chamber and chambers through the Kootenay region met with Brenda Bailey, Minister of Jobs, Economic Development, and Innovation.
All those issues as well as commercial recycling challenges, housing, mental health and addictions and the impact of decriminalization of many substances were discussed. There is still plenty of work to do when it comes to the rising costs of doing business. The work of your chamber never slows as business and community advocacy remains our primary focus.
Tom Thomson is executive director of the Nelson and District Chamber of Commerce.