On January 12, 2022, the federal government announced that is extending the deadline for when Canada Emergency Business Account (“CEBA”) loans need to be repaid to qualify for partial loan forgiveness (for background information on the CEBA, please read our previous blog). In particular, the repayment deadline for partial loan forgiveness has been extended from December 31, 2022, to December 31, 2023. Notably, only eligible borrowers in good standing can qualify for partial forgiveness of CEBA loans (a full list of the eligibility criteria can be found here).
Similarly, the federal government announced that it is also extending the repayment deadline for when CEBA-equivalent loans borrowed through the Regional Relief and Recovery Fund need to be repaid for borrowers to qualify for partial forgiveness. This deadline is also being extended to December 31, 2023.
Accordingly, where eligible businesses or organizations are in good standing and repay their CEBA loans before December 31, 2023, they will receive loan forgiveness of up to one third of the value of their loans (up to $20,000). Any outstanding loans will subsequently convert to two-year term loans with an interest of 5% per annum starting on January 1, 2024, with the loans becoming fully due by December 31, 2025.
This is extension is great news for employers operating eligible small businesses or non-profit organizations who have availed themselves of interest-free loans under the CEBA program to help cover their operating costs during the COVID-19 pandemic. This is because the extension means that such employers have more time and greater flexibility to repay their loans and still qualify for partial loan forgiveness.
As always, we will continue to monitor for and post about any new developments related to COVID-19 that are relevant for employers.
This blog is provided as an information service and summary of workplace legal issues.
This information is not intended as legal advice.