BARRHEAD - County of Barrhead deputy reeve Marvin Schatz is concerned about what will happen to area businesses when they have to start repaying the Regional Relief Renewal Fund (RRRF) loans come the new year.
And he asked Peace River-Westlock MP Arnold Viersen what, if anything, the federal government was doing to help businesses who were still struggling and may have difficulty in paying back the loan.
The Conservative Party of Canada (CPC) MP was at the July 4 County of Barrhead council meeting to update councillors on his activities in Ottawa and answer questions.
To help small - and medium-sized businesses negatively impacted by the pandemic, the federal government created the $2-billion RRRF. Most businesses accessed this fund through their bank and applied for $40,000 or $60,000 interest-free, partially forgivable loans.
The deadline for businesses to repay the loan without having interest charged is Dec. 31, 2023.
However, in rural communities, businesses often accessed the loans through their local Community Futures which is a not-for-profit community-driven organization that provides a wide range of small business services and business management tools for people wanting to start or expand an existing business and those looking to sell or buy a business. It was founded in 1986 and is funded by the federal government in via Western Economic Diversification Canada. The Yellowhead East branch is based in Whitecourt and is one of 27 in Alberta.
"There are still a lot of small businesses that took out these loans that are still in trouble and are still trying to recover," Schatz said. "Is there any indication that the government might look at extending the deadline for repayment?"
Viersen said, regrettably, he had no idea what the government's plans were and agreed with Schatz that many businesses who applied for COVID-19 relief loans are still feeling the impact of the pandemic.
"The Canadian Federation of Independent Business (CFIB) has said that 85 per cent of the members that have taken COVID relief loans have no idea how they will pay it back," he said, adding those numbers are similar to what Community Future offices in the riding are finding.
In May, CF Yellowhead East executive director Michelle Jones told Town of Barrhead council via teleconference that when they polled their 53 clients who received more than $2.5 million in RRRF loans about six months prior, only eight per cent had paid them off and only 18 per cent had a plan on how they would.
The repayment deadline for the interest-free, partially forgivable loans is Dec. 31, 2023, which is an extension from the original date of Dec. 31, 2022.
After that, the forgivable portion is forfeited, interest begins to accrue at a five per cent rate, and the loan goes to collections if not repaid in full by Dec. 31, 2025.
"I have been advocating and trying to find out more information on what the government plans to do, but I haven't had much luck," Viersen said.
He added another issue his office is dealing with is residents who received the Canada Emergency Response Benefit (CERB) during the pandemic who were not eligible and are now being asked to pay it back.
"Something we've been pointing out for a while now, is that there were people who were in jail or out of the country, and they took it. There is also the rare case where someone did not take the CERB, but people fraudulently applied for it on their behalf and are left with trying to deal with the result," Viersen said.
Barry Kerton, TownandCountryToday.com
