Press Release: CEBA Repayment Deadline
80% OF ALBERTA HOSPITALITY ASSOCIATION MEMBERS SAY THEY ARE IN DIRE NEED OF SUPPORT WITH CEBA REPAYMENTS
FOR IMMEDIATE RELEASE
Alberta Hospitality Association Address CEBA Repayment Loans: A Crisis for Alberta's Restaurant Industry
Calgary, Jan 9, 2024 – In a recent survey of Alberta Hospitality members, almost 80% of respondents expressed deep concern over the impending repayments of the Canada Emergency Business Account (CEBA) loans, revealing the significant impact these repayments are poised to have on Alberta's restaurant industry. Despite increasing sales numbers, many restaurant owners find themselves in precarious financial positions due to rising costs across the board.
“There have been multiple costs associated with supply chain issues and inflation to hospitality businesses that are posing a dire threat to our longevity. From food costs, to take out containers, to labour, our industry has been negatively impacted with costs at every possible turn, and we need help” - Karen Kho, owner of Lil Empire & Empire Provisions.
Alberta Hospitality Association (AHA) is run by Albertan owners and operators who understand the current challenges within the industry, and aim to provide a collective voice for those in hospitality. As an organization, it strives to provide insights, connections, and resources to support the success of its members and the industry as a whole.
AHA has been advocating and collecting data from the industry that can help owners & operators who are not in the position to repay that loan right now. “Many of our members have expressed they cannot afford the interest, and will not be in a better position for a long time because of servicing that debt.” says Brennen Wowk, AHA Vice-President “This debt repayment, coupled without inflation is the last straw. We are going to see a mass exodus of restaurants in 2024.”
With the forgivable part of CEBA loans only extended until January 18, 2024, the looming deadline for repayment is sending shockwaves through the restaurant sector. After this date, the full amount of the loan will become a 3-year loan with a 5% interest rate, creating a substantial burden for restaurant operators already struggling to make ends meet.
"Operators cannot repay that loan right now, cannot afford the interest, and will not be in a better position for a long time because of servicing that debt," warns Brennen, AHA Board Vice-President. “By contacting your elected officials, we can help make the government understand how dire the situation really is.”
The impact of CEBA repayments is far-reaching and threatens to destabilize the hospitality industry further:
Small and Rural Operators Under Siege: The repayments will have a disproportionate impact on small and rural-based operators, resulting in fewer local, independent restaurants across Alberta.
Restaurant Survival at Risk: Less than 50% of restaurants are breaking even or better, making servicing this loan a daunting task that could lead to more closures and bankruptcies. Restaurant bankruptcies are already up 50% year over year.
Supply Chain Challenges and Inflation: The restaurant industry is grappling with major supply chain issues and inflation, with rising costs at every stage of the supply chain. This compounds the financial stress faced by restaurant owners.
Provincial Responsibility: While CEBA is a federal program, Alberta's restaurant industry finds itself in this situation due to decisions and policies of the Provincial government during the pandemic. The federal government should consider changing the terms, and the province should explore ways to mitigate the damage, such as grants for smaller operators to reduce their loan payments by 50%.
In response to these pressing concerns, AHA is calling for:
Forgiveness or Extension: Forgiveness of the additional portions of the CEBA loan or an extension of the repayment deadline to at least December 31, 2024, to provide much-needed relief for restaurant operators.
Interest-Free Instalment Repayment Plan: The implementation of an interest-free instalment repayment plan that eases the financial burden on restaurant owners while allowing them to gradually repay the loans.
Grants for Smaller Operators: The introduction of grants specifically tailored for smaller operators to reduce their loan repayment obligations by 50%, helping them navigate these challenging times.
The Alberta restaurant industry is at a critical juncture, and the decision to address the CEBA repayment issue will have far-reaching consequences for the future of our vibrant culinary landscape. We urge both federal and provincial governments to act swiftly and decisively to support the survival and growth of our local restaurants, and we need your help in spreading the word. Please contact Mona Pinder at ed@albertahospitalityassociation.ca for more information, and to schedule an interview.
See here for a templated email on how you can help advocate for the hospitality industry
https://www.albertahospitalityassociation.ca/blog/fight-to-extend-ceba-until-the-end-of-2024
AHA in the media:
Ernie Tsu - Calgary City News
Jeff Jamieson & Mona Pinder - Calgary Herald
Ernie Tsu - Calgary City News
Jeff Jamieson - Human Resource Director
About Alberta Hospitality Association:
The Alberta Hospitality Association (AHA) was founded in 2020, with the goal of providing a unified voice for the hospitality industry, from both the perspective of the operator and the employee.
To date, AHA is still run by owners and operators who understand the current challenges within the industry. As an organization, it strives to provide insights, connections, and resources to support the success of its members and the industry as a whole.
www.albertahospitalityassociation.ca