As more local businesses close or get listed for sale, industry experts think it's a situation that is only going to get worse in the coming months.
Greg Durocher, CEO of the Cambridge Chamber of Commerce, said the federal government's persistence in demanding payback of loans taken out during the pandemic will have detrimental impacts on the community.
"Everyday these business owners and look in the mirror and think how they are going to survive in a post-pandemic world," said Durocher. "The government is telling them you better be thinking about how you're going to pay back your loans."
The Cambridge Chamber of Commerce along with the Canadian chamber has been petitioning the federal government to extend the Canadian Emergency Business Account (CEBA) loans for over a year, with little to no success.
Now, with the repayment deadline of Jan. 18 fast approaching, thousands of small businesses across the country and in Cambridge will be pushed to the edge and could consider closing.
"There are around 30 per cent of all small businesses who just won't be able to make these payments," Durocher said. "Some have not even gotten back to pre-pandemic revenue and then you add inflation and their rising costs of operation. It's not going to be good."
Durocher said he heard from a business owner who was bringing in $1.6 million in sales in 2019, but in 2023 they brought in $1.3 million and is losing profit at a record pace. Not only has this business's cost for materials gone up, so have costs of utilities, rent and all other expenses, making the company barely profitable.
This is a common story Durocher hears and he worries about the workers and families of these companies.
"This is the issue with the government. They don't listen when we warn them and they make irresponsible decisions," he said. "They are reactive and not proactive."
Back in September, the Canadian government extended the repayment date from Dec. 31 to Jan. 18 and a refinancing extension until March 28.
"In response to the ongoing challenges faced by small businesses and not-for-profits, our government announced a critical extension to the CEBA repayment, after a previous one-year extension," said Cambridge MP Bryan May.
"Small businesses and not-for-profits are given automatic access to a three-year, low-interest loan of up to $60,000 if the loan has not been repaid or refinanced, and flexibility to repay the principal at any time throughout the three-year term, providing businesses with financial flexibility."
Starting Jan. 19, unpaid CEBA loans will convert to a three-year loan with interest rates of five per cent per year with a repayment date extension from Dec. 31, 2025, to Dec 31, 2026.
The issue is Durocher thinks some businesses will not be able to get new loans from the bank and will be forced to pay high interest on loans from other sources. He thinks the government could give them more time to repay and keep them eligible for loan forgiveness of up to $20,000.
"The government is doing good, back to 2019 revenues, so they don't need this money right now," added Durocher. "Just the gas tax alone will put them above where they were back then. They aren't thinking of the little guy."
May adds that these programs were created, because the challenges businesses have been facing.
"It's clear that these are unprecedented times, and we genuinely empathize with the difficulties many are dealing with," he said.
Durocher predicts over the next year more businesses will be closing down due to the repayment of these loans coupled with rising costs.
He points to the hospitality industry as getting it the worst, with countless restaurants popping up for sale or closing down over the last few months.
"If you are noticing your grocery bill going up and you are paying more for food, so are the restaurants. They don't get a special deal because they are selling food," he said.
"If you can pay back your loan, then pay it back, but the issue is there are people who can't and all we're asking for is more time, but that's not going to happen, because it's too late."