Debts and stress rising as restaurants face pandemic loan repayment deadline

On top of inflation and a slow January, some Montreal restaurants are facing the deadline to pay back government loans from the COVID-19 pandemic relief fund.

Some owners are having to make tough decisions to beat the deadline for Canada Emergency Business Account (CEBA) loan repayments.

Brasserie Le St-Bock owner Martin Guimond said the only solution to keep the popular spot on St. Denis Street open is to lay off workers.

"We're living a nightmare right now," he said. "Yesterday, I had to fire something like 30 per cent of my employees. I fired five waiters."

Guimond said he's using personal credit cards to pay for supplies for the first time in 18 years, and he's not alone.

"I didn't pay my rent for January, and I talked with my account manager, who says I won't be able to pay it before April," he said.

The deadline to pay back CEBA loans is Thursday, Jan. 18.

If a business borrowed a $ 60,000 loan and pays back $40,000 by Jan. 18, the remaining $20,000 is forgiven.

For those who took out $40,000, if they pay back $30,000 by the deadline, the rest is forgiven.

The Quebec Restaurant Association says 2023 was a bad year, with sales down and bankruptcies up.

The numbers of bankruptcies are reported to have increased by 81 per cent between 2022 and 2023.

"We are in the perfect bad economic storm," said Guimond. "Many, many restaurants will close."

The Canadian Federation of Independent Business said nearly a quarter of those who borrowed won't be able to repay their loan by next week's deadline.