Quebec restaurants concerned about looming deadline to repay CEBA loan

Many restaurants in Quebec say they're struggling to pay back loans they got from the federal government during the pandemic.

With the repayment deadline approaching, many restaurants could be facing bankruptcy.

For decades, Trattoria La Villetta in Montreal's Saint-Laurent borough has been serving up coffee and Italian dishes.

"Me and my mom are still going strong. It'll be 33 years this year," said manager John Insogna.

But he and his mother are worried their family restaurant's days could be numbered. Like many businesses, they took out a Canada Emergency Business Account (CEBA) loan during the pandemic. Now, they say they can't pay it back.

"We borrowed this money because, technically, we didn't have a choice," he said.

According to the Quebec Restaurant Association, the ARQ, they're not alone. About 80 per cent of the province's restaurants received CEBA from the federal government. Two-thirds have yet to make a single payment.

The loan provided small- and medium-sized businesses with loans of $60,000 or $40,000 to help weather the pandemic.

The repayment deadline is Dec. 31. Those who meet that deadline will have $20,0000 of the loan forgiven. In the case of a $40,000 loan, $10,000 would be forgiven.

The federal government recently extended the deadline to Jan. 18, 2024.

The ARQ says that's not much of a break and that restaurant owners are facing many challenges, including the labour shortage and rising costs.

"Sales are up but so is inflation. So when I see income coming in, I'm like, wow, I'm making all this money. Then the bills come in. I'm, like, hold on a second, there's nothing left," said Insogna.

The ARQ says 4,000 Quebec restaurants have shuttered since the beginning of the pandemic.

"We had around 21,000 restaurants before the pandemic, and now there are around 17,000, so it's a big loss," said the association's spokesperson, Dominique Tremblay.

The government has offered an alternative deadline of March 28 if businesses can refinance their CEBA debt with a financial institution.

"It's almost like if someone is struggling with debt load, encouraging people to pay their Visa card with a new Mastercard," said Jasmin Guenette, vice-president of public affairs at the Canadian Federation of Independent Business (CFIB).

Both the ARQ and the CFIB are calling for a year-long extension.

"It's devastating, it's heartbreaking," said Insogna.

If nothing changes, he said, he might have to close for good.