I was really looking forward to the 2023 federal budget to see how it would help improve the reality that many small business owners are living in a post-pandemic economy.

Ottawa entrepreneurs, myself included, were hoping the federal budget would address the Canada Emergency Business Account (CEBA) loans that many had to apply for when pandemic-related mandates forced businesses to close their doors or work at a reduced capacity.

CEBA loans are worth either $40,000 or $60,000 and are interest-free and partly forgivable ($10,000 for the smaller loans, $20,000 for the larger ones) if the balance is repaid by Dec. 31, 2023. The repayment date was extended by a year in 2022 when it was clear the economy hadn’t recovered for business owners. Businesses can still repay after the deadline, but they lose the forgivable portion of up to $20,000 and start accruing interest.

The truth is, many business owners are still not in a position to repay their CEBA loans by the end of the year. We were holding our breath for a second repayment deadline extension. The fact that the federal budget didn’t even address small business debt incurred because of the pandemic or the pressure of increased costs in operating a business was disappointing.

In a recent survey, the Ottawa Coalition of Business Improvement Areas (OCOBIA) — found that 69 per cent of respondents reported their revenues were worse than in 2019, while 87 per cent said repaying the CEBA loan in full by Dec. 31, 2023 will impact their business. Just over 40 per cent said that repaying the loan in full by the deadline will likely force their business to close.

Ottawa’s small business sector has had a disproportionate difficulty in recovering from the effects of the pandemic compared to other major cities in North America. The reasons include the high number of federal workers back in their offices only part-time, which severely affects businesses surrounding those offices, residual convoy-related PR struggles the city still has to deal with, and increased operational costs.

As the Canadian economy slows and interest rates hike, Ottawa small business owners will face difficult decisions at the end of the year if the federal government doesn’t reconsider an extension.

On a positive note, the budget secured commitments from Visa and Mastercard to lower fees for small businesses, while also protecting reward points for Canadian consumers. Most businesses can expect to see their fees reduced by up to 27 per cent. More details, including eligible businesses, will be released in the coming weeks. This is a great win and a move that I hope will truly benefit small business owners — the devil will be in the details.

Lastly, the budget announced the introduction of tax changes to facilitate the creation of Employee Ownership Trusts (EOTs). EOTs are common in the United States and the United Kingdom. They let owners transition their businesses to employees via trusts through which employees can build their ownership stakes over time with certain tax benefits.

With more than 75 per cent of small business owners planning to retire in the next decade, EOTs will give business owners an alternate succession option. Selling the business to employees would become a more attractive proposition for owners looking to exit, and employee-owned businesses would be able to re-invest more of their profits in growth. Details for this program are not yet finalized but the government is aiming to roll it out in the 2024 tax year.

Less credit card transaction fees and opportunities to sell our businesses to our employees are things to get excited about. However, we still need to make sure our businesses survive the financial pressure of the CEBA loan repayments in nine months.

Karla Briones is a local immigrant entrepreneur and owner of Global Pet Foods Kanata & Hintonburg; founder of the Immigrants Developing Entrepreneurs Academy; and an independent business consultant. The opinions here are her own. Her column appears every two weeks.