PacifiCan is the federal economic development agency dedicated to help British Columbians, and it is launching a new $108-million program that provides interest-free loans up to $250,000 to eligible tourism businesses that apply by Feb. 20.
News of the program comes as countless ÎÚÑ»´«Ã½ small businesses, including tourism operators and restaurateurs, are at risk of folding because owners accepted interest-free ÎÚÑ»´«Ã½ Emergency Business Account (CEBA) loans during the pandemic and now need to pay the money back by Jan. 18.
Failing to meet CEBA's repayment deadline would mean that the small-business owners would not be able to keep a portion of the original loans.
PacifiCan's program's mission is to increase the size of small and medium-sized tourism businesses in the province, thereby creating jobs, a more competitive industry and potentially globally successful businesses. Approximately 15 per cent of the program's loans are set to be for Indigenous applicants.
Businesses and not-for-profit organizations can apply for the funding, with not-for-profit ventures able to keep the money and not pay it back.
Businesses that get loans would enter into contracts and agree to repayment schedules.
To be eligible, applicants must have financially viable businesses that have operated for a minimum of two years in ÎÚÑ»´«Ã½
"Restaurants, accommodation and retail are not normally eligible," PacifiCan's says. "Some exceptions can be made for restaurants or accommodations that are an anchor for a tourism community."
Recipients who get funding must spend the money by March 31, 2026.
Project that are chosen to receive loans must include at least one of the following priority areas:
• they support active tourism – projects that attract domestic and international visitors to participate in outdoor recreational experiences. This also includes improvements to make active tourism inclusive and accessible;
• they increase tourism benefits for communities;
• they support Indigenous tourism industry – projects that are either Indigenous-owned or led that improve or increase Indigenous tourism experiences;
• they support economic, environmental and cultural sustainability;
• they extend the tourism season; and
• they complement support provided through provincial programs.
Preference will be given to project proposals that have a high impact on creating or maintaining jobs, increase visitors and achieve strong revenue growth. The winning bids are also expected to have a lasting impact that is felt long after the life of the project. Preference is also given to projects that align with community or regional tourism strategies and have funding outside of PacifiCan that comprises more than have of the projects' total values.
The intent of the program is to help fund infrastructure upgrades, such as trail development and leasehold improvements. It can also fund costs incurred when designing new or improved tourism products and services. Business owners can use the money to buy or rent machinery. They can also use it to pay for community engagement, planning, marketing, product demonstrations and acquiring new technology.
They are not able to use the PacifiCan loan to refinance existing debt, buy assets at prices that exceed fair market value or pay for lobbying. Other ineligible costs include salary bonuses, dividend payments, entertainment expenses, motor vehicles, land or building acquisitions, donations and ongoing operational costs.
It is unclear what uptake the program will have given the discontent felt by many small-business owners due to the CEBA loan program fiasco.
The CEBA program helped fund small businesses that were forced to close or limit operations due to public health mandates during the pandemic.
Businesses in the program applied for interest-free government loans up to $60,000, with the incentive being that $20,000 would be forgiven if the rest was repaid by a future date.
Prime Minister Justin Trudeau's government recently granted a modest extension to the repayment deadline: to Jan. 18, 2024, from December 31.
Small business advocates, such as BC Restaurant and Food Services Association CEO Ian Tostenson, have called that 18-day extension "disappointing," and are urging Ottawa to push the repayment deadline into 2025.
“Two-thirds of small businesses do not have the money to repay their CEBA loan and half of those have no capacity to borrow in order to secure the forgivable portion, said Canadian Federation of Independent Business CEO Dan Kelly. "If a business cannot repay the loan in full by Jan. 18, their CEBA debt increases by as much as 50 per cent, creating the potential for a quarter million business failures."
