B.C. watchmaker faces $40K bill, deemed ineligible for pandemic loan – BC

B.C. watchmaker faces K bill, deemed ineligible for pandemic loan – BC

A Vancouver watchmaker is running out of time to repay a federal government loan he took out during the COVID-19 pandemic, having recently learned he was ineligible for it due to a single-digit error.

B.C. watchmaker faces K bill, deemed ineligible for pandemic loan – BC

Jason Gallop, owner of Roldorf & Co., entered one wrong number when applying for $40,000 through the Canada Emergency Business Account (CEBA) in 2020. He learned of the mistake the next year when his application for another $20,000 was declined because of it.

Gallop said he tried right away to fix it by contacting his bank and CEBA administrators, each of which suggested the other party was responsible for rectifying the issue. When a fire ripped through Gastown last April, however, he was forced to move his business and amidst that distraction, the mistake was never resolved.

Click to play video: 'Vancouver restaurant owner struggling to repay CEBA loan'

Vancouver restaurant owner struggling to repay CEBA loan

Last month, he got a letter from his bank informing him he was ineligible for the initial $40,000 he took out, meaning he has to pay repay the full sum by Dec. 31 — instead of Jan. 18 — and will receive no federal forgiveness.

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“My gut reaction was probably horror and disbelief. I could understand that the situation hadn’t been dealt with,” Gallop told Global News on Friday.

“Actually reading that letter, it was a horror movie moment. It has set me off where it makes it hard to sleep because you’re thinking about it the whole time. It’s hard to run a business when you’re under that kind of stress.”

Click to play video: 'Calls mount for federal government to extend CEBA repayment period'

Calls mount for federal government to extend CEBA repayment period

Ottawa has extended the CEBA repayment deadline twice — first from Dec. 31, 2022, to Dec. 31, 2023, and then from the end of this year to Jan. 18, 2024.

According to the federal government, $20,000 will be forgiven and no interest will be charged on a loan of $60,000 as long as $40,000 is repaid by Jan. 18. Similarly, $10,000 will be forgiven on a $40,000-loan if $30,000 is repaid by the deadline. Other forgiveness scenarios are outlined on its website.

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That doesn’t apply, however, to an estimated 50,000 businesses deemed ineligible, which must repay the full amount in about two weeks.

Click to play video: 'Small businesses struggling to repay CEBA loans'

Small businesses struggling to repay CEBA loans

Global News has reached out to Gallop’s bank as well as the Canada Revenue Agency to find out why they can’t resolve the single-digit error in his case, but did not hear back.

“It seems like there is nothing behind CEBA at the moment other than a call centre … where honestly, the answers that they give are on the website. So you can’t appeal to the person on the telephone,” Gallop said.

“There’s no remediation process whatsoever. They will not open up the file to look at.”

Click to play video: 'CEBA repayment deadline approaches'

CEBA repayment deadline approaches

In an emailed statement, the federal finance minister’s press secretary said that in 2021, Ottawa established a process in which small business owners with incomplete or ineligible CEBA applications “were contacted multiple times by their financial institutions, inviting them to provide further details to prove eligibility.”

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“Businesses, who either did not respond to these requests or who remain ineligible, must repay their CEBA loan in full by Dec. 31, 2023,” wrote Katherine Cuplinskas.

Click to play video: '‘Give small business owners more time’: Canadian government pressured to extend CEBA repayment deadline'

‘Give small business owners more time’: Canadian government pressured to extend CEBA repayment deadline

Dan Kelly, president of the Canadian Federation of Independent Business, said his organization is receiving so many calls from confused business owners who have been deemed ineligible, and claim to be learning about it for the first time, he believes the process was somehow flawed.

“It suggests that there have been some files that have slipped through the cracks, and it’s deeply unfair to rule out a business’s ability to get the benefits of the program for making silly clerical errors, or perhaps applying under the wrong stream, especially given that those applications happened in the middle of a worldwide economic collapse,” he said.

“What we need government to do is to reopen the process to review these files, so if there is a legitimate claim that the businesses are eligible, that they have their day in court.”

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Click to play video: 'Navigating the Mortgage Minefield: Insights on Canada’s looming interest shock'

Navigating the Mortgage Minefield: Insights on Canada’s looming interest shock

Gallop, meanwhile, said it’s “going to be a massive struggle” to get through the next few months. The pandemic hurt his business, the insurance claim for the 2022 fire is still not resolved and inflation continues to sting, he said.

“We will push through this, but what would make it easier is for the government to do the right thing here in this case and sort out a very basic clerical issue.”

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