Latest Developments in the Canadian Economic Accounts
Borrowing, repayments and bankruptcies by industry: Results from the Canada Emergency Business Account program

Introduction

On March 27, 2020, the Government of Canada introduced the Canada Emergency Business Account (CEBA) program to help eligible small and medium-sized businesses cover operating costs during the COVID-19 pandemic.^Note  The CEBA program provided interest-free loans of up to $60,000 that would qualify for partial loan forgiveness of up to one-third of the loan value if repaid by a set deadline.^Note After that time, the outstanding balances would be converted to three-year term loans, subject to an interest rate of 5% per annum, and would not qualify for loan forgiveness. The program accepted loan applications between April 2020 and June 2021 and provided more than $49 billion in funding to nearly 900,000 businesses.

The original deadline for repayment to qualify for partial loan forgiveness was December 31, 2022. However, the deadline was extended to December 31, 2023, as the Omicron variant of COVID-19 necessitated further public health restrictions that delayed recovery for many businesses. The repayment deadline was extended once again, to January 18, 2024, in recognition that the end of December is a busy time for many businesses.

The purpose of the article is threefold: (1) to examine the amount of CEBA funding that was allocated to different industries; (2) to determine the extent to which CEBA loans were repaid; and, (3) to explore how the use of this financial support aligned with bankruptcy patterns in the lead up to and immediate aftermath of the January 2024 deadline to qualify for partial loan forgiveness. The results provide some insight into how the use of emergency funding programs may have influenced short and medium-term business survival rates.

The article leverages loan-level microdata from Export Development Canada, the institution that administered the CEBA program, which in turn received information from the financial institutions that provided financing to businesses. This data was then linked with bankruptcy data received from the Office of the Superintendent of Bankruptcy and with Statistics Canada’s business register.^Note  References to industry detail refer to the North American Industry Classification System,^Note  whose hierarchy covers industrial sectors, sub-sectors, industry groups, and industries. For the sake of simplicity, these will be referred to as industries.

The pandemic was most challenging for client-facing industries

While the pandemic was a challenging period for many businesses, those that provided client-facing services—for example accommodation and food services, transportation and warehousing, and administrative, waste management, and remediation services—were among the most severely impacted (Chart 1). Output contracted sharply in these industries during the initial lockdown, anywhere from about 30% to 60%, and had not recovered to pre-pandemic levels by the end of 2023. This was due, in part, to successive waves of public health restrictions.^Note  Retail trade, and to a lesser extent construction and manufacturing, also experienced large output declines during the initial lockdowns of roughly 20% to 25%. However, these industries recovered more quickly when the initial COVID-19 restrictions were eased. The recovery in construction activity, in particular, was buoyed by a surge in demand for single-family homes and home renovations following the lockdowns in April 2020.

Data table for Chart 1

Data table for Chart 1 Table summary
This table displays the results of Data table for Chart 1 Accommodation and food services, Transportation and warehousing, Construction, Administrative and support, waste management and remediation services, All industries and Retail trade, calculated using index, January 2020=100 units of measure (appearing as column headers).

	All industries	Construction	Retail trade	Transportation and warehousing	Administrative and support, waste management and remediation services	Accommodation and food services
	index, January 2020=100
Note: Index created based on seasonally adjusted data at annual rates in chained 2017 dollars. Source: Statistics Canada, table 36-10-0434-01.
2020
January	100.0	100.0	100.0	100.0	100.0	100.0
February	100.2	100.2	99.5	97.8	100.0	98.5
March	92.7	96.1	90.1	80.6	81.4	63.1
April	82.8	79.5	74.7	57.2	69.7	36.3
May	86.5	92.0	87.3	58.3	71.7	42.2
June	91.7	97.7	102.4	64.6	80.8	52.8
July	94.1	96.1	101.9	67.1	82.8	62.8
August	95.0	95.8	101.5	67.6	86.0	68.6
September	95.9	96.2	104.0	69.1	88.2	68.7
October	96.5	97.3	105.0	71.2	90.1	63.1
November	97.1	97.6	105.9	72.5	91.3	64.1
December	97.4	99.3	103.0	73.9	92.5	58.2
2021
January	98.0	100.2	99.9	73.0	93.8	61.3
February	98.2	102.1	106.3	72.3	92.9	63.3
March	99.2	104.2	108.8	73.3	93.1	71.6
April	98.2	106.7	102.6	73.3	93.4	64.5
May	97.9	104.6	99.0	73.0	93.1	62.5
June	98.8	103.2	103.9	73.7	93.6	72.8
July	99.5	102.0	103.7	77.0	94.8	80.9
August	100.3	102.0	106.0	79.8	96.1	87.1
September	100.7	101.5	105.3	81.3	96.3	87.6
October	101.6	102.5	106.0	83.6	97.1	86.6
November	102.1	102.7	106.6	86.9	97.3	88.7
December	102.5	102.9	103.8	90.0	98.2	87.4
2022
January	102.2	103.9	104.8	81.6	98.3	76.2
February	102.9	105.0	105.2	84.3	99.1	84.1
March	103.6	105.4	107.0	88.9	99.4	89.7
April	103.6	104.8	106.3	90.1	98.9	90.4
May	103.9	104.6	106.7	91.9	99.2	92.6
June	104.1	104.6	106.1	93.2	99.4	93.4
July	104.2	104.1	105.7	92.5	99.7	94.3
August	104.5	103.9	106.5	92.4	99.9	95.5
September	104.7	103.1	106.1	93.3	99.9	95.6
October	104.5	103.9	105.6	93.5	99.6	96.1
November	104.4	103.8	104.4	93.6	99.8	95.0
December	104.1	103.4	105.5	92.2	99.5	95.0
2023
January	105.1	103.6	107.2	94.7	100.0	97.6
February	105.3	103.1	106.7	94.9	100.6	97.0
March	105.6	103.6	106.9	96.3	100.6	96.3
April	105.6	104.2	107.6	96.9	101.1	95.6
May	105.7	103.4	107.6	97.4	100.8	95.6
June	105.5	103.5	107.5	96.7	100.7	94.1
July	105.5	103.7	106.9	96.9	100.2	95.1
August	105.7	103.5	106.9	98.0	100.0	94.4
September	105.6	103.0	107.2	98.4	100.2	95.0
October	105.8	102.8	108.3	98.4	100.2	95.7
November	106.0	102.3	108.3	99.3	100.2	96.2
December	105.8	101.8	108.4	99.0	100.1	96.6

As well, traditional business operations were disrupted during the pandemic, impacting both revenues and costs. From 2019 to 2020, approximately 47% of all small and medium sized enterprises—businesses with annual salary expenses of less than $1.5 million—experienced a drop in gross profit,^Note  totalling a loss of nearly $60 billion. This compares with 35% of all small and medium sized enterprises that experienced a drop in gross profit from 2018 to 2019 (-$33.3 billion). By this measure, businesses that took out CEBA loans experienced slightly more financial pressure during the first year of the pandemic, with approximately 56% experiencing a decrease in gross profit from 2019 to 2020 (-$33.4 billion). The businesses that reported the largest declines in gross profit were client-facing ones, such as food service and drinking places, hotels, and offices of dentists and physicians.

Construction and client-facing services businesses most likely to obtain a CEBA loan

A considerable amount of the CEBA loans (by value) were extended to businesses that offered client-facing services (Chart 2).^Note  However, the construction industries collectively received the most funds through the CEBA program, totalling more than $6.4 billion (13.1% of total loan disbursements).^Note  More than a quarter of these loans were extended to residential building construction businesses, while building equipment and building finishing contractors each accounted for a further 20%. The construction industry is composed of many legal entities relative to other industries, which can explain the relatively larger uptake in CEBA loans by this industry (Table 1).

Data table for Chart 2

Data table for Chart 2 Table summary
This table displays the results of . The information is grouped by Industry (appearing as row headers), Total CEBA loans, calculated using billions of dollars units of measure (appearing as column headers).

Industry	Total CEBA loans
	billions of dollars
Note: CEBA stands for the Canada Emergency Business Account. Source: Statistics Canada, "Borrowing, repayments and bankruptcies by industry: Results from the Canada Emergency Business Account program ", Latest Developments in the Canadian Economic Accounts (13-605-X), 2025; custom tabulation.
Construction	6.4
Professional, scientific and technical services	5.5
Retail trade	4.6
Transportation and warehousing	4.1
Accommodation and food services	4.0
Health care and social assistance	3.8
Other services (except public administration)	3.7
Agriculture, forestry, fishing and hunting	3.2
NAICS unavailable	2.8
Real estate and rental and leasing	2.4
Administrative and support, waste management and remediation services	2.0
Manufacturing	1.9
Wholesale trade	1.7
Finance and insurance	0.9
Arts, entertainment and recreation	0.8
Educational services	0.6
Information and cultural industries	0.5
Mining, quarrying, and oil and gas extraction	0.2

Professional, scientific, and technical services, despite experiencing a relatively mild contraction in economic activity, received the second highest loan support ($5.5 billion). Most of these loans were granted to businesses that provided computer system design and related services. Retail trade ($4.6 billion) had the third largest loan support, largely concentrated in health and personal care retailers, and grocery and convenience retailers.

Two of the hardest hit industries during the pandemic—transportation and warehousing and accommodation and food services—received $4.1 billion and $4.0 billion respectively. Within transportation and warehousing, more than 70% of CEBA loans were to freight trucking companies. In the accommodation and food services industry, nearly 80% of program loans were to full-service restaurants and limited-service eating places.

Client-facing services and construction have the highest rates of outstanding CEBA loans

CEBA loans that were not repaid by the forgiveness deadline and therefore no longer qualified for partial loan forgiveness represented 18.8% of CEBA loans (about $9.2 billion of the $49.2 billion).^Note  These loans were rolled over into term loans due on December 31, 2026, at a rate of 5.0% per annum.^{Note  Note}  Industries that were the hardest hit by the lockdowns, and experienced the longest recovery, were more likely to have the greatest share of outstanding loans at the end of the program (Chart 3). These included transportation and warehousing, administrative and support, waste management and remediation services, and accommodation and food services. As well, construction had an above average share of outstanding loans, despite being one of the fastest industries to recover from the lockdowns.

Data table for Chart 3

Data table for Chart 3 Table summary
This table displays the results of . The information is grouped by Industry (appearing as row headers), Outstanding and Repaid, calculated using percent units of measure (appearing as column headers).

Industry	Outstanding	Repaid
	percent
Note: CEBA stands for the Canada Emergency Business Account. Source: Statistics Canada, "Borrowing, repayments and bankruptcies by industry: Results from the Canada Emergency Business Account program ", Latest Developments in the Canadian Economic Accounts (13-605-X), 2025; custom tabulation.
Transportation and warehousing	30.7	69.3
Administrative and support, waste management and remediation services	22.7	77.3
Accommodation and food services	21.9	78.1
Construction	20.1	79.9
Information and cultural industries	19.3	80.7
Total	18.8	81.2
Mining, quarrying, and oil and gas extraction	17.6	82.4
Other services (except public administration)	17.4	82.6
Manufacturing	17.3	82.7
Arts, entertainment and recreation	17.3	82.7
Retail trade	17.2	82.8
Utilities	16.0	84.0
Management of companies and enterprises	14.6	85.4
Professional, scientific and technical services	14.4	85.6
Real estate and rental and leasing	14.3	85.7
Wholesale trade	14.2	85.8
Finance and insurance	12.5	87.5
Agriculture, forestry, fishing and hunting	7.3	92.7

The transportation and warehousing industry had 30.7% of their loans outstanding (approximately $1.3 billion). The highest shares of these outstanding loans were in taxi and limousine services (51.1%), other transit and ground passenger transportation services (48.4%), and interurban and rural bus transportation services (41.3%). While adjusting to health restrictions that limited personal contact, businesses in these industries would have also faced rising competition from ride-sharing services that were gaining popularity at the time.

The accommodation and food services industry also had a large share of outstanding loans at 21.9% (nearly $900 million). Businesses that provide food services had sizeable shares of outstanding loans, mainly special food services such as catering (28.3%), full-service restaurants (22.9%), and drinking places (22.8%).^Note  Traveller accommodations (13.4%) had a much lower share of outstanding loans.

The construction sector, which had the largest amount of total CEBA support, also had a relatively high share of loans outstanding at 20.1% (nearly $1.3 billion). While construction activity rebounded quickly from the initial shock of the pandemic, the sector was impacted by a slowdown in non-residential construction due in part to an increase in working from home. In addition, when financing costs started to weigh on households’ disposable income, residential construction slowed.

Bankruptcies among CEBA borrowers accelerated as the repayment deadline approached

The number of businesses that declared bankruptcy declined in the first half of the COVID-19 pandemic, ranging from about 400 to 450 per quarter throughout 2020 to a low of about 250 in the third quarter of 2021.^Note  However, the number of bankruptcies began to accelerate in mid-2022 and reached a high of over 1,200 by the first quarter of 2024. This corresponds to a period of rapidly rising interest rates and elevated input costs, as well as the end of CEBA program forgiveness (first quarter of 2024).^Note   An increasing number of these bankruptcies were from businesses that took CEBA loans (Chart 4). In the first quarter of 2021, 39% of businesses that declared bankruptcy had taken out CEBA loans; by the first quarter of 2024 this share had risen to 70%.

Data table for Chart 4

Data table for Chart 4 Table summary
This table displays the results of Data table for Chart 4 Entities declaring bankruptcy that did take CEBA, Entities declaring bankruptcy that did not take CEBA, Total bankruptcies and Total businesses declaring bankruptcies which took CEBA loans, calculated using number of loans and percent units of measure (appearing as column headers).

	Total bankruptcies	Entities declaring bankruptcy that did not take CEBA	Entities declaring bankruptcy that did take CEBA	Total businesses declaring bankruptcies which took CEBA loans
	number of loans			percent
Note: CEBA stands for the Canada Emergency Business Account. Source: Statistics Canada, "Borrowing, repayments and bankruptcies by industry: Results from the Canada Emergency Business Account program ", Latest Developments in the Canadian Economic Accounts (13-605-X), 2025; custom tabulation.
2020
Q1	539	528	11	2.0
Q2	411	342	69	16.8
Q3	445	296	149	33.5
Q4	455	313	142	31.2
2021
Q1	401	244	157	39.2
Q2	403	247	156	38.7
Q3	275	144	131	47.6
Q4	409	197	212	51.8
2022
Q1	427	197	230	53.9
Q2	543	246	297	54.7
Q3	505	187	318	63.0
Q4	681	322	359	52.7
2023
Q1	764	304	460	60.2
Q2	708	298	410	57.9
Q3	750	299	451	60.1
Q4	1076	381	695	64.6
2024
Q1	1402	415	987	70.4
Q2	1069	436	633	59.2
Q3	819	332	487	59.5

Overall, of the 9,655 bankruptcies reported between the second quarter of 2020 and the end of the deadline for repayment in the first quarter of 2024, 54.1% were businesses that had received CEBA loans. The number of bankruptcies began to ease after the first quarter, eventually falling to 819 in the third quarter of 2024; 487 of those (59.5%) were businesses that had taken out CEBA loans. Given the scope of the CEBA program and the volume of CEBA recipients, it is not surprising that this number may appear large. However, to put it into perspective, of the 898,271 CEBA borrowers over the entire program (April 2020 to January 2024), 6,343 eventually declared bankruptcy by the end of September 2024. This represents 0.7% of the total number of CEBA borrowers. In contrast, the overall bankruptcy rate for all businesses between the second quarter of 2020 and the third quarter of 2024 was 0.9% and for those businesses that did not take CEBA, that bankruptcy rate stood at 1.3%.

CEBA-borrowing businesses in the accommodation and food services industry declared the most bankruptcies, accounting for over one-fifth (20.3%) of CEBA borrowers that later declared bankruptcy (Chart 5), with most of these bankruptcies declared by full-service restaurants and limited-service eating places. The retail trade industry accounted for 13.7% of CEBA-borrowers that later declared bankruptcy while the construction industry was responsible for 11.8% of CEBA-borrowers that declared bankruptcy, largely among residential building construction companies (3.8%).

Data table for Chart 5

Data table for Chart 5 Table summary
This table displays the results of . The information is grouped by Industry (appearing as row headers), Received CEBA loans but later declared bankruptcy, calculated using percent units of measure (appearing as column headers).

Industry	Received CEBA loans but later declared bankruptcy
	percent
Notes: CEBA stands for the Canada Emergency Business Account and "n.e.c. stands for "not elsewhere classified". Source: Statistics Canada, "Borrowing, repayments and bankruptcies by industry: Results from the Canada Emergency Business Account program ", Latest Developments in the Canadian Economic Accounts (13-605-X), 2025; custom tabulation.
Accommodation and food services	20.3
Retail trade	13.7
Construction	11.8
Transportation and warehousing	7.6
Other services (except public administration)	6.9
Professional, scientific and technical services	6.9
Manufacturing	6.4
Other industries n.e.c.	26.3

In early 2024, business bankruptcies in many industries were up sharply from recent prior lows and well above levels observed pre-pandemic, but this was an acute event with bankruptcies dropping sharply over the remainder of 2024. Many bankruptcies occurred between the third quarter of 2023 and the first quarter of 2024 (Chart 6). Most notable was the rise in bankruptcies in accommodation and food services, which recorded a 139.8% increase in bankruptcies over that period (Table 2.). Bankruptcies subsequently declined in the second and third quarters of 2024; those in accommodation and food services fell by 59.1% between the first quarter high of 2024 and the third quarter.

Data table for Chart 6

Data table for Chart 6 Table summary
This table displays the results of Data table for Chart 6 Administrative and support, waste management and remediation services, Transportation and warehousing, Construction, Accommodation and food services, Manufacturing and Retail trade, calculated using number of bankruptcies units of measure (appearing as column headers).

	Construction	Accommodation and food services	Retail trade	Transportation and warehousing	Manufacturing	Administrative and support, waste management and remediation services
	number of bankruptcies
Source: Statistics Canada, "Borrowing, repayments and bankruptcies by industry: Results from the Canada Emergency Business Account program ", Latest Developments in the Canadian Economic Accounts (13-605-X), 2025; custom tabulation.
2015
Q1	79	90	82	25	28	20
Q2	89	80	55	28	23	21
Q3	67	76	64	30	20	21
Q4	73	80	61	41	23	23
2016
Q1	95	87	59	39	22	22
Q2	76	72	38	45	18	24
Q3	58	58	35	25	20	14
Q4	70	59	47	26	29	20
2017
Q1	72	69	76	28	27	15
Q2	103	67	65	32	39	21
Q3	65	62	51	49	20	20
Q4	85	64	59	41	26	28
2018
Q1	84	78	52	38	25	22
Q2	94	61	47	40	42	21
Q3	84	74	58	18	23	17
Q4	94	79	60	33	24	29
2019
Q1	109	97	65	46	31	20
Q2	91	72	58	49	32	27
Q3	80	63	54	48	19	19
Q4	73	69	76	27	29	20
2020
Q1	73	85	65	39	40	23
Q2	35	84	50	14	30	8
Q3	41	71	60	24	40	26
Q4	64	54	48	16	20	29
2021
Q1	68	52	39	22	27	19
Q2	59	57	32	22	36	24
Q3	28	43	29	15	20	20
Q4	52	71	44	34	25	20
2022
Q1	45	54	51	35	25	22
Q2	74	89	59	39	29	29
Q3	44	85	58	46	25	16
Q4	84	91	84	26	43	31
2023
Q1	82	122	90	38	48	33
Q2	84	99	79	37	41	25
Q3	82	98	85	45	46	34
Q4	131	148	126	57	66	40
2024
Q1	156	235	167	122	62	53
Q2	125	125	111	68	59	58
Q3	105	96	88	59	50	24

It is helpful to understand the intentions of businesses when it comes to repaying their outstanding CEBA loans. According to Statistics Canada’s Survey on Business Conditions, nearly two-thirds (65.6%) of businesses that had not paid back their CEBA loans anticipated having the liquidity or access to credit available to repay the loan by December 31, 2026.^Note  However, one-fifth (19.9%) of businesses reported not knowing if they would have the liquidity or access to credit to repay the loan, and 14.5% of businesses did not anticipate having the liquidity or access to credit needed to repay the CEBA loan by the deadline.^Note 

Conclusion

The CEBA program was introduced to help small and medium-sized businesses cover operating costs during the COVID-19 pandemic. Many of the businesses that applied for and received funding were in client-facing service industries, although businesses in the construction industry also received substantial CEBA funding. While most businesses repaid their CEBA loans, nearly 20% of loans remained outstanding after the initial repayment deadline. Meanwhile, there was an increasing number of bankruptcies among CEBA borrowers, although the overall rate of bankruptcy remained lower than that of non-CEBA borrowers. Most of the businesses that had outstanding loans or declared bankruptcy were in the aforementioned industries.

Successive waves of COVID-19 that necessitated recurring public health restrictions, followed by a challenging economic climate characterized by rising inflation, higher input costs, and rising interest rates and debt service costs, all likely contributed to the number of outstanding loans and bankruptcies at the end of the CEBA program. Many of the businesses that declared bankruptcy in the lead up and aftermath of the repayment deadline were likely struggling due to the prevailing economic climate and may have been unable to cope with servicing what would become an interest-bearing CEBA loan. While most businesses, when asked, anticipated repaying their outstanding CEBA loans, roughly a third of businesses indicated that repayment would be challenging.

References

Clarke, S. and J. Dekker, N. Habli, R. Macdonald and C. McCormack. 2022. Measuring the Correlation between COVID-19 Restrictions and Economic Activity. Analytical Studies: Methods and References. Catalogue no. 11-633-X. no. 040. Ottawa: Statistics Canada.  March 28, 2022.

Lafrance-Cook, A and A McDougall. 2023. A profile of corporate exits and insolvencies. Economic and Social Reports. Catalogue no. 36-28-0001. Ottawa: Statistics Canada. October 25, 2023.

Lin, X. and M. Hoffarth. 2023. An analysis of Canadian business support programs in response to the global COVID-19 pandemic. Latest Developments in the Canadian Economic Accounts. Catalogue no. 13-605-X. Ottawa: Statistics Canada. January 19, 2023.

Business or organization received a repayable loan from the Canada Emergency Business Account, fourth quarter of 2023. Statistics Canada table 33-10-0744-01. November 27, 2023.

Over 200,000 small businesses took on new debt to repay their CEBA loan. Canadian Federation of Independent Business (CFIB). March 26, 2024.

Canadian Survey on Business Conditions, fourth quarter 2023. Statistics Canada, November 27, 2023.

Status of repayment of loan from the Canada Emergency Business Account and if the business or organization anticipates having the liquidity available or access to credit to repay the loan by December 31, 2026, fourth quarter of 2023. Statistics Canada. November 27, 2023.