Short answer: not through a government program. CEBA forgiveness ended in 2024, and the CRA’s stated goal for defaulted CEBA loans is full repayment, either in one payment or through a payment arrangement. The formal ways to reduce what you owe are insolvency processes, and they work differently for corporations and sole proprietors.
Forgiveness is over
Partial forgiveness of up to $20,000 was only available to businesses that repaid the rest of their loan by January 18, 2024, or by March 28, 2024 if they had applied to refinance with their own institution by January 18. Those deadlines are final. Any remaining CEBA balance, including the part that would once have been forgiven, is now due by December 31, 2026.
What the CRA is looking for
The Department of Finance says the CRA reviews each defaulted CEBA loan case by case and aims for either a lump-sum payment or a payment arrangement “so that the loan is fully repaid.” There is no published program for settling CEBA debts for less. See CEBA payment plans with the CRA.
Sole proprietors and partners
Your CEBA loan is a personal unsecured debt. A Licensed Insolvency Trustee can include it in a consumer proposal, which offers creditors less than the full amount over time and needs their approval, or in a personal bankruptcy. Both affect your credit and have long-term costs, so get advice first. See CEBA refinancing for sole proprietors.
Corporations
A corporation’s CEBA loan is the corporation’s debt, and standard CEBA agreements had no personal guarantee. A corporation that cannot pay its debts can use a formal proposal or bankruptcy under the Bankruptcy and Insolvency Act. As of November 2024, about 1,650 CEBA loans worth about $90 million were recorded as insolvent. See what happens to a CEBA loan if your business closes.
Watch out for “CEBA relief” offers
Be wary of anyone who promises to get your CEBA loan forgiven or reduced for an upfront fee. There is no forgiveness left to apply for. Only a Licensed Insolvency Trustee can file a consumer proposal or bankruptcy.
Cheaper alternatives to check first
- Refinance before December 31, 2026, so the loan never goes to collections. Compare CEBA refinancing lenders.
- Pay down part of the balance now to cut interest and what is left to collect.
- Ask the CRA for a payment arrangement if the loan has already been assigned.
Sources
- Department of Finance Canada, CEBA briefing materials
- Department of Finance Canada, CEBA defaults and collections
- Hoyes, Michalos and Associates, What happens if you can’t pay your CEBA loan
This article is general information, not financial or legal advice. ceba.ca is an independent website and is not affiliated with the Government of Canada or any financial institution.