Short answer: if any CEBA balance is still unpaid after December 31, 2026, the loan is in default. Your financial institution will try to collect first, and if that fails the loan is likely to be assigned to the CRA for collection. The debt does not go away.
What to expect, step by step
- The loan is past due. The remaining principal, plus any interest that has built up at 5% a year since January 19, 2024, was due on December 31, 2026.
- Your financial institution contacts you. The bank or credit union that issued the loan makes the first collection efforts.
- The loan is assigned for collection. If it stays unpaid, it is assigned to Export Development Canada (EDC), which administers CEBA, and the CRA collects it on EDC’s behalf. Once that happens, your bank can no longer accept payment.
- The CRA contacts you. The CRA reviews each case and aims for either a lump-sum payment or a payment arrangement that repays the loan in full.
This is already happening at scale. By November 2024, about 70,000 defaulted CEBA loans worth $3.4 billion had been assigned to the CRA. They include loans found ineligible for the program, which were due in full on December 31, 2023, and loans with missed interest payments.
Who is responsible for the debt
- Corporations: the loan belongs to the corporation. Standard CEBA agreements did not include a personal guarantee, so collection is against the corporation. See is the CEBA loan personally guaranteed?
- Sole proprietors and partners: the business is you, so the CEBA loan is your personal debt. See CEBA refinancing for sole proprietors.
Does closing the business or waiting make it go away?
No. Closing the business does not cancel the loan; read what happens to a CEBA loan if your business closes. The federal government has said a six-year limitation period applies to CEBA debt, the same framework used for Canada Student Loans. Payments, acknowledgements and collection activity can affect how a limitation period runs, so do not treat it as a way out. Get legal advice about your own situation.
Your options
- Before December 31: pay in cash, borrow from your own bank, or compare lenders that refinance CEBA loans.
- Pay part now: any principal you repay before the deadline reduces what goes to collections.
- After the deadline: ask the CRA for a payment arrangement. See CEBA payment plans with the CRA.
- If you have other debts too: sole proprietors can speak with a Licensed Insolvency Trustee. See can you settle a CEBA loan for less?
Sources
- Department of Finance Canada, CEBA defaults and collections
- Department of Finance Canada, CEBA questions and answers
- CRA, Types of debt collected by the CRA
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.