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Business groups warn of trade and hiring impact as dispute with India continues

People protest outside the Indian Consulate in Vancouver on Sept. 25.DARRYL DYCK/The Canadian Press

Companies operating in Canada and India are taking a hit as the diplomatic dispute between the two countries stretches into its second month, according to business groups.

Relations between Canada and India were thrown into turmoil in September when Prime Minister Justin Trudeau alleged that India’s government was responsible for the killing of Hardeep Singh Nijjar, a Canadian citizen who advocated for an independent homeland for Sikhs.

In advance of the accusations becoming public, Ottawa cancelled a trade mission and suspended trade talks, which business groups had expected would at least produce an interim free-trade deal by the end of the year.

With no end in sight, and continued escalation – such as Canada pulling out dozens of diplomats on Thursday – community leaders say businesses are in a heightened state of uncertainty.

“Business wants clarity, stability and predictability, and those three things have not been there,” said Victor Thomas, president of the Canada India Business Council. “In many ways, we’re still trying to figure out how we navigate this new period of time.”

India has had a huge role in Canada’s economy through its diaspora, with 1.3 million Canadians reporting their ethnic origin as Indian in the 2021 census.

The trading relationship, though, has been disproportionately smaller. India is Canada’s eighth-largest trading partner, with $5.6-billion in exports in the last year, a fraction of what Canada sends to the U.S. or China. The majority of exports are from resource extraction or agriculture.

Businesses had hoped a trade deal might turn that around. In May, the two countries released a joint statement saying they hoped an initial trade deal might be signed by the end of this year, and lead to expanded investments in areas such as clean technology.

But relations turned frosty after Mr. Nijjar’s death in the summer, and the trade talks were officially postponed in September.

“It’s a very big shock and setback for the business community because this kind of episode creates a lot of uncertainty about what’s going to happen next,” said Satish Thakkar, chair of the Canada India Foundation.

Businesses have been careful about expressing concerns publicly during the tense diplomatic environment, but groups say they are hearing growing worries from their members.

Of particular concern is India’s suspension of visa services, said Matthew

Groups call on Ottawa for permanent funding for Black business programs

Andrea Pierce, executive director of ImmigrantsCan, says legislative changes are needed to address the systemic barriers many Black Canadians face.Spencer Colby/The Globe and Mail

Black business and community groups are calling on Ottawa to permanently fund many programs that are set to expire.

The federal government began to introduce programs to support Black communities in 2018 after it endorsed the United Nations International Decade for People of African Descent, which runs until 2024. Ottawa introduced more new initiatives such as the Black Entrepreneurship Program after George Floyd’s killing and Black Lives Matter demonstrations in 2020.

But the programs have all had a set shelf life. For example, the Supporting Black Canadian Communities Initiative, or SBCCI, was created in the 2019 budget and given $25-million over five years to build capacity in grassroots Black-serving organizations across the country. That funding was set to run out in the 2023-24 fiscal year, but in the 2023 budget, the program was given one additional year of funding at $25-million with no clear guidance on what happens after that.

Hundreds of Black entrepreneurs and organizations began writing to federal ministers Karina Gould and Ahmed Hussen this month asking what legislative change will ultimately come from these initiatives.

“We really need a permanent policy to come out of it, because if these programs end … that’s it,” said Jackee Kasandy, co-founder of the Black Entrepreneurs and Businesses of Canada Society.

Employment and Social Development Canada said SBCCI has supported 939 projects with its total $50-million budget, and spent another $82-million on capital projects – such as renovations – for 1,300 Black-serving groups across the country.

The department said Ms. Gould, the Minister of Families, Children and Social Development, will explore options after engaging with Black communities and leaders this fall.

While many organizations and entrepreneurs are hoping the funding for these programs continues, their hope for change goes behind budget items.

“It’s not the cheque-writing that’s required,” said Deress Asghedom, founder of Vaster, a cannabis technology startup in Vancouver. “It’s also the commitment to be an ally and recognizing there are challenges. Recognizing there isn’t an even playing field. And then making that commitment to say that we’re here for the long term.”

Black Entrepreneurship Program a ‘beacon of hope,’ though barriers persist

Black-owned businesses tend to be smaller, less profitable than others, Statscan says

A Statistics Canada study released

Small business groups push for extension to repay outstanding CEBA loans

A hand painted sign about the Canada Emergency Business Account is seen in the front window of Frances Watson, a store on Queen St. West, on April 15, 2020.Fred Lum/the Globe and Mail

Small-business groups are asking the federal government to further extend the deadline for repaying Canada Emergency Business Account loans when the budget is tabled later this month, as few of the loans have been paid back.

Ottawa announced the creation of the CEBA program on April 9, 2020, and sent more than $49-billion to almost 900,000 businesses. It was the first and most widely used pandemic support program for businesses.

The original repayment deadline for the interest-free, partially forgivable loans was Dec. 31, 2022; after that, businesses would start paying interest and forfeit the forgivable portion of the loans. Last year, citing the challenges posed by the Omicron variant, Ottawa extended the deadline by 12 months.

But almost three years after the program began, most of the loans are still outstanding. Export Development Canada, the Crown corporation that oversees CEBA, told The Globe and Mail that just 13 per cent, representing $5.7-billion, were repaid as of the end of November, 2022. EDC first provided these figures to CBC.

The reason: Many of those businesses are still struggling with debt incurred during the pandemic, business groups say.

Olivier Bourbeau, Restaurants Canada’s vice-president of Quebec and federal affairs, said his association recently surveyed its members and found that 20 per cent of those who had not yet repaid their CEBA loans were not sure they ever could. About 30 per cent of its members reported having pandemic-related debt of more than $100,000.

Data from the Office of the Superintendent of Bankruptcy show there were 533 insolvencies in the accommodation and food-services sector in the 12 months ending Jan. 31, up from 377 in the prior 12 months – an increase of 41 per cent.

Under the current rules, CEBA loans are worth either $40,000 or $60,000 and are interest-free and partly forgivable ($10,000 for the smaller loans, $20,000 for the larger ones) if the balance is repaid by Dec. 31, 2023. After that, the forgivable portion is forfeited, interest begins to accrue at a 5-per-cent rate, and the loan goes to collections if not repaid in full by Dec. 31, 2025.

Restaurants Canada has proposed the government phase out the loan forgiveness over six-month periods, so that