Canadian Imperial Bank of Commerce is preparing for an onslaught of applications from small businesses looking to tap $25 billion in government relief from the coronavirus pandemic.
“They say that this pandemic is like wartime, where all Canadians gear up for the war against the enemy that you really can’t see,” Chief Executive Officer Victor Dodig said in an interview. “We’re doing the same thing.”
The head of the country’s fifth-largest lender said there’s a “hive of activity” within the bank to prepare for the government’s upcoming Canada Emergency Business Account program, which will provide interest-free loans of as much as $40,000 to small businesses and not-for-profit organizations.
“We have teams working around the clock to have our digital platform ready, and it’s ready for that,” Dodig said. “We are staffing up our contact centers, we’ve refined our processes, we’ve reached out to clients to make sure that they have direct deposits in place — that they’re more digitally oriented, digitally minded as we go into this, just so that they’re not waiting.”
The government program, in coordination with the banks, is expected to roll out by mid-April. Dodig said he understands frustrations some have with relief efforts not coming quickly enough. “There’s always a push of time versus preciseness, and I think everyone’s erring on the side of time and getting a good deal of precision right,” he said.
In the U.S., a similar program to distribute US$349 billion in aid to small-business owners has been fraught with a barrage of applications, a lack of clear rules and an overwhelmed system.
Toronto-based CIBC initially expected 150,000 of its small-business clients to tap the Canadian government relief initiative, though Dodig said demand could be higher, totaling as many as 200,000.
The small-business relief plan is the latest in a series of government-led initiatives to help Canadians during a pandemic that has claimed more than 83,000 lives worldwide. CIBC has been working with its customers to navigate the upheaval, including deferring mortgage payments, cutting credit-card rates and extending credit to businesses where needed, Dodig said.
CIBC has deferred payments on $30 billion of mortgages, credit cards and credit lines in personal banking, while some 80,000 credit-card clients are getting a rate reduction retroactive to March 15, Dodig said.
Dodig said he’s realistic about the future for Canada, the economy and banks, expecting a recession and adjustment period before things start to return to normal.
“You’re not going to see this large bounce-back in the economy,” he said. “You will see it kind of get back to a normal level where things aren’t dropping by 10 per cent and 20 per cent, but we could be on the other side of zero for a couple of quarters as we get through this. And I think that, given what’s going on, that would be a good outcome.”