Collection of Emergency Loan for Canadians Abroad

In response to the COVID-19 pandemic, the Canadian government took an unprecedented step by offering Emergency Loans for Canadians Abroad. The initiative was intended to aid Canadians stuck overseas due to travel restrictions imposed to curb the spread of the virus. However, with the repayment deadline passed, the government has begun the collection process, sending notices to defaulting borrowers.

Design of the Loan Program

The Emergency Loan for Canadians Abroad was administered by Global Affairs Canada and offered temporary travel loans of up to $5,000. The loan was designed to assist Canadians stranded outside of Canada due to the pandemic, enabling them to either return home or find safe accommodation abroad.

Key Loan Terms:

– Loan Amount: Up to $5,000
– Interest: Interest-free
– Repayment: Within 180 days
– Payment options: Lump sum payment or installment

Collection Process

The loan was structured with specific repayment terms. If not settled within 180 days, the overdue accounts would be referred to the Canada Revenue Agency (CRA) for collection.

Global Affairs, via their COVID-19 Loan Recovery Team, has begun sending default notification letters to borrowers who have crossed the 180-day deadline.


Default Notification Letter Sample:


“Our records indicate that you have a balance due of XXXXX to the Government of Canada for the loan you have received under the COVID‐19 Emergency Loan Program for Canadians Abroad.


The COVID‐19 Emergency loan is an interest‐free loan that must be paid back to Global Affairs Canada. If you have not paid it in full within 180 days of receiving the initial invoice, we will notify the Canada Revenue Agency of your remaining debt to the Government of Canada. Once notified, the Canada Revenue Agency can use money owed to you by any Government of Canada department or agency to reduce or repay your remaining debt. Your 180‐day reimbursement period began on 2020‐11‐XX.”


Consequences of Default

Similar to the CERB repayment, once these accounts are sent to the CRA for collection, loan recipients will find their future tax refunds, EI, CRB, CCB, CPP, and other government benefits withheld until the loan is repaid.

Dealing with Loan Repayment

While these travel loans may not lead anyone to file insolvency, these debts are dischargeable in bankruptcy or through a consumer proposal, especially if the borrower is filing insolvency for other unsecured debts.

The financial strain caused by COVID-19 still lingers for many Canadians, and for some, 180 days may not have been enough time to repay.

If you receive such a letter, don’t panic. It is advisable to contact either Global Affairs or the Canada Revenue Agency to discuss repayment options.

Avoiding High-Interest Loans

It is crucial not to resort to high-interest installment loans or payday loans to pay back these travel loans. Although the loan needs to be repaid, the government understands the continued financial strain most Canadians face and will be open to discussions.

When You Can’t Repay

If repayment is an issue due to other credit card debts and loans, consider consulting a Licensed Insolvency Trustee to discuss options to manage all your debt issues.


The Collection of Emergency Loan for Canadians Abroad is a necessary measure by the Canadian government to recover funds lent during the crisis. While the initiative was instrumental in assisting stranded Canadians, borrowers must now meet their obligations and repay the loans. It’s important to remember that there are options available for those struggling with repayment, and it’s always best to consult with professionals to understand the best course of action.

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

Discuss options to get out of debt with a trained & licensed debt relief professional.