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They certainly must.
If they cancelled, they are liable. That is the starting point.
if they want to avoid that then they have to start negotiating, for instance offering deferrment etc.
They cannot just refuse your deposit back. They are in breach.
It isn't their fault of course, but that is not your problem.
Don't let them fob you off.
Can I clarify anything for you?
Then a deferrment won't work for you. They have a duty to refund in full.
You are absolutely right.