Mall shops got a large chunk of $26M in COVID rent money Ottawa gave Sask. businesses

This story is part of The Big Spend, a CBC News investigation examining the unprecedented $240 billion the federal government handed out during the first eight months of the pandemic.

Bruce Tucker is hopeful that if his loyal customers keep coming back, his business can stay afloat. 

Tucker owns a T-shirt printing shop in Saskatoon. When the provincial government briefly locked down non-essential businesses early in the COVID-19 pandemic, his store closed for a month.

He's been slowly reopening ever since.

"Not a lot of people were ordering shirts at first, but it's been gradually picking up," he said.

$26 million in rent help Sask. businesses

Tucker is one of the more than 4,000 Saskatchewan business owners whose rent was subsidized by Ottawa in recent months to the collective sum of $26 million. The money came from one of several programs the federal government rolled out to fight COVID-19.

Under the Canada Emergency Commercial Rent Assistance (CECRA) program, small businesses that lost 70 per cent or more of their revenue due to the COVID-19 pandemic only had to pay 25 per cent of their rent. The provinces, territories and federal government combined to cover 50 per cent, while landlords covered the remaining 25 per cent.

Renters qualified if their businesses generated $20 million or less in gross revenues in a normal year.

"Without that, I wasn't really paying the rent," Tucker said of the break from his full $2,500 monthly lease.

Just a block over, inside Saskatchewan's largest mall, the Midtown Plaza, 52 stores and 10 offices also benefited from CECRA — to a combined tune of $1 million.  

When looking at rent relief data obtained through an access to information request from the Canada Mortgage and Housing Corporation, which administered the CECRA program, the same pattern emerges in Saskatchewan's biggest cities. 

In each one, the largest clusterings of businesses that received CECRA money were in malls. 

In Saskatoon, Midtown Plaza was followed by The Centre, Lawson Heights and Market malls, which received $468,781, $431,564 and $283,849 to cover dozens of stores' rents, respectively.

Terry Napper, who manages Midtown Plaza on behalf of owner Kingsett Capital, said bigger chains like Victoria's Secret and Sport Check weren't eligible, but that several retailers and office holders were.

For professionals in the mall's tower, "it made a huge difference because they were shut down for two to three months," Napper said. 

"The last thing we need is a vacancy now," Napper said of retail space, adding that only one store in Midtown has changed hands during the pandemic. 

The mall owners also worked with tenants to lower their rent, he said. 

In Regina, Cornwall Centre mall distributed $625,000 in CECRA money to store owners, followed by Southland Shopping Centre ($433,000), Golden Mile Shopping Centre ($247,000) and Northgate Mall ($198,869).

When you also factor in two shopping centres in Prince Albert, 10 malls in Saskatchewan's three largest cities accounted for 15 per cent of the $26 million provided to businesses province-wide as of Nov. 19.

"It would be better if it came to the actual, you know, the small businesses that need it," said Tucker, the print shop owner. "But I guess everyone got hit this year."

The federal government doesn't identify specific CECRA recipients, so it remains unclear which individual businesses have received the most money.

A Lloydminster, Sask., business with the postal code S9V 2K8 received $112,500 from CECRA, the most for any one company. Two businesses that share that postal code — Boss Truck Sales and the Gold Horse Casino, which is owned by the Saskatchewan Indian and Gaming Authority — say they did not apply for CECRA. 

'Onerous' for landlords

Keith Moen, executive director of the North Saskatoon Business Association, said malls are hurting and they already pay steep property taxes. Midtown Plaza's property taxes were estimated at $4.5 million this year.

Moen said it's not a coincidence that malls topped the list of CECRA beneficiaries, given that landlords needed to apply on behalf of tenants for the money. Had businesses been able to apply directly, and had the business gross eligibility requirements not been so strict, uptake on the program might have been higher, he added.  

Landlords who helped cover their tenants' rents effectively gave up 25 per cent of their revenue per store, "making it even more onerous," Moen said. 

A revamped version of the federal program, under a new name, launched in late November. It cuts out the landlords and allows businesses to apply for relief directly.

Tucker, whose store is now handling orders for coronavirus-themed T-shirts, intends to apply.

"That really does help when it comes down to paying all the bills at the end of the month here," he said.