Commercial rent relief program opens but businesses say it will help few
Government also is launching free hotline service to help small businesses with financial advice
Commercial landlords can begin applying for a government rent relief program today, but struggling businesses say it will benefit few of them.
The government also announced today a new customized financial advice service to help small businesses recover from the pandemic. The free hotline is meant to help vulnerable businesses with pressing financial needs navigate tax regulations and government supports to plan a path to recovery.
Set up by the federal government in partnership with the Canadian Chamber of Commerce, the business resilience service hotline (1-866-989-1080) will be serviced by 125 business advisers and chartered accountants seven days a week.
The Canada emergency commercial rent assistance (CECRA) program aims to reduce the rent owed by small business tenants by 75 per cent for April, May and June.
Applications are staggered depending on the province where the property owner is located and how many tenants the landlord has; applications started today for property owners in Atlantic Canada, British Columbia, Alberta and Quebec, with 10 tenants or fewer.
Prime Minister Justin Trudeau said one of the biggest problems facing struggling businesses now is paying rent.
"Some are ready to open their doors as soon as they get the green light that it's safe to do so. But for many more, getting back on their feet will be a challenge," he said.
The rent relief plan, funded jointly with the provinces, provides non-repayable loans to commercial property owners to cover 50 per cent of the monthly cost.
The loans will be forgiven if the property owner agrees to cut the rent by at least 75 per cent for those months and promises not to evict the tenant. The small business tenant must cover the remaining portion of the rent, which would be up to 25 per cent.
To qualify, small business tenants must pay less than $50,000 a month in rent. They also must have experienced a revenue decline of at least 70 per cent from pre-COVID-19 levels, or they must have been forced to close down because of pandemic restrictions. Non-profit and charitable organizations are also eligible.
Small Business Minister Mary Ng urged landlords to take advantage of the program to help their tenants.
"This isn't just about doing the right thing. It is also making financial sense for you as a landlord, because if your tenant declares bankruptcy and is evicted, you will lose all the steady stream of income you depend on, and you would face additional costs as you search for the new tenants," she said.
Ng said the money is expected to flow next week.
The NDP say the structure of the program leaves business tenants at the "mercy" of their landlords.
NDP MPs Peter Julian and Gord Johns wrote a letter to Ng and Finance Minister Bill Morneau today asking for changes that would allow tenants to access the subsidy directly.
"Commercial tenants who close their doors due to the advice of a public health authority should not be penalized by absorbing up to 100 per cent of the rent because their landlord refuses to apply for CECRA," the letter reads.
"We are urging the government to immediately look into this loophole so that small business tenants have the option of applying for the CECRA and paying 50 per cent of rent to their landlord. Besides that, we are also calling on the federal government to immediately negotiate with the provinces a nationwide moratorium on evictions so that commercial landlords have to come to the table in negotiations with their tenants."
Businesses fear eviction
The Canadian Federation of Independent Business says many small businesses won't be able to make June rent without more assistance. Through a survey of its members, the organization found that most commercial tenants don't think they will qualify and don't think their landlord will participate.
With many fearing eviction, the CFIB is calling on the government to provide direct access to the government portion of the program.
The Canadian Chamber of Commerce announced Monday it is launching a small business relief fund supported by the software company Salesforce. It will give 62 small businesses $10,000 grants to pay salaries, buy personal protective equipment, replenish materials or adapt business models to deal with COVID-19.
The chamber says the funding will go to the applicants who best demonstrate how the funds will help their businesses, their employees and their communities with economic recovery efforts.
