Only three provincial governments have provided details on how they will facilitate the federal government’s commercial rent relief program to small businesses impacted by the COVID-19 pandemic.
Only four provincial governments have released details on how they will facilitate the federal rent relief program.
The Canada Emergency Commercial Rent Assistance (CECRA) program, announced this month by the federal government, will lower rent by 75 percent for small businesses that have been affected by COVID-19. Provinces and territories have agreed to share the costs of the CECRA, which is expected to be operational by mid-May, however many have yet to provide details on how they will implement the program.
Small businesses in British Columbia can expect to receive a total of $300 million in federal and provincial relief from CECRA, with BC contributing an estimated $80 million.
The Ontario government is committing $241 million through the CECRA, and will deliver more than $900 million to small businesses and their landlords along with the federal government.
The Alberta government said it expects to commit up to $67 million through the CECRA, while the “remaining and majority” of costs will be covered by the federal government.
Although little information has been widely shared by the provinces and territories about how they will implement the CECRA, many are enacting their own rent relief measures.
Nova Scotia, for example, has launched a rent deferral support program, which offers a 100 percent provincial compensation on rent suspended by landlords for commercial tenants, during the months of April, May, and June. Other provinces and territories, such as Yukon, Quebec, and Saskatchewan, have suspended all eviction hearings. Quebec is also providing a $1,500 loan to renters whose revenues have decreased due to COVID-19.
The CECRA will allow small businesses to pay just 25 percent of their monthly rent, with governments and property owners absorbing the remaining 75 percent. Businesses that pay $50,000 or less per month in rent and have temporarily ceased operations or experienced at least a 70 percent drop in pre-COVID-19 revenues will be eligible for the program. Property owners will need to opt into the CERCA in order for businesses to be able to benefit from the program.
Property owners can still apply for assistance once the three-month period has ended if they can prove eligibility during those months. Property owners must also refund amounts paid by the small business tenant for the period. The deadline to apply for the CECRA is August 31.
A new study shows Canada’s commercial landlords may be disinclined to adopt the new rent assistance measures. Save Small Business, a coalition of about 40,000 Canadian small businesses, released survey findings that showed only one in five small businesses anticipate their landlord to offer them rent relief through the CECRA.
“The [CECRA] is unlikely to succeed without applying more pressure on landlords to sign rent forgiveness agreements with their small business tenants,” Save Small Business said in a statement.
A group of large Canadian retailers and commercial property owners is also petitioning the federal government to implement a different rent relief package, that would let major landlords reduce rent by one-third for their tenants. This new program is meant to support larger retailers that do not qualify for the CECRA.
According to The Globe and Mail, the group is proposing that landlords provide a reduction on one-third of the rent for 10 months to retail tenants whose revenues have fallen due to the pandemic.
The need for rent assistance in Canada has remained high for small businesses throughout the COVID-19 pandemic. A Colliers Canada report found tenants whose businesses were completely closed were about three times more likely to request rent relief than tenants who were partially open, open remotely, or open. That same report found that small business tenants were more than twice as likely to request rent relief than regional, national, or international tenants.
Image source Unsplash. Photo by Tierra Mallorca.