KENNEY SUGGESTS BAN ON EVICTIONS BY ‘BRAIN-DEAD’ COMMERCIAL LANDLORDS
Premier Jason Kenney says it makes no sense for commercial landlords to kick out good tenants during a pandemic, but the province appears poised to temporarily stop such evictions.
Facing pressure from a coalition of business groups and opposition MLAS, Kenney says the province could adopt British Columbia’s move this week that would block landlords from evicting business tenants if the landlords don’t apply for a new federal initiative that offers rent relief.
“A commercial landlord would have to be darn-near brain-dead to evict a viable commercial tenant during this crisis because there is just nobody stepping up to fill empty storefronts,” Kenney told reporters Wednesday.
“We are looking at options similar to the one adopted by British Columbia ... I would just say, stay tuned for an announcement in the near future.”
The Canada Emergency Commercial Rent Assistance program is designed to provide rent assistance for small businesses that have seen revenues crumble because of the pandemic.
The federal and provincial governments will pick up half of the monthly rent for April, May and June for eligible businesses, while the landlord would cover 25 per cent.
That would leave the tenant paying 25 per cent of their normal rent.
In order to be eligible, the tenant must have seen revenues drop by 70 per cent during those three months. It’s a high bar to meet, but one many restaurants, gyms and tourism-related businesses would likely clear, as they’ve closed their doors because of public health orders.
However, the landlord must first apply, and many haven’t yet.
The federal Finance Department reported Thursday that landlords across the country have submitted applications for about 26,000 tenants to access $90 million in subsidies.
But that doesn’t seem like a significant response. The Alberta government alone has pledged $67 million for its contribution to the program, and that’s from only one province.
In a joint letter to Kenney last week, the Alberta Chambers of Commerce, Restaurants Canada, Canadian Federation of Independent Business and Retail Council of Canada called on the province to adopt a temporary moratorium on evictions for commercial tenants in good standing with their landlord prior to the pandemic.
“We already know from our members that many landlords will not apply,” the letter states. “Without your immediate assistance, more businesses will be forced to close.”
Dallas Southcott, co-owner of the Chocolate Lab in Calgary, said one of his landlords isn’t prepared to apply for the program and his business already plans to move at the end of this month once the lease expires.
He sees merit in a prohibition on evictions, such as the one adopted by B.C.
“I think that’s smart,” he said. “Landlords working with the tenants some more — to be a twoway partnership in this — would be helpful for everybody.”
The Canadian Federation of Independent Business, which has been critical of the flaws in the rent relief programs, embraced the premier’s comments but said action is needed.
According to a survey it conducted last month, 44 per cent of Alberta small businesses were not going to be able to pay their June rent without assistance and could face being ousted.
“Encouraging landlords to participate in the program and not evict their tenants is not enough,” said Annie Dormuth, CFIB director of provincial affairs.
The province’s own online feedback survey that began last month found of 326 businesses that completed the questionnaire, 36 per cent indicated their landlords were not granting rent deferral or alternative payment plans.
NDP Leader Rachel Notley, who has been calling for a prohibition on small businesses being evicted, said the measure would bring landlords and tenants to the table to find solutions on providing help with rent and keep small businesses operating.
“We so desperately need our small businesses to be able to pick up and get going as restrictions are lifted,” she said. “And they can’t do that if they are kicked out of their place of business.”
Not everyone sees a moratorium on evictions as the answer, however.
Pierre Marleau, owner of Orange Frog Productions, which operates in the entertainment sector providing lighting services, said his landlord appears interested in applying for rent assistance if he extends his lease.
He’s not a fan of preventing landlords from evicting tenants, saying it doesn’t address the underlying issue: government assistance should be given to the small businesses.
“I would rather get 50 per cent from the government than playing all these weird games to try to get the landlord to give us 25 per cent. It just doesn’t work,” Marleau said.
Commercial landlords note they are facing their own financial pressures, from mortgage payments and property taxes to utility bills that haven’t stopped because of the virus outbreak.
Some have already provided relief before the federal program was developed.
“There are so many different types of tenants, it becomes problematic to take really broad approaches to this industry,” said Lloyd Suchet, executive director of BOMA Calgary, which represents commercial building owners and managers.
Alykhan Sunderji of Park Avenue Furniture, which operates a mattress manufacturing business in Calgary’s Foothills Industrial Park, sees the arguments from both sides, as he also has several tenants in his building.
He has already applied for commercial rent relief for two tenants. The Calgary business operator calls the eviction ban a “double-edged sword,” saying he’d support the measure if it comes with conditions, such as timelines on how long it’s in place and who would be eligible for it.
“There has to be a viable business there. If this was a business that, as a tenant, was losing money hand over fist for months before the COVID crisis, then you would have to have some flexibility for the landlord,” Sunderji said. “Landlords have challenges, as do tenants. But every situation is unique.”
Chris Varcoe is a Calgary Herald columnist.