Limited retroactive pay `unfair', groups say

Rent relief update

OTTAWA • Small business owners already hurting from COVID-19 shutdowns could struggle to stay afloat under the Liberal government’s new rent relief program, industry representatives say, as companies grapple with months of deferred rental payments.

Leading lobby groups including the Canadian Chamber of Commerce (CCC) and the Canadian Federation of Independent Business (CFIB) have been calling on Ottawa to retroactively cover rental costs for business owners, arguing that a failure to cover previous months’ losses would kneecap hardhit industries such as retail, hotels and food services. Many business owners were unable to access the Liberal government’s previous rent subsidy, even as some faced months of government-imposed pandemic lockdowns.

In new legislation tabled by Finance Minister Chrystia Freeland on Monday, federal coffers will retroactively cover small business rent for the month of October.

But industry groups say the single month in back pay doesn’t make up for the structural failure of the Canada Emergency Commercial Rent Assistance (CECRA), the government’s previous rental relief program that went vastly underused ever since it was unveiled by former Finance minister Bill Morneau in April.

Bill C-9, tabled by Freeland on Monday, would introduce the Canada Emergency Rent Subsidy (CERS) to replace the older program.

“CECRA was problematic from the start, and a large number of small businesses have struggled without access to any rent support for months,” said Alla Drigola, director of parliamentary affairs for the Canadian Chamber of Commerce. “We would have liked to see this CERS retroactive to the start of the CECRA program to ensure support is provided to the businesses that need it most.”

Lobby groups on Tuesday said they would press Ottawa for longer retroactive payments as rising cases of COVID-19 trigger a new round of lockdowns in major urban centres in Ontario and Quebec.

Restaurants Canada, which represents 30,000 firms, warned this summer that over half of Canadian eateries could go out of business between September and December as patios close down and as new lockdowns temporarily choke off cash flows.

“Not retroactively fixing rent relief 's original design flaw feels unfair and arbitrary and we will continue to advocate that this be fixed,” said Laura Jones, executive vice-president of the Canadian Federation of Independent Business.

She said the new rent program is “much better” than the previous program, but said it was a “disappointment to business owners” that retroactive payments would be limited to one month.

In a news release on Tuesday, the CFIB warned that new lockdowns are already starting to take hold on businesses. Just 66 per cent of companies that it recently surveyed are completely open, compared with 72 per cent two weeks ago. Just 42 per cent of the companies surveyed are currently fully staffed, compared with 48 per cent two weeks earlier.

Rent, along with labour, is among the biggest costs facing most small businesses, and lobby groups have been in regular negotiations with federal officials on the new rent relief program. Ottawa had to extend the CECRA program in September in order to provide supports to shut-down businesses — a move that was applauded by industry, but that only helped entrepreneurs who had already tapped into the program.

Many were unable to access the benefit, as it required landlords to apply for the income supports rather than business owners themselves. Landlords often opted not to apply for the rental benefits.

The replacement CERS program would instead be accessible directly to business owners, covering up to 65 per cent of rent costs. An additional 25-per-cent coverage will be available to businesses that have been forced into full shutdowns, for a total of 90-per-cent coverage.

The new legislation will also extend the Canada Emergency Wage Subsidy (CEWS) by six months to June 2021.

UNFAIR AND ARBITRARY AND WE WILL CONTINUE TO ADVOCATE.

It expands a separate program for small businesses, the Canada Emergency Business Account (CEBA), to $60,000 per business from $40,000. Under the program, businesses apply for government-backed loans that, if paid back under a certain time frame, allow companies to retain onethird of the value of the borrowed money.

Conservative leader Erin O'Toole on Tuesday called for “additional flexibility” in both the rent subsidy program and wage subsidy program, saying small businesses make up the “backbone” of the broader economy.

He targeted the older structure of the rent subsidy in particular, saying the requirement for landlords to apply for the program left thousands of businesses without support.

“Today there are tens of thousands of businesses in Canada that aren't getting the help they need — at a time when Canada already has the highest unemployment in the G7,” O'Toole said.