Limited retroactive pay `unfair,' biz groups say
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 the federal government to retroactively cover rental costs for business owners, arguing that a failure to cover previous months' losses would kneecap hard-hit 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 past rental relief program that was vastly underused 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 the feds 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.
The feds had to extend the CECRA program in September in order to provide supports to shutdown businesses — a move that was applauded by industry, but that only helped entrepreneurs who had already tapped into the program.
The new legislation will also extend the Canada Emergency Wage Subsidy (CEWS) by six months to June 2021. 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 one-third of the value of the borrowed money.