Commercial tenants catch a break on rent
Bill 23 bans evictions due to strain of COVID-19 until end of summer
EDMONTON Commercial tenants in Alberta cannot be evicted if they don’t pay their rent due to COVID-19 between now and the end of August.
Bill 23, the Commercial Tenancies Protection Act was tabled in the legislative assembly on Tuesday. Now that it has received first reading, it prevents commercial tenants who have lost more than 25 per cent of their revenue due to COVID -19, been forced to close due to public health orders, or those who would qualify for federal support but their landlords won’t sign up, from being evicted for non-payment of rent between now and Aug. 31. Any late fees, penalties or rent increases imposed on an eligible commercial tenant by their landlords between March 17 — when the province declared a public health emergency — and Aug. 31 must be reimbursed, but the law does not reverse any evictions or lease terminations that have already taken place.
Economic Development, Trade and Tourism Minister Tanya Fir said Tuesday before the bill was tabled that Alberta industries and businesses have been hit hard by the pandemic.
“In fact, even as we move though the phases of relaunch, many business owners are still wondering whether they are in a position to reopen and if they will be able to recover,” she said.
The Alberta law offers no rent reductions. It requires that landlords and tenants come up with a plan to repay the rent in full but does not define specific terms of what these deals have to look like.
“It’s important to emphasize that both commercial landlords and their tenants are facing unprecedented circumstances. Landlords are also struggling,” Fir said.
“So we have to also help ensure that landlords don’t miss out on deferred rent by requiring that landlords and tenants work together to develop a rent payment plan for missed payments.”
NDP Service Alberta critic Jon Carson said the bill is “pushing the pain down the road” for tenants and landlords who in some cases are already struggling to come up with a payment plan.
“If the landlord doesn’t have money and the tenant doesn’t have money, well, creating a piece of legislation that says we’ll give you some more time to pay that money back is not really solving the problem ... in three months from now these companies are not going to be in any better position,” he said.
In a news release Tuesday, the Canadian Federation of Independent Business said that while 57 per cent of Alberta businesses are open, only 21 per cent are making their usual sales for this time of year.
In May, the NDP called for the government to provide grants for businesses including $5,000 for physical improvements to comply with public health orders and between $5,000 and $10,000 for startup costs related to relaunching. The opposition has also called for a freeze on business insurance premiums.
The Alberta law comes after the federal government began offering the Canada Emergency Commercial Rent Assistance (CECRA) program in April. The federal program offers forgivable loans to small businesses that offer a minimum of a 75 per cent rent reduction for the months of April, May and June 2020. Half of the rent is covered by the federal and provincial governments. The landlords and tenants foot 25 per cent each.
The Alberta government contributed $67.2 million to the program. Fir said some Alberta businesses are struggling even though they don’t meet the 70 per cent reduction in revenue required to qualify for the federal program.
“Landlords are finding the program difficult to navigate and many commercial tenants have told us that their landlords don’t plan to apply,” Fir said. “We’re hearing that some landlords are struggling to work together to develop an alternative payment plan.”
Carson called the program “broken” and said the eligibility criteria was too narrow with no incentives for landlords to apply.
If an Alberta landlord chooses not to follow the new legislation, the only recourse for a tenant is to go to court.
The minister acknowledged that evictions could begin again after Aug. 31 but said she believed most landlords and tenants want to come up with a plan.
“Our hope and our belief is that landlords and tenants are going to work together to come up with fair and reasonable payment plans because it’s in the best interest of both of them to make it work. A tenant doesn’t want to be evicted and I don’t believe landlords want to evict,” Fir said.