Half of Canadian businesses can’t make June rent: CFIB

“I don’t want to think about the words we’ll have to find to describe June 1 if governments can’t get their acts together to help businesses at this crucial time.”

Laura Jones Executive VP, Canadian Federation of Independent Business

Half of small businesses will not be able to pay June rent without more government help, a survey has found.

The Canadian Federation of Independent Business recently conducted a survey of its membership of 110,000, with 6,379 of those members responding.

And 55 per cent say rent relief could make the difference between their business surviving COVID-19 or shutting for good.

The survey, taken over the Victoria Day weekend, indicates 67 per cent agree that the Canada Emergency Business Account (CEBA), which provides interest-free loans of up to $40,000 to small businesses and not-for-profits, should be forgivable. Sixtyfive per cent of small businesses also say governments have been too slow in providing rent relief.

On top of that, up to 80% in the arts and recreation sector say that without more financial help, they will shut down permanently. Up to 70 per cent in the hospitality sector won't be able to make June's rent without assistance.

The survey found 22 per cent of small businesses fear eviction, which is most palpable in Newfoundland and Labrador and Alberta.

“We've been asking for rent relief since March. Even when CECRA (Canada Emergency Commercial Rent Assistance) applications become available, we know that program will leave businesses without the help they desperately need,” Laura Jones, CFIB'S executive vicepresident, said.

“The closer we get to June 1, the more stressful things are getting and the more business failures we will see.”

“Expanding the Canada Emergency Business Account to cover many more businesses is a great start and it's urgent this be implemented in time for June 1. We would now like to see government increase the forgivable portion of CEBA which would go a long way to cover the CECRA shortfall.”

The CFIB said it continues to advocate for making the Canada Emergency Commercial Rent Assistance (CECRA) available as quickly as possible, allowing tenants to access the 50 per cent relief when landlords don't intend to apply for the program, and increasing eligibility where currently, only tenants with a 70 per cent revenue drop qualify. The federation also suggests increasing the amount of the CEBA loan and the forgivable portion of the loan, reducing property taxes by a minimum of 25 per cent and protecting commercial tenants, otherwise in good standing with landlords, from eviction during the COVID19 crisis.

“We described April 1 as scary and May 1 as feeling like a nightmare on Main Street,” Jones said. “I don't want to think about the words we'll have to find to describe June 1 if governments can't get their acts together to help businesses at this crucial time. Even with reopening, too many businesses will go down with no rent relief.”

BOMA Canada, an industry association that represents property managers, building owners and suppliers across the country, said he's heard many stories of landlords stepping up during the pandemic slowdown. He confirmed some bigger landlords have provided some form of rent relief to their tenants.

“The vast majorities of landlords recognize they need their tenants to survive and thrive so they can survive and thrive. Every so often, there's a bad apple, we can't control that. But I've seen in general, tons of landlords step up,” said BOMA Canada president Benjamin Shinewald.

The survey is considered accurate plus or minus 1.2 per cent, 19 times out of 20.