Small busi­nesses seek rapid rent relief

Evic­tion no­tices have be­gun to roll out for some who missed April rent

The Standard (St. Catharines) - - Busi­ness - IAN BICKIS

Small busi­nesses are hop­ing for promised rent relief from both land­lords and govern­ment as the COVID-19-re­lated shut­down drags on and their bills pile up.

The ur­gency comes as some land­lords have al­ready started is­su­ing evic­tion no­tices for busi­nesses that didn’t pay April rent, while those who were able to pay are stressed about the months to come.

“We don’t want to be closed, we’re forced to be closed ... but we’re still ev­ery sin­gle day rack­ing up costs,” said Barb Bushe, who co-owns the Point of Light gift shop in New­mar­ket.

Prime Min­is­ter Justin Trudeau said Thurs­day his govern­ment is work­ing on a pro­gram to help busi­nesses and com­mer­cial land­lords cover their rents for at least three months. Fur­ther de­tails weren’t im­me­di­ately avail­able since the fed­eral govern­ment will have to co­or­di­nate with prov­inces on the pro­gram.

Land­lords, mean­while, have gen­er­ally of­fered short-term rent de­fer­rals on an ad hoc ba­sis, but Bushe says she wants to see land­lords share more of the bur­den that the man­dated shut­downs have forced on the econ­omy.

“It’s all kind of com­ing down on our backs ... you can’t push the debt down to the bot­tom (group) that have the least liq­uid­ity and not ex­pect other play­ers, mid-level play­ers and large play­ers, to re­ally do their part.”

Bushe said she’s asked her land­lord, Metrus Prop­er­ties, for some level of rent for­give­ness to share the bur­den. The com­pany has so far of­fered a one-month rent de­fer­ral, with in­ter­est of prime plus one per cent on the un­paid rent over the rest of the lease term.

Metrus did not re­spond to a re­quest for com­ment.

Tak­ing a de­fer­ral would mean Bushe takes on fur­ther debt at a time when there’s no clear pic­ture of when the store will open or what the econ­omy will look like when that hap­pens.

“No one imag­ines the econ­omy is go­ing to come roar­ing back,” she said. “And the money that you lose as you’re closed, that money’s lost for your year. It’s very hard to make it up again.”

A re­cently formed cam­paign called Save Small Busi­ness pro­poses that the fed­eral govern­ment would com­pen­sate land­lords for two-thirds of what­ever rent dis­counts they give ten­ants for three months, so if a land­lord cuts a ten­ant’s rent by $5,000 a month then the govern­ment would pay the land­lord $3,300.

The group sug­gests cap­ping the pay­ments at $6,000 a month and only of­fer it to ten­ants with less than $5 mil­lion in an­nual rev­enue.

The coali­tion says that its key cri­te­ria for any pro­gram are that it is rolled out fast, has broad el­i­gi­bil­ity, isn’t based on de­fer­rals or debt, and is na­tional.

CIBC deputy chief econ­o­mist Ben­jamin Tal has also called for di­rect govern­ment sup­port for small busi­nesses to avoid more job losses.

“Some sort of rent so­lu­tion is es­sen­tial to in­crease the ef­fec­tive­ness of other pro­grams and limit the pace of in­crease in the un­em­ploy­ment rate,” he said in a note ear­lier this week.

Tal pro­posed the fed­eral govern­ment fol­low a model put for­ward by the Rental-Hous­ing Providers of On­tario, where ten­ants pay what they can and then the govern­ment pays the rest. The govern­ment then re­coups the pay­ments from ten­ants later on.

“That cost-shar­ing ap­proach toward rent pay­ment would go a long way to ease the fi­nan­cial pres­sure fac­ing com­mer­cial ten­ants,” he said.

While Thurs­day’s an­nounce­ment from fed­eral govern­ment prom­ises more sup­port, its main relief pro­grams so far are a $40,000 in­ter­est-free loan and 75 per cent wage sub­si­dies, though it has also called on land­lords to be ac­com­mo­dat­ing.

“We con­tinue to call on land­lords to ex­er­cise com­pas­sion and re­frain from evic­tions dur­ing this dif­fi­cult time for busi­nesses and all Cana­di­ans,” said Ryan Near­ing, press sec­re­tary to Small Busi­ness Min­is­ter Mary Ng.

The re­sponse so far con­trasts with some other ad­vanced economies such as Aus­tralia, which has put a hold on com­mer­cial evic­tions and man­dated rents be re­duced based on ten­ant’s de­cline in turnover “to en­sure the bur­den is shared be­tween land­lords and ten­ants.”

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