Rent relief needed now for businesses, organizations say
New Broadview-Danforth survey warns many small businesses won’t survive much longer
Business organizations are urging governments to quickly come up with a plan to ensure businesses can make their next rent payments on May 1.
Advocates say a welcome first step came last week when the federal government announced the Canada Emergency Commercial Rent Assistance program for small businesses struggling to pay the rent due to the COVID-19 pandemic.
According to the government of Canada’s website, the program will provide loans and/or forgivable loans to commercial property owners who in turn lower or agree to forgo the rent for April (retroactively), May and June.
But the program will require provincial co-operation and the details will need to be made available very soon, business organizations say.
“People are making some of the toughest decisions of their lives and they need clarity,” said Rocco Rossi, president and CEO of the Ontario Chamber of Commerce.
There have also been calls from groups including the Chamber of Commerce to provide grants to businesses to help with their rental obligations.
Some have called on the provincial government to adopt a plan similar to what the Ontario NDP has proposed: a 75 per cent rent subsidy (up to $10,000) for three months to small- and mediumsized businesses, as well as charities and non-profits.
The calls come amid a new survey showing 61 per cent of Toronto small
businesses will close within three months unless further rent relief programs are implemented.
Five hundred and sixty-one businesses and 137 landlords took part in the survey, which was developed by the Broadview Danforth Business Improvement Area.
“It’s overwhelming that rent is a really big part of expenses,” said BIA board member Philip Kocev.
The ultimate test for any rent relief program will be whether it helps hard-hit businesses survive, said Laura Jones, executive vice-president and chief strategic officer of the Canadian Federation of Independent Business.
“It’s got to be simple and deliver. And it’s got to be relief. It can’t be more deferrals,” she said. “If there’s nothing in place by May 1 it will be a nightmare on Main Street.”
A CFIB survey of its members across the country found strong support this week for the federal government’s announcement, with 91 per cent saying that for rent assistance to be meaningful it must include grants or rent forgiveness, and not just loans and deferrals.
The survey also found 58 per cent of businesses said they would not be able to pay May rent in full without further assistance, up from 25 per cent for April.
Some commercial property owners recognize that their long-term economic interests are tied to their tenants’ survival and they would likely be open to lowering the rent in exchange for federal assistance, said Karl Littler, senior vicepresident of public affairs at the
Retail Council of Canada.
There would also have to be a commitment from the landlord not to try to recoup the forgone portion of the rent some time later, he said.
And while commercial tenants could still technically be evicted for failing to pay their rent, Littler said that isn’t too much of a concern at the moment.
“What is the landlord going to do? Rent to a new tenant? Which is who?” he said. “I think a lot of the threats are more bluster than reality right now.”