cecra rent

More than 80% of landlords in Canada not expected to enrol in CECRA rent relief program

Very few industries in Canada have been left untouched by the pandemic and consequent economic fallout, and small businesses owners are feeling the impact more drastically than others.

One of the many multi-billion-dollar aid packages that Prime Minister Justin Trudeau has recently rolled out to help Canadians during this crisis is the Canada Emergency Commercial Rent Assistance (CECRA) program aimed at small businesses.

It's intended to complement the funds from the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Business Account (CEBA), which many independents said is not enough to keep them afloat.

But the CECRA, through which the federal government will subsidize half of commercial rent payments via a forgivable loan to property owners — if they agree to reduce rent for their small business tenants by 75 per cent — has its own share of issues.

Though many small businesses may meet the criteria for the program,  they have no control over whether their landlord actually applies — and most say their landlord probably won't.

In a survey conducted by a group of grassroots organizations representing more than 39,000 small businesses across the country, only 19 per cent of business owners said their landlord is likely to enrol in the program as it stands now, though 54 per cent said that the rent break through CECRA would save them from failure.

A second poll of thousands of local businesses, this one from the Canadian Federation of Independent Business (CFIB), indicates that only 10 per cent of Canadian small businesses qualify for CECRA and think their landlord will actually participate.

Another 40 per cent are unsure if their landlord will participate, 9 per cent know for certain their landlord will not participate, and another 36 per cent are ineligible because they haven't quite lost 70 per cent of their pre-COVID-19 revenue yet, which is one of the criteria for the benefit.

Most were unable to make May rent due to the ongoing coronavirus situation.

"In theory the program is good as it covers a substantial fraction of the rent and the costs are shared, but in practice it is quickly turning into a mess. Tenants are powerless if their landlords don’t apply," CFIB said in a statement this week, adding that many landlords are confused about their eligibility and may not be applying for this reason.

As a result, groups representing indie businesses are advocating for more funding in the form of grants, and/or mandatory enrolment in CECRA for those that qualify.

Also, a moratorium on commercial evictions, something that was enacted for residential tenants back in March.

"We are failing, and we need your help," grassroots groups including Save Small Business, which has also launched a petition for the cause, said in an open letter to the First Ministers of Canada.

"The federal government has funded a flawed program, but it could save thousands of businesses and millions of jobs if you act quickly to save it... It could ensure that we, your local community businesses, are there to help our economy recover from this crisis."

Many have noted the difficult spot that both commercial tenants and their landlords have been put it at this time, saying that communication between both parties, as well as with the federal government, is key.

"CECRA isn’t working for lots of businesses, so we continue to urge tenants and landlords to talk to each other and work out something reasonable and fair to help as many businesses survive this storm as possible," CFIB says. "In the meantime we will continue to advocate for simple programs that allow money to flow straight to the tenant."

Lead photo by

Fareen Karim

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