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.
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.
Today is May 1st & marks the 2nd monthly rent payment since COVID-19. While federal and provincial programs/supports are in place for businesses, many are still ineligible and at risk of permanent closure. More changes needed now to expand CECRA program. @jjhorgan @JustinTrudeau pic.twitter.com/vZRhNgdt2D— BIABC (@BusinessAreasBC) May 1, 2020
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.
I have had so many small business owners on the brink of financial collapse call me in desperation because their commercial landlord simply refused to participate in the CECRA https://t.co/cm48OeCANs— Avnish Nanda (@avnishnanda) May 1, 2020
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.
Sadly, most of us who have (or have had) commercial landlords are unsurprised by this. CECRA participation needs to be mandatory. I currently have a good landlord and his response to my request that he apply was not a yes, it was "I will read up on this in the coming days".— Elsbeth Vaino, CSCS (@CustomStrength) May 1, 2020
"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.
I know that this issue is impacting a number of small businesses in #MississaugaErinMills. The #CECRA will help a lot of businesses across Canada and I’m glad that our government is working to address these concerns about eligibility. https://t.co/LSm17HFStl— Iqra Khalid 🇨🇦 (@iamIqraKhalid) May 1, 2020
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.
"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."
CECRA could save a lot of businesses IF -- and it’s a big IF -- landlords agree to the deal. Demand your provincial leaders take action to get landlords to the table! #RentSupportNow https://t.co/XzoV6qJ3iX— 50 Ft Queenie (@FiftyFtQueenie) May 2, 2020
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."
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