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PBO predicts $520M price tag for feds’ coronavirus commercial rent relief program

Click to play video: 'Coronavirus outbreak: Trudeau says applications open now for rent relief' Coronavirus outbreak: Trudeau says applications open now for rent relief
Speaking to reporters outside Rideau Cottage in Ottawa on Monday morning, Prime Minister of Canada Justin Trudeau asked all commercial landlords who are eligible to apply for rent relief from the federal government, with applications open as of 8:00 am that morning. – May 25, 2020

Parliament’s spending watchdog estimates a program aimed at giving small businesses a break on their rents could cost the federal treasury $520 million this fiscal year.

Budget officer Yves Giroux’s report this morning puts caveats on that estimate, owing in particular to the lack of clear precedent for this kind of program.

READ MORE: Canada likely now has deficit of $260 billion due to coronavirus pandemic, PBO says

His report says that means the assumptions about industry eligibility and uptake by landlords “rely heavily on judgment.”

The program offers forgivable loans to cover half of monthly rents in April, May and June, as long as landlords drop rents by at least 75 per cent over the same period for eligible small businesses.

Property owners with up to 10 eligible tenants were able to apply Monday and Tuesday,

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All other landlords can apply over the remainder of the week.

Click to play video: 'New federal program to help with business rents draws criticism' New federal program to help with business rents draws criticism
New federal program to help with business rents draws criticism – May 20, 2020

Prime Minister Justin Trudeau has made multiple pleas for property owners to apply for the federal loans, which are part of the government’s package of COVID-19 aid.

Direct federal spending has now topped at least $151 billion, but Giroux has warned that some programs may end up costing more this year than the Liberals have forecast.

Click to play video: 'Coronavirus outbreak: Trudeau discusses commercial rent relief for small-and mid-sized 
businesses' Coronavirus outbreak: Trudeau discusses commercial rent relief for small-and mid-sized businesses
Coronavirus outbreak: Trudeau discusses commercial rent relief for small-and mid-sized businesses – May 20, 2020

For example, the budget office has estimated the federal wage subsidy program to cost $76 billion, just higher than the $73 billion the government has budgeted.

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Federal figures published this morning show there have been 181,883 unique applicants approved for the aid, which covers 75 per cent of wages up to a maximum of $847 per week for each eligible employee.

The total value of benefits paid now stands at $7.9 billion.

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