Ottawa still promising but not delivering on new commercial rent relief program

Click to play video: 'Commercial rent subsidy ends without replacement'
Commercial rent subsidy ends without replacement
WATCH: The Canada Emergency Commercial Rent Assistance (CECRA) has expired. The federal government has promised to replace and improve its program to help businesses struggling to pay rent. But as Mike Drolet reports, nothing is being done yet and that's causing anxiety – Sep 30, 2020

For weeks now Ottawa has promised a replacement for its much-maligned rent subsidy program but as the Canada Emergency Commercial Rent Assistance Program (CECRA) comes to an end Sept. 30, nothing has been announced.

“We’re aware of that — I can tell you we’re not going to let them down,” said MP Pablo Rodriguez in Ottawa.

In an email to Global News, a government press secretary added, “we will have more to announce soon.”

Laura Jones of the Canadian Federation of Independent Business says they’ve been waiting on a new plan for months.

“Anxiety is putting it mildly for a lot of business owners,” she says. “Rent is just a huge expense.”

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CECRA was intended to pay a portion of rent for up to six months. The government would assume 50 per cent of rent payments with landlords and tenants each paying 25 per cent.

But almost immediately, the program was criticized for being complicated and difficult to access, with the biggest problem being that tenants couldn’t access the program without their landlords agreeing to it.

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

In a recent survey, the CFIB found that 15 per cent of its members who wanted to access the fund qualified, but their landlord didn’t apply, while 16 per cent didn’t qualify based on revenue, leaving the tenants to pay the full amount themselves.

Larry Issacs of Firkin Pubs in Toronto says his 23 GTA restaurants have relied on a combination of CECRA and/or deals with landlords to remain open.

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The summer patio season was a temporary lifeline, he says, but now that cooler weather has moved in, he’s unsure how they’ll keep up without a new rent program.

“It’s not like we’re asking for something we don’t deserve,” he says. “We haven’t asked to be closed down. We didn’t ask to only be able to do 50 per cent of our occupancy. So (a new rent relief program) is something that should be in place already.

“We have to have programs in place to carry us all the way through to the summer of next year. Without that, the industry is going to collapse, not just Firkin.”

The Parliamentary Budget Office reports that as of Sept. 28, rent assistance has helped more than 120,000 small businesses for a total in excess of $1.68 billion in support. Yet business experts still call it a failure, because that only represents about half of the programs $3-billion total budget.

“They’ve already done three extensions of the program and they’re still being underutilized,” says Ryerson Business Professor Vik Singh.

“So I mean, obviously, the program was not effective in the end. Users did not end up using it the way they should have.”

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Whatever the new program looks like, if it happens at all, Singh says it has to be simplified by going directly to the tenant and business.

The CFIB is asking for that, as well as a way to top up businesses for the months their landlords failed to apply for the program.

But even if all that happens, there are no guarantees businesses will survive.

The Canadian Chamber of Commerce analyzed data provided by Statistics Canada and found that 60 per cent of restaurants are in danger of closing this fall.

“The reality is that the math just stops working for restaurants,” says Harrison Ruess of the Chamber of Commerce.  “No matter how hard you work, no matter how innovative you are, if you’re a business that operates on five-per cent margins but 50 per cent of your business is gone, there’s just no way to make that math work.

The restaurant industry, he says, has a long road to recovery.  Even if COVID-19 numbers start to improve, it will be up to 18 months before restaurants are back to normal.


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