Some landlords not applying for federal rent relief leaves small businesses in the lurch
OTTAWA -- For many businesses, rent is due May 1 and despite many shops being closed for weeks due to COVID-19, some landlords are still asking for full rent.
While government support is available, it's up to the landlords to apply. The concern is whether or not they will.
At Flamingo Boutique in Hintonburg, owner Jo Arbuthnot and her daughter Scarlett are taking pictures of their many wooden carvings, coffee mugs, and jewelry, and uploading the entire store to the web.
Jo's focus is now online sales and staying positive in challenging times. The Flamingo Boutique can only provide online sales for curbside pick-up or delivery. The closure of the storefront has been a massive hit: 95 per cent in lost revenue.
However, 100 per cent of the bills need to be paid, including rent, which is due May 1. Arbuthnot says her landlord is not participating in the government's rent relief program.
On Friday, the federal government announced the implementation of the Canada Emergency Commercial Rent Assistance Program (CECRA), to help small businesses lower rent by 75 per cent.
The program would offer a commercial property owner a forgivable loan covering 50 per cent of the monthly rent for April May and June. The tenant would only provide 25 percent of that monthly rent. Landlords must agree to accept 75 percent of the total rent and tenants must also meet the criteria.
"The tenant has to attest that they have that 70 per cent reduction in revenue," says Laura Jones, executive vice president with the Canadian Federation of Independent Business (CFIB), "but it leaves the tenant feeling powerless with respect to the program because they can't control whether the landlord applies or doesn't apply."
Jones says this program is going to help businesses that have been fully closed and haven't been able to pick up any additional revenue, but there are many businesses that have been working to stay afloat and are still below the revenue loss threshold.
"When the applications are available mid-May, the money is going to take some time to flow," Jones says. "It seems reasonable to provide some eviction protection for them and most provinces haven't stepped up to do that, despite that ask being out there since before the April rent is due."
Arbuthnot thinks rent relief should be mandatory and enforced. She plans to continue to pay the rent for as long as she can, but money is running out quickly.
"Paying 25 per cent rent would help out massively," she says. "The landlords having to take 75 per cent instead of 100 per cent will obviously affect them, but it's not the same loss the small businesses are having to take."