After more than a month of closures due to COVID-19, small business owners and commercial landlords got welcome news from Prime Minister Justin Trudeau on Friday.
After more than a month of closures due to COVID-19, small business owners and commercial landlords got welcome news from Prime Minister Justin Trudeau on Friday.
Trudeau announced Ottawa had come to an agreement with the provinces and territories on a national commercial rent subsidy plan.
For hairstylist Olivia Braido, owner of Lavish Salon in Sault Ste. Marie, Ont., hearing that was “just a huge, huge relief.”
“For me and a lot of young business owners locally, it’s going to be the thing that makes us, not breaks us.”
The update on the Canada emergency commercial rent assistance (CECRA) program was also welcomed by landlords and small business advocates.
“I think a lot of businesses will actually be saved by this,” said Jon Shell, the co-founder of advocacy group Save Small Business. “It’s the first real action on fixed costs.”
As with other economic measures the government has announced, some people expressed concerns with the program.
The main issues being raised are that tenants who need rent relief can only get help if their landlords join the program, that there’s not a national ban on commercial evictions, that too many businesses will be excluded, and that the program should last longer.
Watch: Trudeau questioned about commercial rent relief
Prime Minister Justin Trudeau spoke to reporters on Friday 2:21
Details on delivering CECRA were finalized just a week after the federal government first announced its intention to provide rent relief for small businesses.
Save Small Business, the Canadian Federation of Independent Business, Restaurants Canada and others have lobbied for rent relief since March.
How CECRA works
To be eligible for CECRA, a small business must have had revenue decline at least 70 per cent from pre-COVID-19 levels or have been forced to close by pandemic restrictions.
Under these conditions, landlords can be approved for rent relief, if they agree not to evict the tenants and cut their rent by 75 per cent for April, May and June.
Then landlords will receive half of the tenant’s rent from the government, paid directly to their mortgage lender.
The tenant is supposed to pay 25 per cent of their rent, though some may succeed in making other arrangements with landlords.
CECRA can be used for commercial rents up to $50,000 a month; non-profit and charitable organizations are also eligible for assistance.
Cost wise, 75 per cent of CECRA’s budget will come from Ottawa, while the provinces and territories make up the balance unless otherwise negotiated.
Rave reviews on some counts
For many small businesses a 75 per cent break on rent will be a lifeline.
Braido wasn’t sure she’d still have a salon after the first wave of the pandemic had passed. Now she has hope. “I’m incredibly grateful that it’s going through and we have a landlord who’s on board,” she said.
