VANCOUVER (NEWS 1130) — Gaps are already being pointed out in Ottawa’s new rent subsidy program to help small businesses during the pandemic.
The Canadian Federation of Independent Business is worried landlords have the option of not becoming involved in the new federal rental subsidy program, which opened Monday.
That could mean renters won’t be able to get federal assistance.
The Canada Emergency Commercial Rent Assistance Program will cover 75 per cent of the rent for small businesses. The federal government and provinces are paying half through the benefit, while the landlord is expected to cover 25 percent. The tenant will pay the rest, and can access other programs such as CEBA for additional assistance.
However, CFIB executive vice-president Laura Jones said commercial landlords could decide not to apply, some being hesitant to take on additional debt.
“Many of them have already borrowed against or are taking on mortgages, or they’ve borrowed against their retirement savings or are running up credit cards. Some are borrowing from relatives,” she said.
“The prospect of just saying, ‘OK, I’m just going to borrow more money to pay my June rent,’ in the face of still a fairly uncertain future for some, is not very appealing at all.”
A current CFIB survey asks businesses if they have considered filing for bankruptcy or winding down their operations and Jones said early results show 10 per cent have.
She added one property management company in Vancouver has already told its 200-plus clients that it won’t participate in the new program, instead offering to help them secure their rent through a private equity firm, with a three-per-cent interest rate.
NEWS 1130 has reached out to the property management company in question.
Prime Minister Justin Trudeau said Monday the subsidy is meant to help small businesses get restarted or retain workers.
“It’s a benefit that will provide forgivable loans to landlords so that they can lower rent by 75 per cent for small businesses hit hardest by COVID-19 and will also be available to non-profit and charitable organizations.”
Applications opened Monday for landlords with up to 10 eligible tenants in the Atlantic, B.C., and Alberta. Those in Manitoba, Saskatchewan, Ontario and the territories, with up to 10 eligible tenants, can apply tomorrow.
“Please apply,” Trudeau said.