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Ottawa extends COVID-19-related commercial rent subsidies by a month

FILE -- Storefronts in Ottawa's Glebe neighbourhood are reflected in a sign indicating the temporary closure of a business to prevent the spread of COVID-19, on Tuesday, March 24, 2020. THE CANADIAN PRESS/Justin Tang
Summary

Only about 10 per cent of money allocated to the Canada Emergency Commercial Rent Assistance program has been spent

Tenants say their landlords have refused to participate in the program

OTTAWA (NEWS 1130) — The government announced on Friday that the Canada Emergency Commercial Rent Assistance program has been extended once again, and will now cover a portion of August’s rent for businesses that qualify.

To get the rent assistance, businesses will not have to prove a 70 per cent decline in sales for July or August. They will, however, have to show a 70 per cent revenue shortfall that qualified them for CECRA in April, May and June.

The program’s low adoption rate was previously criticized by the Canadian Federation of Independent Business, which cited the onus on landlords and stringent requirements.

“Your landlord has to be eligible, your landlord has to be willing to apply, and then in addition to that, you have to fit within the parameters as a business,” says Greg Wilson, director of government relations for the BC chapter of the Retail Council of Canada.

Wilson says retailers came up against two scenarios — landlords not willing to participate in the program, or landlords that were ineligible, such as municipalities. Under the program, landlords have to agree to reduce rents by at least 75 per cent. They also had to agree they were not going to recover forgiven rents, and not to evict tenants.

Eligible tenants, in the meantime, are those that are not paying more than $50,000 in rent per month, which shut out a lot of retailers, says Wilson, who believes that eligibility requirement should have been adjusted to reflect higher rents in parts of Canada.

“In large urban areas such as downtown Vancouver where rents can be quite expensive, the limit should have been increased.”

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The council agrees with the Canadian Federation of Independent Business that the fact only a fraction of the money offered for the program was actually spent goes to show it wasn’t as useful as the government had hoped.

“I think the government thought more landlords would apply,” says Wilson. “Less than 10 per cent of the funding was actually spent. That would indicate that the pickup from CECRA wasn’t very good.”

On Friday, the government said that thousands of new applications are being regularly submitted, “demonstrating a strong interest in CECRA from property owners and small business tenants.”

About $613 million has been paid out to 63,000 tenants as of Thursday, the government said.

Earlier this week, the Canadian Federation of Business released an open letter, telling both provincial and federal finance ministers that the program is in need of reform. The federation says the bar to qualify for rent relief has proven to be too high for businesses, and both governments need to provide rent relief directly to tenants.