Skip to main content
Canada’s most-awarded newsroom for a reason
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
Canada’s most-awarded newsroom for a reason
$1.99
per week
for 24 weeks
// //

Since the pandemic started, HBC has been battling landlords across Canada and the United States, refusing to pay rent at certain locations after government restrictions forced malls and non-essential retail to close their doors.

Yader Guzman/The Globe and Mail

An Ontario court has ordered Hudson’s Bay Co. to pay its outstanding rent at a mall location in Richmond Hill, marking another blow to the department store chain that withheld lease payments because of the pandemic’s retail closings.

In a Thursday ruling, Ontario Superior Court Justice Cory Gilmore said HBC was a model tenant until the pandemic hit, but said the retailer’s decision to withhold rent from landlord Oxford Properties Group was a grave breach of its lease terms. HBC is “not entitled to any abatement or reduction of rent,” Justice Gilmore said.

Since the pandemic started, HBC has been battling landlords across Canada and the United States, refusing to pay rent at certain locations after government restrictions forced malls and non-essential retail to close their doors. The owner of the department store chain has been trying to reinvent itself amid a global shift to e-commerce, turning its Saks Fifth Avenue and Saks Off 5th digital operations into separate businesses. The company recently sold minority stakes in those digital operations, using the proceeds to improve its e-commerce offerings and to strengthen its balance sheet.

Story continues below advertisement

Thursday’s ruling comes one week after the Supreme Court of British Columbia ordered HBC to pay all the rent in arrears for the store at the Cherry Lane Shopping Centre in Penticton.

Justice Gilmore said the Ontario case raised the question of whether the court should intervene and change the lease to allow relief from forfeiture or rental payments in the face of the health crisis, or whether the court should uphold the terms of the lease.

In the end, Justice Gilmore said the court would not “rewrite private contracts between the parties even in the face of unforeseen and disastrous circumstances,” but also said Oxford should not lock HBC out of its Hillcrest Mall location for missed payments.

“It does not benefit either HBC or the landlord to disallow re-entry,” she said in the order, given that HBC is the major tenant that is supposed to attract shoppers to the mall. “During this period of gradual reopening, Hillcrest needs model tenants, not more vacancies.”

Justice Gilmore ordered HBC to immediately repay Oxford for the first seven months of unpaid rent and said the remaining eight months of unpaid rent had to be paid by January, 2022.

Until June, HBC has been paying 50 per cent of its rent as part of a previous court order that allowed HBC to remain at Hillcrest after it had withheld full rental payments for months.

Thursday’s ruling provided a schedule of monthly lease payments, increasing the amounts in co-ordination with the province’s reopening. It said by March, 2022, HBC will have had to made Oxford whole. The order does not provide the total amount rent owed. Oxford would not provide the amount.

Story continues below advertisement

In an e-mailed statement on Friday, HBC spokesperson Tiffany Bourré said that the company’s leadership is disappointed in the decision.

“This is another example of non-essential retail bearing the brunt of government lockdowns in Ontario and an approach that is arbitrarily creating winners and losers,” the statement said. “HBC maintains that retailers and landlords should equitably share the burden of the pandemic, and we are reviewing all our available options from that perspective.”

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the authors of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies