Ontario will ban commercial evictions of some small businesses from June through August, after months of pressure from entrepreneurs who’ve been unable to pay rent because of COVID-19 pandemic shutdowns.
Canada’s most populous province joins British Columbia, Alberta, Quebec and Nova Scotia in announcing this kind of eviction ban, though policies in different provinces vary in execution and timelines. B.C.'s ban only runs to the end of June, for example, while Quebec’s will end Aug. 1, with the possibility of further extensions.
The Ontario ban will apply to small businesses that are eligible for the Canada Emergency Commercial Rent Assistance (CECRA) program. They must have experienced at least a 70-per-cent decline in revenue because of the pandemic, pay less than $50,000 in monthly rent and have less than $20-million in gross annual revenue. The new policy would also reverse any evictions that happened on or after June 3, and make it illegal to evict a CECRA-qualifying tenant in Ontario until Aug. 31.
The federal government announced CECRA in late April to help small businesses with one of their biggest costs. The program requires tenants to pay just a quarter of their rent for April, May and June, while the landlord takes a one-quarter loss in exchange for half the rent to be covered by a forgivable Canada Mortgage and Housing Corp. loan.
Quebec said Monday that it would also cut the costs landlords absorb in half, to 12.5 per cent. The province will spend an additional $140-million to do so in an effort to encourage them to participate.
Many landlords, who are responsible to apply for CECRA on behalf of tenants, have been reluctant to take a loss with the program. It also has a complicated application process.
So far, few landlords have applied. Just 16,000 applications were filed in the first week after the program opened May 25. There are 1.2 million small and medium businesses in Canada.
Small-business advocacy groups had pushed for eviction bans since the opening, but Mr. Ford held back from putting one in place in Ontario before seeing application numbers last week. He said landlords had applied on behalf of just 7,000 of the province’s 418,000 small businesses, which made him frustrated with many property owners.
“I was clear with commercial landlords: You have to be fair and help out everyone,” Mr. Ford said at a news conference Monday. “But we still heard about some landlords who just didn’t get the message.”
CECRA has had one of the slowest and messiest rollouts of Ottawa’s pandemic relief packages. Both tenants and landlords have expressed concern about its long delay. In Ontario, incorrect eligibility details on the government’s own website confused many landlords and led to conflicting advice from law firms and accountancies.
Even so, a growing number of small businesses are receiving eviction notices.
Jon Shell of Save Small Business, a group that’s advocated for eviction bans across Canada since CECRA was announced, welcomed Ontario’s move. “It’s been clear for months that this was a necessary step,” Mr. Shell said. “But now I just feel really awful for all the people who’ve lost their business and suffered severe stress over the last few months.”
Dan Kelly, CEO of the Canadian Federation of Independent Business, said Ontario’s decision was the right move. “Tenants right now are entirely powerless,” he said. “This will give them at least a little but more of a bargaining chip.
Pam’s Roti Shop on Bloor Street in Toronto said it faced a potential eviction because of the pandemic after its landlord did not apply for CECRA. The restaurant had put out a public call for help in recent days in order to survive, and wound up crowdfunding donations to cover rent costs.
“I was very upset,” said owner Pam Singh, 71, who still cooks daily and has been in the neighbourhood for decades. She hopes more landlords will understand their tenants’ struggles. “Have a heart,” she said.
Her sister and administrator, Hassena Baksh, said that the eviction ban comes as a great relief for Ontario’s thousands of entrepreneurs. “Small businesses can’t [always] fight for their rights, because many of them are run by immigrants from all over the world,” Ms. Baksh said. “We’re in a pandemic, in an unprecedented time in history.”
The restaurant’s landlord did not respond to a request for comment.
Because the province shut down many businesses in mid-March, some entrepreneurs have already been evicted. “It seems weird to act three months later,” says Andrew Williamson, whose Toronto storefront art gallery, Black Cat Artspace, was evicted in early May. For him, the Monday’s news was too little, too late. “Why now?" he asks.
Realpac, an industry group that represents the largest property owners in Canada, said it did not like how some provincial premiers have slagged landlords as bad actors. Realpac members such as Oxford Properties and RioCan REIT have said they will participate in CECRA, and have offered their own in-house rent relief programs for their hardest hit tenants.
“We all got tarred with the bad landlord brush,” said Realpac chief executive Michael Brooks. “Premier Ford was careful to say that there were some good landlords, he was careful to segment that landlord market, which we appreciate,” he said.
In May, Realpac had sent the Ford government a letter saying that a moratorium on evictions would be ill-advised, as tenants could try to take advantage of landlords and withhold rent. He cited Staples Canada and Starbucks as examples from the early days of the pandemic.
Mr. Brooks repeated that the temporary moratorium was bad policy, but said he accepts it given that it is limited to small businesses eligible for CECRA.
With files from Laura Stone and Nicolas Van Praet
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