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The federal government will extend rent relief for entrepreneurs for another month as measures to stop COVID-19′s spread continue to prevent many small businesses from fully reopening.
Ottawa and the provinces announced the Canada Emergency Commercial Rent Assistance (CECRA) program in late April after some small businesses began to permanently shut down because their revenues collapsed due to pandemic restrictions. Applications opened to the public a month later, putting the onus on landlords to apply on behalf of their entrepreneur tenants.
The program now offers to cover half of a small business’s rent from April through August if tenants pay a quarter and landlords take a loss on the final quarter. Uptake has been slow. The federal Finance Ministry said 63,000 small businesses had been approved for CECRA as of July 30 – just 16 per cent of the total businesses that should be eligible, according to the Canadian Federation of Independent Business (CFIB).
Prime Minister Justin Trudeau announced the CECRA extension Friday morning, saying that “we know there are more people to reach.”
The CFIB said this week that it projected one in every seven Canadian small businesses – about 158,000 – is at risk of permanent closure because of the pandemic.
Many entrepreneurs and small business groups, including the CFIB and Save Small Business, have been asking Ottawa and the provinces to overhaul the complicated program. Its structure has frustrated tenants and landlords alike — while entrepreneurs feel powerless at the whim of their property owners, many landlords have been stuck with mountains of unwanted paperwork.
Rent-relief program ‘an utter failure,’ lobby group says as survey points to weak uptake
Both small-business groups have repeatedly lobbied for a simplified application process that puts power back in the hands of entrepreneurs whose revenues have collapsed. Many jurisdictions have been gradually reopening their economies, but they require safety measures such as physical distancing that prevent businesses, especially those that offer food, retail and other in-person services, from operating at full capacity.
“The extension of the CECRA is helpful but more is needed,” said Michael Smith, co-founder of Save Small Business. “A better-designed program will allow for Main Street business owners to apply and receive direct rent support, just like the wage subsidy through the end of the year.”
Small businesses are eligible for CECRA if they pay less than $50,000 a month in rent, bring in less than $20-million in gross annual revenue and have seen revenue drop by at least 70 per cent because of the pandemic.
CECRA has been plagued by delays, misinformation and loopholes. Governments and the Canada Mortgage and Housing Corp., which oversees the program, have had to clarify and change eligibility requirements since CECRA’s announcement, after media outlets pointed out inconsistencies and roadblocks for entrepreneurs.
Entrepreneurs in most government-owned buildings cannot apply. While federal building owners are required to match CECRA’s 75-per-cent relief for tenants, municipal, provincial and territorial landlords do not face the same strict requirements.
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Josh O’Kane