Saskatchewan says Ottawa’s rent relief program is ‘fundamentally flawed,’ more power should go to entrepreneurs

Saskatchewan’s Finance Minister Donna Harpauer says the federal-provincial pandemic rent-relief program for small businesses is “fundamentally flawed” and is asking Ottawa to give money directly to eligible tenants if their landlords refuse to apply.

The Canada Emergency Commercial Rent Assistance (CECRA) program offers landlords forgivable loans worth 50 per cent of their small-business tenants’ rent for April through August – as long as both landlords and tenants split the remaining half. It has faced extensive criticism since being announced in April, in large part because the onus is on property owners to apply.

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That stipulation has managed to frustrate both landlords and tenants alike: Many landlords complain they have to deal with reams of paperwork, while tenants say they feel powerless as they cannot make applications themselves.

A July 29 letter Ms. Harpauer wrote to Finance Minister Bill Morneau says that only 624 of Saskatchewan’s 147,000 small businesses were benefiting from the program two months after it began accepting applications.

“This funding would be more useful if redirected to directly support small businesses,” Ms. Harpauer wrote, adding that in its current form, “the design of the program is fundamentally flawed.”

Landlords are eligible to apply for CECRA on behalf of small-business tenants if a tenant’s monthly rent is less than $50,000, if their gross annual revenue is less than $20-million, and if revenue has fallen by at least 70 per cent during the pandemic.

Ms. Harpauer proposed that if landlords chose not to apply for eligible tenants, tenants should be able to access the equivalent benefit from the government – half their rent – directly.

“This component of the program could be administered directly by the provinces and territories,” she wrote.

Many small businesses and several lobby groups including the Canadian Federation of Independent Business (CFIB) have been pushing Ottawa to revamp the rent program since shortly after it was introduced. CFIB chief executive officer Dan Kelly shared a copy of the letter on Twitter on Wednesday after a virtual meeting with Ms. Harpauer.

“Now that Saskatchewan is offering to [handle a tenant-first rent program], I’m hoping other provinces will also put pressure on the feds to do the same,” Mr. Kelly said in an interview.

The federal finance ministry said at the end of July that 63,000 small businesses had been approved for CECRA. That represents just 16 per cent of businesses that should be eligible, according to the CFIB.

Ms. Harpauer’s office confirmed it had sent the letter to Mr. Morneau, but said the Saskatchewan government had not yet received a response.

Maéva Proteau, a spokesperson for Mr. Morneau, said in an e-mail: “We encourage property owners to work with their tenants to take advantage of the program. As the economy safely reopens, we continue to review our suite of programs to best support businesses through these uncertain times.”

The CECRA program has faced further criticism over delays, inaccurate information and confusing loopholes. Governments and the Canada Mortgage and Housing Corp., which oversees the program, have also needed to clarify and change eligibility requirements since its announcement, after media outlets pointed out inconsistencies and roadblocks for entrepreneurs.

Asked about Saskatchewan’s proposal late Wednesday, several other provinces were hesitant to comment before studying it further. “We are aware that there are gaps in the CECRA program and we will follow this development closely,” Alberta spokesperson Justin Brattinga said.

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