The federal government says landlords for only 16,000 of Canada’s nearly 1.2 million small businesses applied for its rent-relief program in the first week, adding fuel to weeks of criticism that the program’s structure is unfair to commercial tenants.
The Globe and Mail first reported details of the Canada Emergency Commercial Rent Assistance (CECRA) program in April. The federal and provincial governments introduced the initiative to relieve rents in April, May and June for small businesses affected by pandemic-related shutdowns.
The program asks entrepreneurs to pay only a quarter of their rent for those months, with their landlord absorbing a quarter of the costs and the rest subsidized by Ottawa and the provinces through forgivable Canada Mortgage and Housing Corp. loans. But the program requires landlords to apply, not tenants. Many small-business owners have said that their landlords have not been interested in the program because it necessitates them to take a financial loss.
Applications for CECRA opened May 25. The Department of Finance shared uptake figures with The Globe on Tuesday, saying that landlords had applied on behalf of 16,000 tenants for rent subsidies worth $65-million. Combined with landlords’ contributions, the department said this would amount to $100-million in relief for the first week’s batch of tenants.
“That’s super, super low,” said Dan Kelly, head of the Canadian Federation of Independent Business, in an interview Tuesday evening. His organization’s most recent polling found that 40 per cent of Canadian small businesses fit the criteria for CECRA eligibility – meaning that at least 400,000 should qualify.
“To have only 16,000 suggests that the worries about the program were absolutely valid," Mr. Kelly said. "Landlords are not inclined to use it.”
Jon Shell, one of the organizers of the lobby group Save Small Business (SSB), said that 16,000 “is a very small number by any measure,” but in line with expectations given recent surveys and stories about landlord interest.
Both organizations said other provinces should follow the precedent set by New Brunswick, Nova Scotia and British Columbia in banning commercial evictions across the province. B.C. only announced its ban on Monday.
CFIB and SSB have been advocating for similar regulations across the country to encourage landlords to apply for CECRA. Otherwise, they warn, landlords could be enticed to find new tenants rather than absorb a quarter of existing tenants’ rent.
“If [B.C.] is followed by other provinces on commercial eviction protection, then this program has a chance,” the CFIB’s Mr. Kelly said.
A spokesperson from Ontario’s Finance Ministry declined to comment on whether the province would soon follow B.C.'s lead, pointing to comments made by the province’s Finance Minister Rod Phillips at a legislative committee earlier this week.
Mr. Phillips said the province would “watch and observe the [CECRA] program now that it is in place. … like many other programs that have been rolled out, we need to observe how they work.”
Some landlords have told CFIB that the CECRA application process is cumbersome, driving some potential applicants away.
The Finance Department said that it expected some of Canada’s larger landlords to apply for the program on behalf of significant numbers of tenants in the coming weeks, and that doing so should improve the country’s application rate.
“CECRA will provide important relief for small businesses that have been hit the hardest and have seen their revenue decrease by 70 per cent,” Finance spokesperson Maéva Proteau said when asked about business groups’ concerns of low application numbers. “We strongly encourage property owners to take advantage of the program.”
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