Small businesses say they need rent relief - and quickly

The money that normally flows into Gordon Bohlmann’s small physiotherapy business in south Vancouver stopped dead last week, after he became one of the many businesses forced to close because of the COVID-19 pandemic.

Now, he’s facing a $10,000 rent payment in less than a week with no money to pay it. He can’t reach his landlord in person and he’s heard no word from any level of government about any help for people like him – small, independent business owners that can no longer operate because of increasingly restrictive policies aimed at reducing person-to-person contact.

“They’re going to have to provide some relief and it has to be done quickly,” said Mr. Bohlmann, who has operated Marpole Physiotherapy for 20 years. “Our bank account just doesn’t have the money.”

He is one of thousands of small and medium-sized business owners across the country who feel as though they are invisible, as governments scramble to provide help for renters, employees and, it seems at times, almost everyone else.

In Western Canada, businesses are facing different variations of a similar problem, depending on where they are located. Increasing property taxes and a tight real estate market were already squeezing businesses in the Vancouver region, while in Alberta, a stubbornly sluggish economy had left the balance sheets of many companies and landlords in dire circumstances even before the latest turmoil from the pandemic.

“They just don’t feel heard. It’s now Day 10 and the overall sentiment is that … we need to reduce their fixed costs,” said Sandip Lalli, chief executive officer of the Calgary Chamber of Commerce. “It’s great we’re stabilizing others and there’s one-to-one help. But companies are saying, ‘I need my business stabilized so that I can build in resilience and gainfully employ people again.’”

Business advocates are calling for government help while also asking landlords to work with their tenants to offer flexibility, through measures such as reducing or deferring rent payments.

“B.C. came out with a renters’ program, but that’s just for residences; small businesses are struggling, too," said Muriel Protzer, a policy analyst with the B.C. branch of the Canadian Federation of Independent Business.

"We were hoping to see commercial and industrial tenants in that."

Neil Wyles, who runs the Mount Pleasant business improvement association, said private landlords and tenants need to work together to negotiate some kind of temporary plan.

“If a landlord has a tenant now, that is a bird in the hand that he should keep. I think the reality is that a lot of businesses are not going to weather this. There will be a glut of space after this,” Mr. Wyles said.

Jeff Jamieson, co-owner of the Proof cocktail bar and Donna Mac restaurant in downtown Calgary, said many restaurants are enduring week-to-week. They simply won’t survive if they are forced to pay rent – potentially for months without any revenue coming in.

“I think we’re in the same situation as most: We’re out of dough,” said Mr. Jamieson, who also co-owns the Vine Arts wine and liquor stores, which remain open.

“It’s impossible now with no money in the bank. You’re going to see a lot of closures.”

Mr. Jamieson said he’s been negotiating with his landlords, though with April 1 quickly approaching, they face a tight deadline to figure something out. He said governments could do more to help commercial tenants and their landlords defer rental payments.

“We don’t want to step way from our obligations and we’re not trying to take advantage of a bad situation,” he said.

“It’s simply the fact that if you want these businesses to be here in three or four months so people can get hired back and the rent can keep coming back in, something needs to be done today."

Governments have announced various measures to help businesses and property owners, though none specifically targeted at rental relief.

The federal government has offered wage subsidies for small employers while Ottawa and provincial governments have extended tax filing deadlines. There are low-interest federal loans available to some companies and major banks have announced mortgage payment deferrals in some circumstances.

Local governments, for example in Vancouver and Calgary, have allowed property tax deferrals or are considering it.

In Vancouver, all property taxes, normally due at the beginning of July, have been deferred two months. In Alberta, payments for workers’ compensation have been deferred and the City of Calgary was considering deferring property taxes in a meeting Thursday.

Percy Woods of BOMA Edmonton, which represents commercial building owners and property managers, said that sort of relief should make it easier for landlords to help tenants. He said many landlords, particularly privately owned local and regional players, are in the same boat as tenants, with few options to cover their bills if rental payments dry up.

“It’s a lot easier to work with somebody that’s in place and find somebody to replace them,” he said.

“We’ve got to keep the business is going on. From our perspective, the best way for that to happen is to get popped up for a short time and defer.”