Small businesses concerned about accessibility of rent assistance program

The government program intended to provide small business owners with rent relief during COVID-19 is being criticized for not being accessible to those who need it most.

CityNews spoke with a number of businesses who said their landlords either didn’t qualify or refused to apply for the 75 per cent rent relief.

Under the Canada Emergency Commercial Rent Assistance plan, both the small business owner and the landlord would each cover 25% of the rent, while the federal and provincial governments would step in to split the remaining 50% cost.

Celina Blanchard, the owner of Lambretta Pizzeria in Roncesvalles, said she will have to close her doors for good this weekend because her landlord isn’t applying for the cost-sharing program.

Blanchard’s monthly rent is $13,000, which she paid in April, in hopes that the government would announce relief to businesses.

“They’ve given the power to landlord and not the actual business owner,” Blanchard said. “I think it would have been best to offer the relief to the small businesses, therefore we would have been able to pay the rent and everything else. I feel powerless.”

There have been past disagreements between both sides prior to the pandemic. CityNews reached out to Blanchard’s landlord, asking why they were not applying for the program.

A representative responded on behalf of the landlord, saying they aren’t eligible for the program because the mixed-use building doesn’t have the required 30% commercial component.

A requirement outlined by the provincial government on April 24. However, the Canada Mortgage and Housing Corporation (CMHC), who is responsible for administering the program in partnership with the provinces, said the requirement has been removed.

“It was removed to ensure that the program covers small commercial tenants in multi-unit residential properties that are equally in financial hardship and in need of support,” wrote a CMHC spokesperson.

“All I’m asking is for a chance for him to apply and get an answer,” Blanchard said. “It’s not giving me much hope. It’s not a mandatory program, a landlord can choose to do it or not, I don’t have much power over that.”

In the city’s west-end, the owners of a dress rental shop paid $9,000 in rent back in April, despite losing 100% of their revenue. Angela Pastor, the co-owner of The Fitzroy, said the landlord has refused to apply for the relief program.

“They said they’re not in a position to lose 25% of their gross, which, you know, we’re not either but this is the situation that we’ve all been put in, and so it was really disappointing to hear that they won’t work with us,” said Pastor. “We’ve talked to many other business owners, and no one we know have said that their landlord is going to participate in this. So I think, unfortunately, it will have to be mandated. I mean, these landlords have the fate of all our businesses in their hands.”

CityNews reached out to the landlord on Thursday, but did not hear back by Friday’s deadline.

When asked what options businesses had in these situations, The CMHC response was that businesses may be eligible for other credit support programs. During the provincial update on Friday, Finance Minister Rod Phillips didn’t offer a solution, only saying that the relief program should provide a peace of mind for both sides.

“This program was designed to move quickly and get money out there,” Minister Phillips said. “We want to make sure the 900 million gets out there as quickly as possible.

Both the Minister and in recent days, Premier Doug Ford, have called on calling on both sides to work together.

Missing the mark?

Prime Minister Justin Trudeau announced last Friday the federal government would be providing financial support to small businesses who couldn’t afford to pay rent because of COVID-19.

The cost sharing program that would require the mortgaged property owner to agree to not evict their commercial tenants and provide rent relief.

A fitness studio in the Beaches, has also penned a letter to local politicians, calling on the province to make changes to the program. The owners of Pendo Studios say though they qualify for the program, they don’t know when and even if their landlord will apply for the help.

“If it’s 100%, up to the landlord’s, then we’re at their mercy, all small business or commercial tenants are at the mercy of a reasonable or unreasonable landlord,” said Cheryl Edman, Co-owner of Pendo Studios. “Before the details of the program are forwarded to the public, we’re pushing for some sort of mandate that requires the landlord to participate in the program, if the tenant requests.”

The Canadian Federation of Independent Business (CFIB) said 50 per cent of businesses have said they need help for May. So far, 10 per cent say their landlord has agreed to participate in the program, another 10 per cent said the property owner will not be applying, and about 40% of small businesses aren’t sure if there landlord will apply for the program.

With the program not yet in operation on May 1, the Executive Director of the CFIB says that could be problematic for some landlords.

“One of the big challenges for landlords is there’s some details about the program that you can’t apply for this program until mid May,” said Laura Jones. “So you know you’re offering a 75% discount essentially on the good faith that you will get the money. For some landlords, who themselves are in difficult financial situations, [this is] proving to be a really, really challenging dilemma”

The CFIB is concerned as well about some of the eligibility requirements for small businesses, saying the 70 per cent revenue loss guideline leaves out many other who are still struggling to make it through the pandemic.

The organization also said there are things the province can do to protect small businesses.

“I think provinces can do two things: the eviction protection, which is doesn’t cost them anything,” Jones said. “The second thing that they could do is provide some hardship grants some emergency money for businesses that are falling through the cracks so some of these federal programs, of course.”

The rent relief program is so far available until the end of September and retroactively in effect for the months of April, May and June.