As August draws to close, so does a federal relief package aimed at helping small businesses, but advocates want that subsidy to continue for the foreseeable future and be revamped.
The Canada Emergency Commercial Rent Assistance (CECRA) program offers unsecured, forgivable loans to eligible commercial property owners to cover a minimum of 50 per cent of their tenants’ rent. In exchange, a landlord had to reduce the rent charged to small business tenant by at least 75 per cent.
The program required landlords apply for the program and was only eligible to small business tenants which had lost 70 per cent of their income due to the COVID-19 pandemic.
That’s something the Ottawa Coalition of Business Improvement Areas has been fighting against since the CECRA was first introduced. The group wants to cut out the middle man — the landlord — and have the money go directly to tenants.
Despite the program’s problems, the coalition said those businesses which qualified are also hoping for an extension.
“There are a lot of businesses that are struggling and worried right now because there’s no indication and no confirmation from the government that the rent relief program is going to be extended beyond the end of August,” said Mark Kaluski, the coalition’s chair.
He expects to see more businesses shutter their doors this winter because of financial difficulties.
“Anecdotally, we’ve heard a lot of businesses are socking away some money and if they get through the holiday season and sort of don’t come out the other end, on the profitable side, that there will be a lot of closings.”
Government has more to spend, says CFIB
Kaluski encourages people to shop local as much as possible.
He also hopes that if the federal government decides to extend the CECRA, it introduces a sliding scale, so smaller landlords get more help than those who own multiple properties.
The Canadian Federation of Independent Business (CFIB) believes the rent relief program needs to be extended because businesses are nowhere near having recovered. The organization is also calling for the subsidy to go directly into tenants’ hands.
It also said the 70 per cent loss threshold is too high.
“Our understanding is [the federal government has] a budget of something like $2 billion that they put aside for this program, and it has nowhere near gotten to that point,” said Corinne Pohlmann, vice-president of national affairs for the CFIB.
Pohlmann said the government has only spent about 25 to 30 per cent of those funds.
“So clearly, there’s a problem and we need to figure out a way to fix it, to make sure that we get the money into the hands of the tenants who actually need it.”
Landlords waiting and seeing
The Building Owners and Managers Association of Ottawa is hoping Labour Day will be a reset for businesses since many of its private sector members are planning to have employees return to the office in September.
“We’re all sort of going to have to wait and see a little bit as people re-enter the office space. How will they respond to going back into the retail establishments?” said Dean Karakasis, the association’s executive director.
“If we get into September and we’re noticing new challenges, I think we would actually recommend an adjustment to the program and have [the government] focus more on the tenants making applications as opposed to us administering [the program].”