The federal and provincial governments are throwing small businesses a lifeline amid the COVID-19 pandemic, which has forced many to close their doors.
Prime Minister Justin Trudeau announced details about the Canada Emergency Commercial Rent Assistance Program on Friday, which will provide urgent relief for small businesses and landlords.
More than $900 million of provincial-federal relief will be provided to small businesses in Canada to ensure they are ready to reopen their doors when the current emergency measures are lifted. Ontario’s share of rent relief will amount to $240 million.
The program will provide forgivable loans to eligible commercial property owners/landlords that are experiencing rent shortfalls. To receive the loan, property owners will have to reduce the cost of rent for small business tenants by at least 75 per cent for April, May and June 2020. Property owners are also being asked to commit to a moratorium on evictions for three months.
"To help stop the spread of COVID-19, businesses have closed their doors and employees have stayed home and that has been working, but it has also created significant financial hardship," said Rod Phillips, Ontario's Minister of Finance. "By subsidizing rent payments, reducing taxes, extending deadlines, and eliminating penalties and interest, we're helping to ensure businesses can start up quickly when the time is right."
The Canadian Federation of Independent Business said it is pleased the federal government included rent forgiveness in its plan, but wondered if it may be too reliant on landlords.
"Landlords do not have to participate, and it will be expected to accept some losses under the program," it said in a release issued after Trudeau's statement. "They may choose to ignore it, even if their tenants badly need it."
The federation also expressed concerns the program may be too complicated.
"We appreciate the enormous challenge in designing support programs and getting them out quickly," the statement continued. "As they have done with other big programs, our hope is that governments will be open to suggestions for improvement as it becomes apparent in real-time what works and what doesn't."
It plans to survey small businesses across the country Friday night to gauge reaction to the announcement.
Some businesses suggested it may not be enough anyway. For those, Trudeau suggested taking advantage of the Canada Emergency Business Account, which will allow them to access up a loan of $40,000.
"The businesses that have no revenue and are unable to make even the 25 per cent rent -- $10,000 actually represents an average month's rent for a small business in this country, which means a quarter of that can actually last four months," he explained.
Earlier this month, the government expanded the program to include all businesses that had a payroll in 2019 between $20,000 and $1.5 million.
The prime minister said another announcement is coming soon to provide larger businesses with rent. He also expressed optimism that once the pandemic passes, the economy will bounce back.
"Our economy and our businesses were in excellent shape before. Some sectors are more hard-hit than others, but we know at the end of this, people will need to travel for work, for pleasure. People will need to go to restaurants," said Trudeau.
Meanwhile, talks continue between Ottawa and the provinces on how to reopen the economy safely. Trudeau suggested some provinces may ease social distancing restrictions earlier than others, depending on how impacted they have been by the pandemic. So far, Ontario and Quebec have more than three-quarters of the country's cases.
